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International Investments
The global carmaker work investing automobile assembly facility Chennai, India a local partner. Explain potential reasons investment. Will company exercise a great deal control operation? Why ? Over areas company exercise control, areas cede control partner? If required resources http://hbswk
Automotive company: Investing in Chennai, India
While the automotive market of the developed world could be described as supersaturated, the market for cars in the developing world is growing. Establishing our company as a multinational firm could be an important cushion against potential economic downturns in the future. Our company, like so many automobile companies, was hard-hit by the economic recession. "On average, establishments with multinational ownership performed better than local competitors, but there was considerable differentiation in the role of foreign direct investment" (Alfaro & Chen 2010). Although all sectors of the global economy felt repercussions from the crisis, not all nations were equally hard-it and some areas of the world rebounded more swiftly than others. International diversification of one's assets can prove to be a considerable strength for...
A local partnership with an Indian company has the advantage of providing us with information about the market, including government regulations within the nation that might be difficult for a foreigner to decipher. However, "achieving a balance between the needs of different partners is crucial to the ultimate success of the venture once one moves into implementation and management" (Park 2008). Before embarking upon the venture, the two companies involved must come to a clear understanding of the advantages for both firms and the expectations both have for the relationship. Multinational ventures mean greater bureaucratic complexity, and when there are multiple managers in charge of a project, the leadership chain of command must be established early on, to avoid confusion. There must also be acknowledgement that the collaboration is a new entity, and neither firm can simply proceed as usual -- collaboration creates a new entity, given that it is a merging of two firm's cultures (Park 2008).
"Managers need to be aware of possible conflicts in marketing styles, extent of financial risk…
References
Alfaro, Laura & Maggie Chen. (2010). Surviving the global financial crisis. HBS. Retrieved:
http://hbswk.hbs.edu/item/6451.html
Park, Daniel. (2008).Managing alliances, joint ventures. B2B International. Retrieved:
http://www.b2binternational.com/publications/white-papers/managing-alliance-jv/
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