International Joint Ventures and Alliances Motivations – Complementarities vs. Size:Motivations...
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Transcript of International Joint Ventures and Alliances Motivations – Complementarities vs. Size:Motivations...
International Joint Ventures and Alliances
• Motivations – Complementarities vs. Size:Motivations – Complementarities vs. Size: – Market access
– Risk / experience (lack of / superior)
– Too small / resource pooling
– Intense competition
– Technology (lack of / superior)
– Learning
Motivation: Size
Acme Inc.U.S.
Braunschweiger AGGermany
Motivation: Complementarities
Acme Inc.U.S.
Braunschweiger AGGermany
International Joint Ventures
• Cooperative activitiesCooperative activities:– R&D
– Manufacturing
– Marketing
– Sourcing
– Service
– Everything?
International Joint Ventures• Forms of agreementForms of agreement:
– Equity vs. arms-length contract/agreement
• StructureStructure:– Ownership (50-50 … 51-49 … 90-10)
– Contribution ($, technology, plant, marketing)
– Strategic and operations roles & responsibilities• Active vs. Passive (strategic option)• Value-chain scope
Cooperative Modes
• IndependentIndependent– Act as two separate companies; no constraints
• Coordinated / ComplementaryCoordinated / Complementary– Act as two separate companies with
established operational, product, or geographic domains or constraints
• JointJoint– Act as single company
Independent R&D
Acme Inc.U.S.
Braunschweiger AGGermany
Independent R&DCoordinated Marketing
Acme Inc.U.S.
Braunschweiger AGGermany
NorthAmerica
EuropeanUnion
Independent R&DCoordinated Marketing
Joint ManufacturingAcme Inc.
U.S.Braunschweiger AG
Germany
NorthAmerica
EuropeanUnion
A-B Mfg. SA, Mexico
International Strategy:Managing Dual Pressures
Pre
ssur
es f
or G
loba
l Eff
icie
ncy
Pressures for Local Responsiveness
High
Low
HighLow
Multidomestic Strategy
Germany
Mexico
Japan
Entry?Entry?
Acme Inc.U.S.
Multidomestic Strategy
Germany
Mexico
Malaysia
REMEMBER: IJV is also an entry modeREMEMBER: IJV is also an entry mode
Acme Inc.U.S.
IJV in Multidomestic Strategy
Acme Inc.U.S.
Braunschweiger AGGermany
Cervesa SAMexico
Sashimi LTDJapan
IJV in Global Strategy
Acme Inc.U.S.
Braunschweiger AGGermany
Cervesa SAMexico
Sashimi LTDJapan
IJV in Transnational Strategy
Acme Inc.U.S.
Braunschweiger AGGermany
Cervesa SAMexico
Sashimi LTDJapan
Learning and IJVs:1984: The NUMMI Alliance
GM Toyota
NUMMI
1986: Application of Knowledge I GM Toyota
NUMMI
TMM-K
Toyota learned how to:• Tap into US preference• Work in US environment
1990: Application of Knowledge II GM Toyota
NUMMISaturn
GM learned:• Lean manufacturing• Quality
1999: The Fuel Cell AllianceGM Toyota
Alliance
Learning Race(s)
GM
Toyota
Ford
Daimler-Chrysler
Race toTechnology
#1
Race toTechnology
#2