| 10.1 The End of Corporate Imperialism; 10.1 The End of Corporate Imperialism | |
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| Tweet Topic Started: Aug 1 2012, 06:03 AM (72 Views) | |
| jeremymiller | Aug 1 2012, 06:03 AM Post #1 |
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Please see attachment for article review. |
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| nwade | Aug 1 2012, 09:03 PM Post #2 |
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Jeremy, great summary and critique of the article. I agree with mostly all the points in your review, especially the paragraph where you explain the whole JV issue. I too found that interesting - that many local firms in JVs don't possess the local knowledge to do business. Perhaps they don't have the knowledge to be successful in a rapidly-moving, modern business structure, but they still must possess some local knowledge. I assume it's highly situational. Is the local partner located in a part of the country that has been a center of economic growth? If so, maybe they have been exposed to some of these modern business practices and know-how, and would be more beneficial than say, a smaller company that operates in a less-busy area of the country. The only question I didn't see mentioned in your review was "How Does the Distribution System Work?" (maybe this was one of the topics you thought was covered sufficiently in previous classes) I think this is crucial for the successful operation of nearly every business in every country. I also believe that the local company that the MNC chooses to partner with in a JV can add valuable insight to how the distribution system works in the country. That can't be ignored by any means, and I think it would be a major reason to enter a JV in an emerging market. You can advertise all you want, and have a great product, but without a way to reach your customers, you won't see success. I think this thought process also goes hand in hand with your next to last paragraph about strategy. The distribution strategy should be flexible in different countries if possible, right? Perhaps one section of land (and hence, customers) can only be accessed by train, and another can only be traveled to by car and truck. The strategy then has to change based on the costs and time of the distribution process as well. - I think you mention (and include) this by saying: "The best business strategy for most MNCs when expanding to such a diverse culture would be to allow each business unit discretion regarding how they approach their unique market. However, if a universal strategy must be implemented then the MNC will be forced to conduct extensive due diligence prior to entering the market to ensure that their strategy will maximize their growth and profitability in all of the cultures within a given country. " |
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| Kevin Toler | Aug 3 2012, 11:38 AM Post #3 |
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Jeremy, this is an excellent article review. To second Nick's response, I think that the most interesting portion of the article is the concept that not all JV's are beneficial in an information gathering sense. We assume that a local company would have already identified the strengths, weaknesses and opportunities in their existing market, but there is truly no guarantee that they see the business landscape through the same lens as the MNC. I would have to imagine that the frequency of a JV being truly beneficial vs. being forgettable is still favorable, but it is certainly some food for thought that rushing to a JV strategy is hardly the beginning of every solution. I believe that due diligence is vital in every business venture, but being cautious can quite often leave you on the sidelines while another company takes the reigns and charges right past you. Striking a balance between sound decision making and expedient response times is something that all companies must struggle with and something that large MNC's use as a source of competitive advantage. |
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12:39 AM Jul 11