The Proposed Method

Joint Venture

Joint Venture market entry mode is done when two or more firms work together to create a jointly owned separate firm to promote the business. The proposed method of entry here is the 50/50 Joint Venture.

Advantages

The main advantages of using this market entry mode is by working with a local firm will let the company access to a variety of new markets as the local firm will have host of knowledge about local business in their country, the local firm will also be aware of many local contacts that will help with running of the business such as both arranging or using the existing distribution network and the supply chain. New and improved technology ideas are always a possibility when working with local firms as they usually have ideas that needs resourcing, local firm usually have the capital but not the technology. Working with the local firm will undoubtedly gain a wealth of experience both in the context of the nature of business and experienced technicians, managers and employees who all know exactly what they are doing and how everything works within a wine industry, the responsibility of sharing profits and productivity will keep both parties motivated as both firm have to accept any loses. Product exchange is also an advantage by working in a joint venture as both firms can offer each other products and services to sell through each other’s contacts and share the profit.

Limitations

Limitations of using this market entry mode is, there are often confusion and long debates when both parties are trying to agree on the strategic goals and targets for the company, the level of control of the business is limited as the other firm also have an equal equity share in the business, when working with a local firm, the minor problems such as language barriers, cultural differences and different