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International Joint Venture-SPAR-FACTS Case

International Joint Venture-SPAR-FACTS Case Study

Executive Summary: A PREVIEW ORDER YOUR PAPER NOW

International joint venture is one of the strategy employed the multinational corporations that wants to have the full access of the foreign market. Research confirms that international joint venture foreign market entry strategy is more beneficial than the risks arising from the relationship. This report using the case study of the SPAR Australian to explore the advantages and disadvantages attributable to the international joint ventures. SPAR Australia also known as SPAR FACTS it is the joint venture between the international SPAR Group Inc. and Australian Face and Cosmetic Trading Services Pty Ltd (FACTS). Despite that SPAR Group had operating in Australian market since 1994, its operations expanded rapidly from 2006 when it formed a joint venture with FACTS. The report has found through joint venture SPAR Group has been able smooth access in the Australian, shared costs and risks with the other partner, reduced political risk and taken advantage of the combined synergies. On the other hand, the joint venture has also experienced several problems. For example, competitors such as Metcash employ anti-competitive behaviors with the intervention of the Australian. Secondly, small business which are major targets of SPAR Australia are either consolidating or closing down. However, besides the challenges, report analysis show that the benefits realized by the company are more than the risks.

Introduction

Over the past decades the demands of managing the international businesses have greatly changed. This phenomenon has influenced the strategies of managing the international ventures across the borders (Durmaz & Taşdemir, 2014, p. 48). The goal of every business is to develop, grow and expand with the aim of serving wide market coverage. As a result of the urge to reach market customers as possible businesses targets both local and international markets. Business operating in the international markets faces a number challenges such as adhering to the host country trade laws, hazard weather conditions, lack of the right labour, fluctuating exchange rates, resistance by customers to have standardized global products and services, host nation based differentiated approaches, flexible manufacturing technology and others. To management these challenges effectively it calls for the proper management of the international business operations by the multinational corporations to operate effectively and successfully. International joint venture is one of the most common strategy used by the business to operate in the international arena (Romeli & AbdShukor, 2016, p. 20). Ideally, joint venture joint venture partnership occurs when two business in two different or more countries enter into agreement to carry out business. This approach helps the company to explore international business without undertaking the full responsibilities associated with the international business operations. Instead, the large responsibility of overseeing business operations in the international market is left to the foreign company: END OF PREVIEW ORDER YOUR PAPER NOW

Sources 

Agarwal, S. & Ramaswami, S. N., 2012. Choice of Foreign Market Entry Mode: Impact of Ownership, Location and Internalization Factors. Journal of International Business Studies , 1(1), pp. 1-28.

Australian Chamber of Commerce and Industry , 2016. Spar Australia. [Online]  Available at: https://www.acci.asn.au/node/5443 [Accessed 15 September 2017].

Australian Chamber of Commerce, 2016. Australia must try harder, competitiveness report shows. [Online]
Available at: https://www.acci.asn.au/news/australia-must-try-harder-competitiveness-report-shows
[Accessed 15 September 2017].

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