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JOINT VENTURE

JOINT VENTURE. Jenny Sánchez Sáenz International Business l. What is a Joint Venture ?. Thr ee main reasons to establish a joint venture: Government suasion or legislation One partner’s needs for other partner ’s skills One partners needs for other partner’s attributes or assets.

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JOINT VENTURE

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  1. JOINT VENTURE Jenny Sánchez Sáenz International Business l

  2. Whatis a JointVenture? • Three main reasons to establish a joint venture: • Government suasion or legislation • One partner’s needs for other partner’s skills • One partners needs for other partner’s attributes or assets • A Joint Venture is the participation of two or more companies to achieve a common goal.

  3. In JV companies share thelosses and profits in the transaction or transactions. • Contractual arrangement • Specific limited purpose and duration • Joint property interest • Common financial and intangible goals and objectives • Share profits, losses, management and control

  4. InvolvedParties • The foreign Party Business advantages to a foreign party seeking a local business party. • The local Party May share similar goals with the foreign party such a reduction of costs and risk.

  5. Types of Joint Venture • Fully integrated • Network • Production • Marketing and distribution • Purchasing • Research and development

  6. Advantages • Financial resources can be shared • Joint Ventures allows for investor diversification • Joint Ventures allows for direct management of business activities • The competitive strength of two parties can be combined • Economic incentives add value to JV

  7. Disadvantages • JointVenture profits are shared • Shared technologies can be used beyond the Joint Venture • Local management of a Joint Venture can be unknown

  8. Examples • Corona / Eternit : Compaña suramericana de ceramica • Ford / Mazda : The auto allianceinternational

  9. Sources • Aba Section of AntitrustLaw. "JointVentures." books.google.com.co. Google. 2006. Web. 28 March 2013 • Gutterman, Allan. "A Short Course in International JointVenture." books.google.com.co. Google. 2002. Web. 28 March 2013 • Czincota, Michael. "Fundamentals of International Business." books.google.com.co Google. 2009. Web. 29 March 2013

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