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Businesses and collaborations over time
Businesses over time have changed, a consequence of accelerated globalization causing the flows of goods and services worldwide to increase in an excessive way, which caused various brands to make presence in different parts of the world.
This gender that companies with the capacity to satisfy the national market project to expand to the international market. While these companies already have local experience does not guarantee success in new markets, which is why there are business models where they generate alliances that facilitate the entry of new products or new services decreasing risks and if it is possible costs.
The Joint Venture model is not a new trend, however, it is an effective strategy used by many companies, this is not only of great use for large corporate but also a useful tool for MSMEs and SMEs. The reason for this is the ease of accessing a new market through the experience of the local partner, it will help and give it advantages over its competitors since it has sufficient knowledge to break the cultural, social, economic, orothers, to shorten their differences.
There are two kinds of Joint Venture the first is "Equity Joint Venture" where a society is created, that is, a common company with its own legal personality but still controlled by them, an known example was the case of Sony Ericsson, this union meantlarge profits;And the second is "Joint Venture Corporation" or "Building Building" Joint Venture "by which, when signing, rights and obligations are generated for a certain economic activity, a clear example is that of McDonald´s and Coca Cola that are associated to have a joint growthand achieving a successful expansion.
To carry out the objective in common, the control, risks, benefits and responsibilities are distributed, however, the autonomy and identity of the participating companies are not affected, this unlike a merger since when signing the contractThe autonomy and identity of each one is maintained.
The basic elements they share are: skills, knowledge and resources;which encompasses the contribution of capital, technology, raw material or distribution channels.
The benefits are several such as the decrease in risks, increased productivity and competitiveness, entry of foreign companies to the destination and knowledge market. On the other hand, companies must count
With an effective and external effective communication because if not, they can have different interests that generate conflicts over the course of the agreement, they can also assume that a party has more benefits than the other, so it must be well established from the beginning in the beginningcontract. Know specifically the objectives and responsibilities are an essential part for the proper functioning of this contract.
It is necessary to have a good organization and culture to define, assign and harmonize the functions, tasks and responsibilities that correspond to each part This is implemented through roles, the issue of remuneration and incentives is also important, so it is necessary toConsider implementing distribution models and a homogenization of wages. In general, a “third culture” must be created to unify the people involved and thus be able to use the ability of all collaborators to the maximum.
This contract gives companies the option to develop a strategy creating the possibility of expanding or diversifying its activities according to the objectives or established planning. In the case of expansion, you can look for a multinational company to introduce a product or for the development of a product, changes can be made together with another company evolving traditional products to innovative products. On the other it is common to diversify business activity through Joint Venture since companies are introduced into new markets, offering new products corresponding to different fields of action.
The model must take into account the business level, the functional level (marketing, finance, human resources), and the operational level (departments, production managers) according to the objective set to know what resources will be assigned to carry out the activity andreaches the common objective.
As mentioned above, the Joint Venture is a strategy – to be able to enter a market other than the premises, so that companies that opt for this business model, instead of obtaining competition, join them to be able to achieveTHE INTRODUCTION TO THIS MARKET. They do not tend to have direct competition resulting in the new creation of a competitive entity achieving greater productivity capacity and with the possibility of covering more sectors, as well as positioning and prestige when entering a new market and thus also achieve an economic powerand obtain certain advantages over other
In addition to eliminating the competition factor, this business model offers the alternative to reduce costs and resources when carrying out internationalization resulting in the minimum risk when exposing capital, but always with the main objective of obtaining profits without greaterrisk.
Joint Venture is a model that can be applicable and is in force due to the emergence of new market sectors, as well as the new trends that consumers develop. If a company is considered outdated, lag. Either as a provider or receiver of information to achieve its objectives.
However, one of the main conflicts by exercising this business collaboration can highlight the conflict of interest that the parties may present since it will always seek to obtain the greatest benefit of this collaboration;in addition to a total or partial dependence on the other party, as well as integration or communication failures that may exist.
Also to complement or satisfy the objectives of the Joint Venture, various techniques can be introduced or elements of other business models so that business collaboration is satisfactory, such as the work methods carried out by other companies or our competition to our competition tolocal level so that the work can be improved internationally.
It is important to take into account the way in which business collaboration will be carried out, specifying whether it will be inside or outside the place or region where the company is.
In the same way, it is necessary to carry out an analysis of a possible business collaboration, taking into account our resources and if we have the ability to achieve a joint venture, as well as a previous analysis of our key partners at the local level to know if it is feasible to leave theplace of origin or even our value proposal;If it is attractive for an external client segment.
Sennheiser and Adidas where they unify fashion and sport. When Sennheiser saw that Runners and other athletes were an interesting niche for the headphones market, so he decidedYour target audience.
In this example, the union of two companies can be reflected where the objective is to cover a new trend thanks to the strengths that each of the companies have respectively where there is a feedback of information and the desire to expand the market and cover the needsof new possible clients and achieve market extension.
It is important that to create this business collaboration, the action plan that will be carried out is established from the beginning, taking into account the fragility, dedication, continuity, adaptation and measurement of the trajectory that the Joint Venture may have. In addition to considering whether it is really viable to establish a collaboration with another company and the capacity to be able to meet the needs of the other party, as well as the fulfillment of the business objectives that are established, but above all putting as priority our business objectivesbefore trying to meet the objectives of the other party.
From the evaluation of the above, a structure is established, the allocation of those who will make decisions, the conflict resolution procedure, the means for communication between companies and finally an organization and culture forms an organization and culture.
The Joint Venture, is a good option to the desire to achieve internationalization, because regardless of the temporality of collaboration, great benefits can be obtained, especially the knowledge of a new establishment area and the experience granted by the same.
Similarly, what makes the Joint Venture an attractive strategy is that it has the characteristic of being a collaborative relationship and with the intention of satisfying the same objectives and interests of both, in addition to being an important factor in countries asThey are in the process of development which also converts the Joint Venture as a contributor to the growth and economic development of a country, also for that reason it is important to perform an analysis of the macroeconomic, political and legal environment from which this business model is desired to establish.
- BBVA. (s.F.). Companies. Obtained from https: // www.BBVA.es/general/finance-vistazo/companies/joint-venture/index.JSP?FBCLID = IWAR06_NSVYNTBV1LDYZZ0WKBDOPBO5AAMQZYBNOLWFZGJMMNVSFZPQH5OJK
- Deloitte, m. (September 2017). Execution of a Joint Venture. Obtained from https: // cre100do.Es/Documents/11036/57824/Alliances+Deloitte/7b265ea4-D876-467A-94f3-909c27577373?FBCLID = IWAR1T17AFQHU9N_45CBAGIP9JLZT4SQ3NNUOB19YEX0C1UQMMXYT2IYLK7Y
- EAE Business School What is a joint venture and what benefits it contributes? Accessed April 29, 2019. Available at: https: // www.EAeprograms.es/blog/que-a-a-joint-venture-and-what-benefits-support
- García López Gerardo “Joint Venture, Generalities and Classification” [online] accessed April 29, 2019. Pages 487-490. Available at: https: // files.Juridics.UNAM.mx/www/bjv/books/8/3984/27.PDF