Motivations and Challenges of International Joint Ventures in Foreign Market Entry

INTERNATIONAL
BUSINESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LITERATURE REVIEW................................................................................................................1
Motivations behind the formation of International joint ventures in the internationalization.....1
Decision-making criteria that determine the suitability of the use of international joint ventures
.....................................................................................................................................................2
Evaluation of foreign market entry strategy options...................................................................3
Benefits and challenges of the use of international joint ventures in foreign market entry........4
ANALYSIS AND DISCUSSION...................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
International business refers to trading of goods, products, services, capital, technology across
national borders at global level. International business open opportunities for organization to
serve international customers (Burlacu, Gutu and Matei, 2018). Globalization has increased
opportunities for organizations to move business at international scale. There are various kinds of
factors that motivate organizations to move business to international scale. Internationalization
has increased competition for companies at both domestic and international level (Larimo, Le
Nguyen and Ali, 2016). Due to this increasing competition, it has become important for
organizations to focus upon developing more innovative products and services by using
appropriate and effective use of resources. In order to sustain within this competitive market
environment, it has become important for organizations to analyse current market trends and
develop products and services accordingly (Schmieder, 2020). In order to successfully enter into
international market it is important for organizations to adopt appropriate market entry options so
that they can sustain within international market (Alcácer, Cantwel and Piscitello, 2016). This
assessment will focus upon understanding of the motivations behind the formation of
International joint ventures in globalization business, criteria that is utilised by firms in foreign
market selection process, decision-making criteria that determine the suitability of the use of
international joint ventures, evaluation of foreign market entry strategy options suitability of
international strategic alliances in global expansion, benefits and challenges of the use of
international joint ventures in foreign market entry.
LITERATURE REVIEW
Motivations behind the formation of International joint ventures in the internationalization
According to Goncalves and Smith (2019) the motivation behind the formulation of international
joint venture in the global marketplace. Business can do apply various kind of strategies that will
support for emerging the business and formulate towards international joint venture. Greater
motivation has made to systematically manner which define the inspiration of business in global
marketplace (Ferencikova and Hluskova, 2017). Growing international marketing is one of the
most important norms in this time. It help for inspiring or motivating the enterprise to increase
production and sales in global marketplace. This can possible with the international partners
where both organizations are merged and gain the more competitive advantage in global
marketplace.
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Bingöl and Begeç (2020) said that companies are establishing a coordination with different
shareholders to deal with the various kind of cooperative agreement with joint venture.
Sometimes, it is to be considered as risk, wasting a lot of time as well as money (Loehde and et.
al., 2020). But at certain point, It become consider as great motivation to expand their business
within international marketplace. Through this way, it gained more competitive advantage,
benefits.
Welch and Piekkari (2017) Organizations are entering in the international market by
identifying suitable alliance which help them to establish a strong position in marketplace.
Knowledge, skill and expertise are also supporting or motivating the enterprise to gain more
marketing advantage.
Criteria that is utilised by firms in foreign market selection process
As Per Pishchulov and et.al. (2019) foreign market selection process is consider as
crucial role at international level. It is completely based on the evaluation of various markets
with reference to certain well-defined criteria. In this way, organizations have been utilised the
all essential resources to make a plan of market section process. Basically, organizations are
considered the suitable criteria’s as follows:
International marketing objective- it is one of the important step of selection process
whereas identifying ascertain export of overall business goal. Sometimes, it has been selecting
the international marketing objective to define the perception of consumers in foreign
marketplace.
Dhochak and Doliya (2020) Preliminary screening is another important aspect of
selection process where it will be eliminating the market which become obviously do not meet
consideration but it would be identified all essential resources, gaining more relevant information
regarding the business. Sometimes, it has been conducted the market research to find out the
preference of existing client. So as it become easier to fulfil all their need or requirement.
Child and et.al. (2017)Testing and commercial production- initially, enterprise has been
tested on small level and then launching a business or their item within international level.
Through this, it gained feedback from producer side about the market condition. At similar time,
it help them to enterprise whereas assessing overall positive response towards marketplace.
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