See description Essay Example | Topics and Well Written Essays - 2000 words - 2

See description - Essay Example Further, a context of experience is provided by narration of a personal experience with a company that has used joint venture in foreign expansion. The paper finally concludes that, as apparent in the concept and the context, strategic planning, congruity between the national and organizational cultures between the two entities as well as communications play an important part in order for a joint venture to be successful. When an opportunity is beyond one companys ability in terms of knowledge and resources, most companies resort to forming joint ventures in order to take advantage of the opportunity. While these joint ventures can take place between any entities that wish to combine their expertise and resources for the hope of sharing the gains from the venture, joint ventures are more common on the international business arena (Rod 2009). With the onset of glottalization, joint venture is a usual entry strategy to another geographic market. There are many reasons why companies or entities would resort to forming a joint venture. For one, in many other geographic markets, the entry of an foreign entity is hindered by laws of the land (Makino et al 2007). It is very common that for foreign entities to enter the local market, they must do it by partnering with a local entity, and forming a venture, or an alliance (Chen, Park & Newburry 2009). In the case of the joint venture, the two entities share the stakes in the equity of the newly-formed JV entity. Depending on the terms of the agreement, in most international joint ventures, the local entitys major role is to serve as the gateway to the local market, sometimes in terms of marketing and distribution knowledge, or more depending on the agreement. This is another reason for a company that has global expansion plans to adopt joint ventures—local knowledge of marketing and distribution in order to offer targeted products to certain segments of the market (Makino et al 2007). By taking