Usually it is a business undertaking in which foreign

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Usually , it is a business undertaking in which foreign and domestic companies wants to share the costs and expertise or to meet the govt . regulation . In addition , govt . policies might give incentives on tax for JV . This mode might be more popular if the local customer prefers local manufacturing or markets with strong nationalism 1.3 Joint Venture
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Potential Advantages in Forming JV International business may realize four benefits from strategic alliances : 1.3.1 Ease of market entry Shared risk Shared knowledge and expertise Synergy and competitive advantage
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Wholly-owned Subsidiary i . Building new facilities ( called the Greenfield strategy ) 1.4 No time pressure (long lead time to the generation of sales) No inherited problems Local financial incentives may encourage No local entity exists or is available for sale
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ii . Buying existing assets ( called the acquisition strategy or the Brownfield strategy ) 1.4 Wholly-owned Subsidiary o Quick entry o Local market know-how o Local financing may be possible o Eliminate competitor o Eliminate sourcing or buying problems
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The End 16
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