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International Joint Ventures

International Joint Ventures. Motivations Macro-structure Cooperative Activities and Modes Role of IJVs in International Strategy Nora-Sakari as exemplar. International Joint Ventures. Motivations – Complementarities vs. Size : Market access Risk / experience (lack of / superior)

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International Joint Ventures

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  1. International Joint Ventures • Motivations • Macro-structure • Cooperative Activities and Modes • Role of IJVs in International Strategy • Nora-Sakari as exemplar

  2. International Joint Ventures • Motivations – Complementarities vs. Size: • Market access • Risk / experience (lack of / superior) • Too small / resource pooling • Intense competition • Technology (lack of / superior) • Learning

  3. Motivation: Size Braunschweiger AG Germany Acme Inc. U.S.

  4. Motivation: Complementarities Braunschweiger AG Germany Acme Inc. U.S.

  5. International Joint Ventures • Range of Possible Cooperative activities: • R&D • Manufacturing • Marketing • Sourcing • Service • Everything?

  6. International Joint Ventures • Forms of agreement: • Equity vs. arms-length contract/agreement • Structure: • Ownership (50-50 … 51-49 … 90-10) • Contribution ($, technology, plant, marketing) • Strategic and operations roles & responsibilities • Active vs. Passive • Value-chain scope

  7. Cooperative Modes • Independent • Act as two separate companies; no constraints • Coordinated / Complementary • Act as two separate companies with established operational, product, or geographic domains or constraints • Joint • Act as single company

  8. Independent R&D Braunschweiger AG Germany Acme Inc. U.S.

  9. Independent R&DCoordinated Marketing Braunschweiger AG Germany Acme Inc. U.S. North America European Union

  10. Independent R&DCoordinated MarketingJoint Manufacturing Acme Inc. U.S. Braunschweiger AG Germany North America European Union A-B Mfg. SA, Mexico

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