East Meets West: Business Joint Venture

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East Meets West: Business Joint Venture

Case 1.2

East Meets West: Business Joint Venture

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Questions & Solutions:

  1.  Why would a joint venture partner from a planned economy have difficulty understanding that the consumer is king or queen?

Answer:

Joint venture partners from a planned economy system often face difficulty in understanding about the business of their partner. Soviet Union is a region of planned economy system. They don’t give priority to their customers. But Americans aren’t like them. They give their most priority to their clients and customers.

Joint Venture:

It’s a strategic association where two or more partners join to operate the business, partnership to share markets, intellectual properties, knowledge and assets for profit. Partnering is very helpful to successfully fight the bigger competitions.

Joint Venture Partners:

It usually to dissolve after the objectives has been achieved. This kind of partnership is fairly common who wants to do business in a foreign country. Partners have many resources, so that the venture could be succeed and they can earn a great amount of profit.

Planned Economy:

A planned economy is an economic system in which inputs are based on direct allocation. It may carry out in a decentralized, distributed or centralized manner depending on common economic institution. Government of Soviet Union owns everything and every business in their region.

Difficulty in Understanding:

In joint ventures, two parties have always misunderstanding situation. In fact, for that sometime joint ventures fail to do business. So, there should be a mutual understanding among parties and their rules and regulations have to be less hard to their partners.

Consumer is the King or Queen:

Soviet Union business firms sell a product to the consumers, but they don’t give any facility for that product to them. That’s indeed a fault of Soviet business firms. It’s kind of autocratic system like, “Take it or Go away”. On the other hand American business firms’ conception is “Consumer is the King or Queen”. Because of thinking about the future of their business, they want to make their clients and customers happy and want to achieve their loyalty by giving many facilities. It’s the conception why American businesses are successful in the world market. Because, they always keep their customers happy.