Entry modes - Alliances/ Joint ventures

4 important questions on Entry modes - Alliances/ Joint ventures

What is the challange in an Alliance?

learn as much as possible from this partner while giving away as few of your own FSAs as possible (learning race)

What is a joint venuture?

firm A from country 1 and firm B from country 2 join forces and jointly establish a new firm C in a foreign country, either country 1, 2 or a third country (classic example: Sony and Ericsson)

What is the difference between Alliances and Joint ventures?

Alliances are purely contractual while joint ventures are based on contracts + equity ownership
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What are the four reasons for  better performance by Asian MNEs?


  • They are intrinsically more willing to learn from alliance partners
  • They view alliances as an opportunity to develop new FSAs, rather than to reduce investment and risks
  • They define clear learning objectives and focus efforts on acquiring new knowledge
  • Their own contribution to alliances often involves complex, tacit process knowledge that is not easily imitated or transferable

The question on the page originate from the summary of the following study material:

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