Note on the Design and Management of International Joint Ventures

Case Solution

Paul W. Beamish
Ivey Publishing ()

An international joint venture is a company owned by two or more companies of different nationalities. The purpose of most international joint ventures is to allow partners to pool resources and coordinate their efforts to achieve results that no one could achieve by acting alone. Almost all multinational companies now use international joint ventures. Joint ventures are the method of choice for US and Japanese multinationals about 30 percent of the time. This note examines the reasons why companies create international joint ventures (for example, to strengthen existing businesses, bring existing products to foreign markets, bring foreign products to local markets, and diversify into a new business) and examines specific types of joint ventures (eg research and development, supply of raw materials and components, and marketing and sales). Then some guidelines for the success of international joint ventures are considered.

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