Joint Venture Essay

2533 Words Nov 26th, 2012 11 Pages
Joint Venture

The globalization strategy our team is going to explore for Moonglow is Joint venture. We are going to discuss the pros and cons to a joint venture along with some environmental factors that Moonglow needs to consider before deciding on a location. We are also going to explore different organization structures and give a recommendation on how to restructure Moonglow to succeed in the global market. Lastly, we will describe ways Moonglow can expand internationally while maintaining its eco-friendly practices and continue producing organic products.

According to Jones (2011) a joint ventures is a “strategic alliance among two or more organizations that agree to establish and share the ownership jointly of a
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The local partner in the joint venture usually provides the employees at the start, mainly because they know the law of the land. There may also be a lack of loyalty to Moonglow. It is important to know that the host partner is going to have the interest of their business and country first; Moonglow’s interest is going to come last (Hall, 1984). Now that we have looked at some of the pros and cons that come with joint ventures we are going to look at some factors that must be considered before Moonglow decides on a location. These factors are economic forces, customers, distributors/suppliers, competitors, and the culture and social environment. All these factors have an effect on Moonglow’s success. The most important factor is the economic state of the country Moonglow decides to expand to. The interest rate, exchange rate, and unemployment rate are ways to gauge how a country is doing economically (Jones, 2011). Moonglow will also need to know what the average employees wage level is to ensure they do not plan to pay employees to little or too much for the area they are in. Customers are the second most important factor, without them a business will fail. Moonglow is going to have to research to make sure the country they are expanding to have a customer base for yogurt, and are supporters of the go green initiative. Competitors will usually have an

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