The paper "IBS Examination" is a great example of a Business assignment. Foreign firms often enter into a strategic alliance of international joint ventures for many reasons. One important reason is the ease of market entry. Due to advances in transportation, computer technology, and telecommunication, entry into international markets by foreign companies has been made easier. Further, entry into foreign markets is often associated with benefits such as the economies of scale as well as the scope related to marketing and distribution. Notably, entry into an international market as a lone firm is often accompanied by considerable costs thus beyond its capabilities.
However, when entering into a foreign market through alliances of international joint ventures, a firm will benefit from rapid market entry while maintaining the cost down. Besides, choosing an international joint venture alliance as a firm’ s entry mode to a foreign market addresses foreign market obstacles such as hostile government regulations as well as entrenched competition. The other important benefit is related to risk sharing. Risk sharing is often considered as a typical undertaking in any cooperative undertaking more so when there are instability and uncertainty in a particular.
It is also a common undertaking where a new market has just opened up thus sharing risks becomes predominantly significant. Besides, the competitive nature associated with running a business often makes it difficult to enter into a new market or launch a new product. Therefore, international joints ventures help in reducing or controlling a firm’ s risks. Shared expertise and knowledge is the other important benefit that comes along with international joint ventures. Typically, a firm can be competent in some areas but lack expertise in other fields.
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