Case Analysis on Hp Vietnam

However they are also liable to pay debts equal to the percentage of the company they own. The pros of this are they can increase how much money is put into the company by raising capital. Banks will be more likely to lend to PLC’s due to them being more financially stable. However some disadvantages are that the CEO can make decisions they may not benefit the shareholders, which can cause disagreements there is also a risk that somebody will by so many shares that they actually take over the business. Another positive of this particular type of ownership is that you have a greater chance for expansion and growth as a company and organisation. This is evident in Tesco as they have acquired a selection of companies to add a sister companies and have been integrated into the Tesco brand. For example; in larger Tesco stores they have implemented ‘Harris + Hoole café’s as a sub-section of the Tesco store where people can have drinks and order food in traditional café fashion. Another disadvantage however will be that as you are a registered company you will have more rules and regulations you will have to abide by, for example minimum wage law and employee safety

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Advantages- Less liability for stakeholders. Ability to raise funds/capital in the form of stocks as needed.

G.G. Dess, G.T. Lumpkin, M.L. Taylor, A.A. Thompson, and A.J. Strickland III, Strategic Management (Boston, McGraw Hill, 2004) pp. 141-148.

The foreign partner can also become a competitor by selling its production in places where the parental company is already in.

Ownership advantages could be intangible assets like technology and information, managerial, marketing and entrepreneurial skills, organisational systems, access to intermediate or final goods markets, a production process, patent and blueprint. The ownership advantage includes some firm specific valuable market power or cost advantage on the firm sufficient to outweigh the disadvantages of doing business abroad. They are closely related to the technological and innovative capabilities and the economic development levels of source countries.

Hunger, J. D., & Wheelen, T. L. (2011). Essentials of strategic management (5th ed.). Upper

Analysis of Strategic Factors, Strategic Issues, Strategic Alternatives and Recommendations, Evaluation and Control and Summary)

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6. What general lessons regarding the management of joint ventures in entrepreneurial settings can you draw from this case?

No matter which leadership theory it is to apply, Fiorina’s leadership style in HP was relatively clear-cut: a task-oriented, autocratic, transactional leadership style, whichever way it is named.

It is because through the joint venture, the company is more familiar with the situation of the company there. The negative outcome is that the management system different between the company. So it is hard to make a decision making. It is because there is different opinion of each person.

One of the advantages of wholly owned subsidiary is that H&M has a free hand to establish the strategy for the subsidiary including marketing strategy, production, even window design. It enables H&M to keep all the profit from American market and don’t need to share profit with partners.

First the licensing may result in a firm's giving away its know-how that is giving away his competitive advantage to the competitor in the foreign market. Suppose Ford gives license to AvtoVAZ, one of the large Russian manufacture then it can start its own car manufacturing using Ford's know how. Second disadvantage is providing the license to the company there is no tight control over the subsidiary firm in foreign market. Ford wants to exploits the opportunity that it has in Russia by its own way. Licensee may not follow all instruction of Ford. The last problem with the giving license is that some terms of know-how can not be defined on a page or documented. Like service industry (Hospitality industry) that how to license the subsidiary for "how to well come and how to greet" as a part of the service.(Hill, 2003,p-215).

Hill, Charles W. L. and Gareth R. Jones. Strategic Management: An Integrated Approach. Mason, OH: South-Western Cengage Learning.