Redesigning strategies to go international


The growth of globalisation and in economics (cavisgil 2008)) and rapid growth in the competence has been created circumstances for many big companies to focus on redesign their strategies about to go internationally. To go internationally many methods can be used and one of them is international joint ventures (IJV) .research on international joint ventures mainly for multinational companies and very large companies who has branches in all over the countries. This research enables the managers to help in decision making when they think about international joint ventures for the expansion of their business in small as well as in large companies .The research will be focus on the strategies used and selection of the suitable partners (beamish and lupton,2009).this research will also helps the managers to plan the expansion of their business internationally by using international joint ventures and how this will influence on their strategic decision making .this will also help the managers to focus on the factors which lead to success and failure of any international joint ventures.


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Joint ventures plays a important role for a company to go globally and expand the business internationally .A successful joint can result in the capital inflow of any company and to develop a top position in the corporate world. International joint ventures helps the firms in enabling in accessing the complementary resources and strengths and capabilities of each other(lupton,2009,s,75),which helps them to achieve economies and development of new products and bring them into the market, technology or services use into the market more faster,efficiently,cheaply than they can not do alone. Joint ventures should have reliable partners. Partners plays an important role in the joint ventures because a good partner who has knowledge of market and have good business contact and also have good image in the corporate market can lead any company to achieve the corporate objective as well as targets necessary than to partners who don't have the market knowledge as well as poor in experience can lead to the failure of any company, so it is necessary to have more reliable and efficient partner. Apart from this a good partner give the company a status and good position in the local business environment and also helps in the international area. Also good connections to the local business helps the international joint ventures to do business in the environment in which they could not do successfully without these partners.(beamish 2009,kwon 2008).the existing research literature can give the answers to many questions to decide whether to enter with international joint ventures or not. The research on joint ventures gives significant results.(reins and Ritchie,2003,p.369) and focus on more studies using primary data. Joint ventures also known as foreign direct investment which helps a company to go internationally and expand its business into other international markets. Joint ventures is to acquire a part of an existing company .Joint ventures can be used for manufacturing,production,sales of products and product distribution. Joint ventures can also be used for providing excellent customer services. The analysis is supported by various methods. The complexity in the product development and growth in competence lead to new requirements and strategies and methods for expansion. Joint ventures is used in concerning products,services,different countries and timing and also used in the product development technology. For a company it is very important to know to whom the company will do business and for what, which is their target market and who is their foreign joint venture partner and how well they are able to achieve targets and corporate objectives together. The study enable to look at these situations and functions and strategy process. The decision making process is not similar which multinational companies focus in comparison to small and medium sized enterprises due to their large difference in the structure. It can analyze the cases and explain shortly changes in position that have achieved by using international joint ventures .The theoretical frame work is based on Johansson and Mattson(1989).Their concept of going internationally can be applied. The main object of the study is to give a model that can be helps in the positioning of the joint ventures, situations and reasons to select the partners .The main objective of the study is to understand which leads for international joint ventures creation and plan their strategies by incorporating the instant business networks. The purpose of the study is to analyze and explain the joint ventures as an expansion method to go globally and expand business into the foreign markets. It focuses on the method to identify and creation of partners for the companies to design, decide and execute plans for joint ventures and development.

