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Joint ventures

A joint venture is a partnership between a domestic firm and a foreign firm. Both partners invest money and share ownership and control of partnership. Joint ventures require a greater commitment from firms than licensing or the various other exporting methods. They have more risk and less flexibility.

A domestic firm may wish to engage in a joint venture for a variety of reasons; for example, General Motors and Toyota have agreed to make a subcompact car to be sold through GM dealers using the idle GM plant in California. Toyota's motivation was to avoid US import quotas and taxes on cars without any US-made parts.

Direct investment

Multinational organizations may choose to engage in full-scale production and marketing abroad. Thus, they will invest in wholly owned subsidiaries. An organization using this approach makes a direct investment in one or more foreign nations. Organizations engaging in licensing or joint ventures do not own manufacturing and marketing facilities abroad.

By establishing overseas subsidiaries, a multinational organization can compete more aggressively because it is "in" the marketplace. However, subsidiaries require more investment as the subsidiary is responsible for all marketing activities in a foreign country. While such operations provide control over marketing activities, considerable risk is involved. The subsidiary strategy requires complete understanding of business conditions, customs, markets, labor, and other foreign market factors.

Us commercial centers

Another method of doing business overseas has come in the form of US Commercial Centers [link] . A Commercial Center serves the purpose of providing additional resources for the promotion of exports of US goods and services to host countries. The Commercial Center does so by familiarizing US exporters with industries, markets, and customs of host countries. They are facilitating agencies that assist with the three arrangements just discussed.

US Commercial Centers provide business facilities such as exhibition space, conference rooms, and office space. They provide translation and clerical services. They have a commercial library. They have commercial law information and trade promotion facilities, including the facilitation of contacts between buyers, sellers, bankers, distributors, agents, and government officials. They also coordinate trade missions and assist with contracts and export and import arrangements.

Trade intermediaries

Small manufacturers who are interested in building their foreign sales are turning to trade intermediaries to assist them in the sale and distribution of their products. These entrepreneurial middlemen typically buy US-produced goods at 15 per cent below a manufacturer's best discount and then resell the products in overseas markets. These trade intermediaries account for about 10 per cent of all US exports9. The trade intermediary provides a valuable service to small companies, which often do not have the resources or expertise to market their products overseas. The trade intermediaries have developed relationships with foreign countries; these relationships are time-consuming and expensive to develop.

Alliances

Heineken, the premium Dutch beer, is consumed by more people in more countries than any other beer10. It is also the number-one imported beer in America. Miller and Budweiser, the two largest American beer producers, have entered into global competition with Heineken, partly because the American beer market has been flat. They are doing so by forming alliances with global breweries such as Molson, Corona, and Dos Equis. Heineken has responded to the challenge, heavily promoting products such as Amstel Light and Murphy's Irish Stout. Heineken has also begun developing an alliance with Asia Pacific Breweries, the maker of Tiger Beer.

Questions & Answers

the diagram of the digestive system
Assiatu Reply
allimentary cannel
Ogenrwot
How does twins formed
William Reply
They formed in two ways first when one sperm and one egg are splited by mitosis or two sperm and two eggs join together
Oluwatobi
what is genetics
Josephine Reply
Genetics is the study of heredity
Misack
how does twins formed?
Misack
What is manual
Hassan Reply
discuss biological phenomenon and provide pieces of evidence to show that it was responsible for the formation of eukaryotic organelles
Joseph Reply
what is biology
Yousuf Reply
the study of living organisms and their interactions with one another and their environments
AI-Robot
the study of living organisms and their interactions with one another and their environment.
Wine
discuss the biological phenomenon and provide pieces of evidence to show that it was responsible for the formation of eukaryotic organelles in an essay form
Joseph Reply
what is the blood cells
Shaker Reply
list any five characteristics of the blood cells
Shaker
lack electricity and its more savely than electronic microscope because its naturally by using of light
Abdullahi Reply
advantage of electronic microscope is easily and clearly while disadvantage is dangerous because its electronic. advantage of light microscope is savely and naturally by sun while disadvantage is not easily,means its not sharp and not clear
Abdullahi
cell theory state that every organisms composed of one or more cell,cell is the basic unit of life
Abdullahi
is like gone fail us
DENG
cells is the basic structure and functions of all living things
Ramadan
What is classification
ISCONT Reply
is organisms that are similar into groups called tara
Yamosa
in what situation (s) would be the use of a scanning electron microscope be ideal and why?
Kenna Reply
A scanning electron microscope (SEM) is ideal for situations requiring high-resolution imaging of surfaces. It is commonly used in materials science, biology, and geology to examine the topography and composition of samples at a nanoscale level. SEM is particularly useful for studying fine details,
Hilary
cell is the building block of life.
Condoleezza Reply
what is cell divisoin?
Aron Reply
Diversity of living thing
ISCONT
what is cell division
Aron Reply
Cell division is the process by which a single cell divides into two or more daughter cells. It is a fundamental process in all living organisms and is essential for growth, development, and reproduction. Cell division can occur through either mitosis or meiosis.
AI-Robot
What is life?
Allison Reply
life is defined as any system capable of performing functions such as eating, metabolizing,excreting,breathing,moving,Growing,reproducing,and responding to external stimuli.
Mohamed
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Source:  OpenStax, Business fundamentals. OpenStax CNX. Oct 08, 2010 Download for free at http://cnx.org/content/col11227/1.4
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