SWOT analysis of Fonterra’s decision to choose to do a joint venture with Beingmate:
Strengths:
• Creation of synergy
• Consistent supply and Distribution channel for a high value product
• Spreading of costs and risks
• Collective vision Weakness:
• Control over the venture
• Reliability of Beingmate
• Politics
Opportunities:
• Entry into large foreign markets
• Fully integrated supply chain
• Foreign capital Threats:
• Pressure lobby groups & Extremists
Strengths:
A joint venture combines two or more company’s strengths and resources which “create synergy” (Paul, 2007). In this case it will allow both firms to “specialize in their area of expertise” (Paul, 2007) therefore allowing both firms to increase their individual profit by benefiting from each other’s expertise in certain areas. Fonterra can specialize in the collection of the milk and manufacturing process of turning the milk into “high quality infant formula” (Fonterra, 2014). Then Beingmate can then specialize in the distribution of the “high quality infant formula” (Fonterra, 2014) throughout China.
The joint venture will create a constant high quality supply and distribution channel for a “high quality infant formula” (Fonterra, 2014) First the factory in Durnum Australia produces “300MT of high quality formula per day” (Wilson, Spierings, Paravicini, & Leyland, 2014) Then this is taken from the factory in Australia to China by ship and distributed to all the Beingmate outlet stores. From the stores they
Why is partnering described as the highest-quality selling relationship? Why has the building of partnerships become more important today?
(1) Synergy creation: The businesses of both companies are famous and highly complementary to each other.
Joint ventures (JV) are a popular method of foreign market entry because they theoretically provide a way to join complementary skills and know-how, as well as a way for the foreign firm to gain an insider’s perspective on the foreign market. Since China began its market opening in 1978, joint ventures have been the most commonly used form of foreign direct investment (FDI), with about 70% of FDI in China in the 1980s and 1990s taking the form of joint ventures (Qui, 2005, p. 47). The Chinese company, as well as the foreign investor, has since 1978 been drawn to the joint venture form. Walsh, Wang & Xin (1999) note that from the Chinese
CHAPTER 21 PARTNERSHIPS SOLUTIONS TO PROBLEM MATERIALS | | | | |Status: | Q/P | |Question/ |Learning | | |Present |in Prior | |Problem |Objective |Topic | |Edition |Edition | | | | | | | | | | | | 1 LO 1 Partnership definition New 2 LO 2 General partnership versus LLC New 3
The foreign partner can also become a competitor by selling its production in places where the parental company is already in.
Corporations nowadays partner with each other because separately those firms have internals needs they cannot fulfill by themselves (Mohr & Sengupta, 2002). When businesses join in cohesive collaboration, each party begins to absorb each other’s knowledge and skills internally to acquire strengthen in marketplace (Mohr & Sengupta, 2002). All in all, inter-firm learning brings success in business partnerships if organizations select a project that offer innovative benefits that peak each partner’s interests, selecting a partner which suits the company’s style of the business, and managing joint projects which lead to developing a competence in working with others (Dickson, Coles, & Lawton Smith, 1997).
Mark greets the client in a polite and a professional tone. He does a great job acknowledging the client's concerns regarding the amount of the payoff.
Every potential partner has its strengths or core competencies which should not be compromised, hence a successful alliance is one which outcome are a
The lesson learned from this is that sometimes it is easier and faster reach a new market via joint venture, even though the profit will be less, but the company can save a lot of money in studying the new market trying to understand the new culture and how they purchase and also it can minimize the risk because there is a national brand supporting the new international brand, which gives confidence and security to the customers.
of the joint venture would benefit both companies if the terms of the agreement were favorable for both parties. It is also noted in the case that Sakari had
One night in 1981, Jeff Munks, a police office in San Jose, CA responded to an urgent call and arrived at a residence where a Vietnamese immigrant who spoke no English was screaming and waving his arms agitatedly. Next to him, his son was having trouble breathing. After Jeff guessed what had been happening and immediately called for an ambulance, he kept thinking about emergency situations where danger is exacerbated because of a language barrier. This resulted in Telephone Interpretation being offered since that year. This service connects trained interpreters via telephone to Limited English Proficient (LEP) Individuals. Cyracom International is one of those companies that provide critical
DefinitionEdit DefinitionSave to FavoritesSee ExamplesAgents, factors, or forces in an organization's external environment that are out of its control, and can directly or indirectly affect is chances of success or failure.
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.
* To structure deal as joint venture, which would be an economical approach to entering the market with the access to the technology, cross-marketing and profits. May bring, however, the lack of control to achieving "Anywhere, Anytime" vision.
Partners may provide the strategic alliance with resources such as products, distribution channels, manufacturing capability, project funding, capital equipment, knowledge, expertise, or intellectual property. The alliance is cooperation or collaboration which aims for a synergy where each partner hopes that the benefits from the alliance will be greater than those from individual efforts. The alliance often involves technology transfer (access to knowledge and expertise), economic specialization, shared expenses and shared risk.