Entering International Markets through Joint Ventures
Added on 2019-10-30
14 Pages4136 Words138 Views
|
|
|
INTERNATIONAL JOINT VENTURE-SPAR AUSTRALIA LIMITED CASE STUDY 1INTERNATIONAL JOINT VENTURE-SPAR AUSTRALIA LIMITED CASE STUDY NameCourseProfessorInstitutionDate
INTERNATIONAL JOINT VENTURE-SPAR AUSTRALIA LIMITED CASE STUDY 2Executive SummaryThe International joint venture is one of the strategies employed by themultinational corporations to have full access to the foreign market. Research confirmsthat international joint venture foreign market entry strategy is more beneficial than therisks arising from the approach. This report uses the case study of the SPAR Australianto explore the advantages and disadvantages attributable to the international jointventures. SPAR Australia also was known as SPAR FACTS it is the joint venturebetween the international SPAR Group Inc. and Australian Face and Cosmetic TradingServices Pty Ltd (FACTS). Despite that SPAR Group had operated in the Australianmarket since 1994, its operations expanded rapidly from 2006 when it formed a jointventure with FACTS. The report has found that through joint venture, SPAR Group hasbeen able to have smooth access in the Australian market, shared costs and risks withthe other partner, reduced political risk and taken advantage of the combined synergies.On the other hand, the joint venture has also experienced several problems. Forexample, competitors such as Metcash employ anti-competitive behaviors without theintervention of the Australian Government. Secondly, many small businesses which aremajor targets of SPAR Australia they are either consolidating or closing down. However,besides the challenges, report analysis shows that the benefits realized by the companyare more than the risks.
INTERNATIONAL JOINT VENTURE-SPAR AUSTRALIA LIMITED CASE STUDY 3Table of ContentsExecutive Summary...........................................................................................................2Introduction........................................................................................................................4SPAR FACTS Background Information.............................................................................5SPAR Australia Joint Venture Business Operations......................................................6The Entry of SPAR Group in Australian Market.............................................................7SPAR Australia Marketing Management...........................................................................8Benefits of using SPAR Australia Joint Venture to SPAR Group Inc................................9Challenges Facing SPAR Australia as an International Joint Venture............................11Conclusion.......................................................................................................................12References.......................................................................................................................13
INTERNATIONAL JOINT VENTURE-SPAR AUSTRALIA LIMITED CASE STUDY 4IntroductionOver the past decades, the demands of managing the international businesseshave greatly changed. This phenomenon has influenced the strategies of managing theinternational ventures across the borders[CITATION Dur14 \p 48 \l 1033 ]. The goal of everybusiness is to develop, grow and expand with the aim of serving wide market coverage.As a result of the urge to reach huge market has forced businesses target extend theiroperations both in the local and international markets. Business operating in theinternational markets faces a number challenges such as adhering to the host countrytrade laws, hazardous weather conditions, lack of the right labor, fluctuating exchangerates, resistance by customers to have standardized global products and services, hostnation based differentiated approaches, flexible manufacturing technology, and others.To manage these challenges effectively it calls for the proper management of theinternational business operations. The International joint venture is one of the mostcommon strategies used by the business to operate in the international arena[CITATIONRom16 \p 20 \l 1033 ]. Ideally, joint venture partnership occurs when two business in twodifferent or more countries agree to carry out business[ CITATION LeN09 \l 1033 ]. Thisapproach helps the company to explore international business without undertaking thefull responsibilities associated with the international business operations. Instead, thelarge responsibility of overseeing business operations in the international market is leftto the host country company. There are several and critical reasons why businesses may prefer to enter intothe international joint ventures. Factors such as lower taxes, favorable currencyexchange rates and lowering of the manufacturing costs often make all the internationaljoint ventures beneficial[CITATION LeN09 \p 61 \l 1033 ]. However, despite having a lotbenefits in the international ventures, there are risks of entering foreign markets usingthe same strategy. Usually, the international joint ventures permit multinationalcorporations to reduce their risk while expanding in the global market with a goal ofserving the new market and new customers as well. The companies in the host countrymay be unable to access local market effectively because of the lack of the appropriatetechnology, right skills or marketing strategies. However, when they corporate withanother foreign country with the goal of establishing a joint venture they can be provided
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents