Answer to Question #264457 in Management for qtiee

Question

If you were an owner of an international and rapidly growing high-tech firm making sophisticated computer chips for medical equipment, (a) what do you think is the best approach to manage it and why? (b) Do you think an international firm should have local managers in all important posts? Why or why not?

Answer 1

Creating a third company with another partner is often the preferred market entry method, especially in emerging markets. A joint venture means that the company can take advantage of the partner's infrastructure, local knowledge and reputation. It can be the only method of entry in some markets.Joint ventures are a particular form of partnership that involves the creation of a third independently managed company. It is the 1+1=3 process. Two companies agree to work together in a particular market, either geographic or product, and create a third company to undertake this.Such companies may be more involved in marketing or research, and contract manufacturing allows them to produce goods to their liking without distracting them from their core business. Advantages of the approach are that it is less capital intensive, less risky, and has minimal complications when one chooses to exit.