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3.Industry-university agreementsfor the pur-pose of doing research are also increasing.a.Two problems have kept this type ven-ture from increasing even faster.b.A profit corporation wants to obtain tan-gible results—such as a patent—from its research investment, and universities want to share in the returns.c.The corporation usually wants to retain all proprietary data while university re-searchers want to make the knowledge available.d.Joint ventures between universities and corporations take many forms, dependingon the parties involved and the subject of the research.4.International joint venturesare increasing rapidly due to their relative advantages.5.There are drawbacks in establishing interna-tional joint ventures.PowerPoint Slide 15-16 (Transparency Master 15-5)“Joint Ventures” (See Power-Point slide show beginning on page 120 of this manual. Also presented as a transparency master in Section 6 of this man-ual.)Instructor’s Manual107Section 2: Chapter Notes
CHAPTER OUTLINE AND TEACHING NOTES1.The critical factors for success are the accu-rate assessment of the parties involved and how best to manage the new entity.2.A second factor involves the symmetry be-tween the partners.3.The expectations about the results of the joint venture must be reasonable.4.The timing must be right.D.A joint venture should be considered as one of many options for supplementing the resources ofthe firm.V.ACQUISITIONSA. An acquisitionis the purchase of a company or a part of it in such a way that the acquired companyis completely absorbed and no longer exists.1.Acquisitions can provide an excellent way togrow a business and enter new markets.2.A key issue is agreeing on a price.3.Often the structure of the deal can be more important to the parties than the actual price.4.A prime concern is to ensure that the acquisi-tion fits into the overall direction of the strategic plan of the present venture.B.Advantages of an Acquisition.1.Established business.a.The acquired firm has an established im-age and track record.b.The entrepreneur would only need to continue the existing strategy to be suc-cessful.2.Locationis already established.