Chapter 9 - Non-equity venture-which is characterized by...

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Chapter 9: Entry Strategies and Organizational Structures Wholly owned subsidiary- an overseas operation that is totally owned and controlled by an MNC - total control and belief that managerial efficiency will be better without outside partners - many host countries don’t like because they feel that the company is trying to gain economic control by setting up local operations but refusing to take in local partners - many newly developing countries prohibit fully owned subsidiaries because they feel that the MNC will drive out local enterprises Mergers/Acquisitions - the cross-border purchase or exchange of equity involving two or more companies - British Petroleum (BP) - DaimlerChrysler Alliance - any type of cooperative relationship among different firms - two or more firms from different countries - joint venture is a type of alliance – two or more partners own a business International Joint venture (IJV)- an agreement under which two or more partners from different countries own or control a business
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Unformatted text preview: Non-equity venture-which is characterized by one groups merely providing a service to another Equity Joint Venture- which involves financial investment by the MNC in a business enterprise with a local partner Advantages of Joint Ventures-Improvements of efficiency-Access to knowledge-Political factors-Collusion or restriction in competition License- an agreement that allows one party to use an industrial property right in exchange for payment to the other party -product usually in the mature stage-competition is strong-profit margins are declining Franchising- a business agreement under which one party (the franchisor) allows another (the franchisee) to operate an enterprise using its trademark, logo, product line and methods of operation in return for a fee -fast food, hotel/motel -usually an upfront fee followed by a percentage of revenue Problems for Firm Planning to Export - could get stuck with a below par distributor...
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This note was uploaded on 04/25/2008 for the course BUAD 357 taught by Professor Mayer during the Spring '08 term at Millersville.

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Chapter 9 - Non-equity venture-which is characterized by...

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