Theoretical framework

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The analysis of the study focus on the concept of international joint ventures and why they are used as an important tool for to go globally and expand business internationally. The study will also analyze why joint ventures are used for market entry and penetration. this part will provide a literature review and also give an overview to discuss about international joint ventures is an effective tool for market entry for a company to go globally and expand business internationally .Joint ventures can not only be used as corporation with the partners but it can also used to create a financial relationship with the partners with equity. The main advantage of this mode of entry method is to share the risk of failure with the partner and also provide strength in joint venture. A company with good and effective and in depth knowledge of local market can joint with a foreign partner who does not have local market knowledge. A company with local market knowledge also has knowledge of about the technology area and application process.(keegan,1989).According to luostariren(1980,p.22) who has divided the foreign direct investment with two types. direct one and non direct operation. His view separated the two types based on direct ownership, money investment. Joint ventures entry method can be combination of both types. Many joint ventures are very close to contract manufacturing and production. Most of the companies uses joint venture technique for direct production and direct sales into a foreign market. International joint venture can be used as manufacturing subsidiary or establishment of sales office in the foreign market. Most of the joint ventures starts as a common venture of two partners with a idea to become wholly owned company after some period of time particularly when international joint venture is active as a part of sales network internationally. In international joint venture one partner can act as both "call option "to buy other partner and a "put" option to sell out to the other partner but it depends on how the international join venture performs in the future(mcguire,1996:zander and koguit 1993,buckely ,2002).Business networks mainly have three phases. The first one is emerging a network, second one is the development of business network and third and last one phase involves the achievement f business networks(ghauri 2003).International joint ventures can be used as a tool in order to reach to this achievement. If you go back you could see that manufacturing operations was strongly emphasised (see luostannen 1979),but today if you see it emphasis more on the issue of distributor(grell 2007).Due to the globalisation the role of services international sales and sourcing taking place at high level. In addition to that distribution services and many other services are increasingly becoming the part of the manufacturing activities. The approach to the internationalisation forms can explain well about the concept of development of international joint ventures. Since there are many international joint ventures which can be grouped to several categories at a time. We can take example as some companies which uses joint ventures as a tool to penetrate into the new market, can be used as project management. But as corporative internationalisation form international joint ventures can be used as several types of situations such as technology based or knowledge based. International joint ventures establishment depends on the significant differences in circumstances. For example,80 to 90% of the German respondent stated that German china joint venture has been advantage of joint venture as compared to wholly owned foreign enterprises. International joint ventures can help to get direct management control and also control of technology know how for a company. Through international joint ventures a company can get close look and full control on the production or manufacturing and get good revenues and also can get know how customers requirements. A joint venture can not only help a company to link to manufacturing resources with the foreign company but it may also helps the company to enter in a country specially where there is special law that restrict foreign control but permits joint ventures. China and Mexico are the examples of this type of countries. joint venture can also be used to supply product for the third country markets.Competiton and poor strategy can often creates problems. The main reason of joint venture divorce or failure is due to the disagreement between the third country markets because there the partners may face each other as potential competitors. They can face direct competition. International joint ventures are not limited to large companies but small and medium sized companies are also associated with them. Partners of small and medium size companies who has not enough capital or financial resources may join the international market through joint venture(keegan1989).The main key element in establishing joint venture is duration and timing of the venture .According to Johansson and Mattson(1988) define internationalisation is the process which helps the firms 1)to develop the good relations and increase sales profits and resourses.2)it also helps o maintain and increase coordination between different nationals and 3)to establish a good position in the new markets. Joint venture is an evolutionary process where the relationships are used to make the bridges between foreign markets. Johansson and Mattson (1988) identified four types of firms and situations. The first one is the early starters which has limited or low relationship with the forgiven firms. This type of firm has very limited knowledge about doing business internationally, they do the business through the local agents, local trade houses or other firms than the international joint ventures. The second one is The Lonely International is the situation where a firm can be highly internationalised but the environment of the market is not .In this situation a firm has previous knowledge ad experience and due to this knowledge it may enter into the new market and can expand its operation and network. The lonely international can use various international joint venture tools in order to achieve success in the foreign markets such that direct control over the international production and sales and to become more autonomous, than the other firms which are operating into foreign markets. The late starters has its own domestic markets and relationship with the local customers and suppliers. They are in the learning stage of going international. The strong relationship in the domestic market helps them to go internationally and enter into the foreign markets. The international only is the third and last situation in which a firm is highly internationalised and its environment of doing business too. Firm's relationship and network of business is also highly internationalised and firm don't need to focus on these things to go internationally it has to just focus on some gradual changes .In this situation a firm may have the capability to use different types of tools of international joint ventures more effectively and efficiently.

