Joint Venture

2514 Words Nov 7th, 2012 11 Pages
Joint Venture

The globalization strategy our team is going to explore for Moonglow is Joint venture. We are going to discuss the pros and cons to a joint venture along with some environmental factors that Moonglow needs to consider before deciding on a location. We are also going to explore different organization structures and give a recommendation on how to restructure Moonglow to succeed in the global market. Lastly, we will describe ways Moonglow can expand internationally while maintaining its eco-friendly practices and continue producing organic products.

According to Jones (2011) a joint ventures is a “strategic alliance among two or more organizations that agree to establish and share the ownership jointly of a
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Moonglow’s joint venture alleviates this limited knowledge. Our host nation partner is already accustomed to doing business in their country and already has the knowledge of the regulatory laws. Along with regulatory laws there are legal restrictions that prohibit certain resources to foreign businesses. Joint ventures make it easy to bypass these restrictions and allow us access to raw materials we may not normally have (Hall, 1984).

Along with the benefits of knowledge and resources, local governments favor collaborating with businesses in their country. Many foreign governments offer special incentives to outside countries if they enter into joint ventures. They see this as a way to bring employment, new technology and skills to their local people (Hall, 1984). This is a win win for everyone.

Just as there are pros to joint ventures, there are also cons. The cons to entering into a joint venture are flexibility, technology transferred, employees, and loyalty to the U.S. partners (Hall, 1984).

Moonglow may have limited flexibility when operating on foreign soil. Depending on the breakdown of ownership, depends on the flexibility Moonglow will have. That is why it is important to have everyone’s roles spelled out. Many foreign countries do not have the paten controls that we do in the U.S. Any technology that Moonglow brings into the joint venture has the

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