INDEPENDENT

VENTURES

Erich Spencer Ph.D. - Associate Professor of International Business

The international business
environment

Independent Ventures
Managing International
Collaboration
Collaborative arrangements are dynamic

The motivation for collaboration can change over time

because of changes in:

The company’s capabilities

The external environment

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

Independent Ventures
 Problems with Collaborative
Arrangements

Relative Divergent Questions of

importance objectives control

Comparative Differences in
contributions and Culture clashes corporate
appropriations cultures

Independent Ventures
Problems with Collaborative
Arrangements
How to Dissolve a Joint Venture

Adapted from Pearson Education, Inc. publishing as Prentice Hall

Independent Ventures
Entry Modes

Strategic
Alliances
Independent
• Marketing ventures/Wholly
Exporting collaboration
Owned
• Licensing
• Franchising
Subsidiaries
• Joint Ventures

Independent Ventures
 International Investments

Direct (managerial Portfolio (financial

orientation) orientation)
• Total Control • Equity
• Joint Venture • Debt
• Mixed Venture

Independent Ventures
 ARE ALL WELL KNOWN
FIRMS EQUALY INVOLVED
INTERNATIONALLY?

Independent Ventures
 Home-, host-oriented & global

Home region Host region

Global
oriented oriented
• Wal-Mart • Daimler Chrysler • IBM
• General Motors • ING Group • Sony
• Ford Motor • Royal Ahold • Philips
• General Electric • Honda Motor • Nokia
• Mitsubishi • Santander Central • Intel
Hispano Group • Canon
• Coca-Cola
• Flextronics Intern.
• LVMH

Independent Ventures
 HOW THEY BECAME
INVOLVED INTERNATIONALLY

Independent Ventures
Non-collaborative Foreign
Equity Arrangements

Taking Control: Foreign Direct Investment

Freedom to Pursue a
Internalization Appropriability
Global Strategy

How to make FDI

Buying Greenfield Investments

Independent Ventures
 Non-collaborative Foreign
Equity Arrangements

Universidad de Chile
Independent Ventures International Business
 Non-collaborative Foreign
Equity Arrangements

Universidad de Chile
Independent Ventures International Business
Developing an
Independent Venture

Greenfield Operation

Acquiring a firm (100%)

Merging (progressive
ownership and control)

Independent Ventures
Advantages of an
“Independent Venture”

Control problems are lower or do not exist. Get rid of

potential conflicts and problems when defining future
business actions.

Are not in danger of transferring technology and know-

how to a potential competitor.

It should not share earnings with a partner for whom

the reward is much better as long as it takes a lower
risk.

Independent Ventures
Independent Venture

Independent Ventures
Managing International
Expansion
Country Attractiveness/Company Strength Matrix

Adapted from: 2013 Pearson Education, Inc. publishing as Prentice Hall

Independent Ventures