17. International Joint Venture Anheuser-Busch (which is now part of AB InBev due to a merger), the producer of Budweiser and other beers, has engaged in ajoint venture with Kirin Brewery, the largest brewery in lapan. The joint venture enabled Anheuser-Busch to have its beer distributed through Kirin’s distribution channels in Japan. In addition, it could utilize Kirin’s facilities to produce beer that would be sold locally. In return, Anheuser-Busch provided information about the American beer market to Kirin. Explain how the joint venture enabled AnheuserBusch to achieve its objective of maximizing shareholder wealth. Explain how the joint venture limited the risk of the international business. Many international joint ventures are intended to circumvent barriers that might otherwise prevent foreign competition. What barrier in Japan did Anheuser-Busch circumvent as a result of the joint venture? What barrier in the United States did Kirin circumvent as a result of the joint venture? Explain how Anheuser-Busch could have lost some of its market share in countries outside Japan as a result of this particular joint venture.

FindFind

International Financial Management

14th Edition
Madura
Publisher: Cengage
ISBN: 9780357130698
FindFind

International Financial Management

14th Edition
Madura
Publisher: Cengage
ISBN: 9780357130698

Solutions

Chapter 1, Problem 17QA
Textbook Problem

17. International Joint Venture Anheuser-Busch (which is now part of AB InBev due to a merger), the producer of Budweiser and other beers, has engaged in ajoint venture with Kirin Brewery, the largest brewery in lapan. The joint venture enabled Anheuser-Busch to have its beer distributed through Kirin’s distribution channels in Japan. In addition, it could utilize Kirin’s facilities to produce beer that would be sold locally. In return, Anheuser-Busch provided information about the American beer market to Kirin.

  1. Explain how the joint venture enabled AnheuserBusch to achieve its objective of maximizing shareholder wealth.
  2. Explain how the joint venture limited the risk of the international business.
  3. Many international joint ventures are intended to circumvent barriers that might otherwise prevent foreign competition. What barrier in Japan did Anheuser-Busch circumvent as a result of the joint venture? What barrier in the United States did Kirin circumvent as a result of the joint venture?
  4. Explain how Anheuser-Busch could have lost some of its market share in countries outside Japan as a result of this particular joint venture.

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