Research Methodology

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This is a multiple research method study, which will follows inductive approach which will filter a large research material and after that select four different situations. The data will be collected from the four types of situation according to Johansson and Mattson and will compare it .The data will be collected on numbers of various variables. These variables will be how much the size of the company, which business is doing, about the investment in the abroad, what's ownership strategy and structure, span of the time ,duration, target market or country, experience history, joint venture form, type of investment and partner selection, relationship among the partners, position in the market, plan of development and any updates in the ownership strategy and structure. Data will be collected on these variables and different factor analysis techniques will be applied to get the actual and accurate result. The study will be started as quantities research on international joint ventures. The study will have a dual strategy in order to utilise mixed methods. The main purpose of the study will to get a lot of valuable information by using a structural questionnaire and semi structure as well as in depth interviews. The research will be made by using standardised questionnaire which will be in the English. English will be the main language. Some data will be collected from the those joint ventures that started business between last decade. The questionnaire and study will be targeted on the top management or key members. First part will be go through the list of problems and sort out all such cases. The search machine will be Google and Yahoo. Apart from this telephone will be used to get information, a lot of business directories and publication will be used to get information on joint vetures.The purpose is to get valuable and accurate information. Data will be collected on some various issues like name of the company and its ownership strategies. In order to get the data samples English language will be used. The collected data or information will be filter and update listing will be made in excel with a proper structure. The study will be followed by a proper procedure before start. The procedure will be carefully plan and will be tested before start, in order to minimise or reduced some problems like information flow and confidentiality to the extent possible. Also the cultural environment will also be analyzed and usage of wrong word will also be checked. There should be no cultural misunderstanding happens during the study. In order to get the answers of the questionnaire participant will have one month time. The interviews will be carried out in the following areas. The interviews will be carried out about the international joint venture in the construction companies; construction material handling manufacturing will give a lot of valuable information. Interview will be conducted from metal production and chemical production companies. Also from the consumer product companies' interviews will be made and i think this sector can give a lot of information because these products are consumer products and companies have feedback from the customer, what they think, more data and information will be collected from this sector. The in depth interviews will provide a actual view which will helpful in the decision making process and strategy used for the international joint venture. Also the data will be collected on selection of good partner will also be collected, because partners plays an important role in the international joint ventures, it is very important to have a good partner who have knowledge of market, good relation with the customers and as well as wholesalers, good resources, reliable also should have good business strategies, because some times partners who have poor knowledge about the market can responsible for the failure of the international joint ventures. So it is very important to collect the data on the partners. Also the data on control and coordination will be collected. International joint ventures are also associated with the small and medium sized enterprises. The data will also be collected from for objectives, level of expertise, investments or assets because some time objective of the joint venture are not clear and completely communicated to others. The data will also be collected from the SWOT analysis (strengths,weakness,oppurtunities,threats).Also the data from the employee's behaviour and attitude will be collected in order to asses the study more effectively and accurately.


The study will give some idiographic mechanism and also give situation for each type of joint ventures. The situations which will highly depend on the international joint ventures position and parents, market penetration, and doing business. The study will give information on issues like business networks, business connections, listing ,experience also the market position which plays an important role in the life cycle of any international joint ventures. The study will also give an idea about the temporary joint ventures and as well as long term international joint ventures partnerships. Most of the joint ventures are not comparable to each other because in order to compare joint venture there should be similarity between business networks and position. Also there is difference in resourcing, decision process and strategy of each international joint venture, because each joint venture has its own decision process, strategies and plans. There should be further research carried out about the categorisation of international joint ventures which will help in the expansion of the capabilities. According to discussion and explanation therefore it is suggested that international joint venture should not only be used as stepping element in the internationalisation process towards a wholly owned home enterprises but they should be used as independently tool for further internationalisation. This would give a richer value to the position of the parent companies and as well as international joint ventures. Also this would give international joint ventures a good position and value.