The paper "Main Aspects of IBS Examination" is a great example of a Business assignment. One of the commonest strategies that foreign companies enter the emerging market is through the establishment of the Alliance of International Joint Ventures. Many factors explain this trend. A joint venture allows two or more companies to join temporarily to carry out a particular project. One of the reasons why these foreign companies form alliances is to save money especially when the companies are dealing in capital-intensive industries such as gas and oil exploration. Alliances allow these companies to contribute financial resources making it easier for them to enter such markets. Another reason is to reduce costs of operation since they rely heavily on technology.
These companies can reduce their cost of operation and instead increase their profit margins by contributing money and bringing personnel together. The other reason is to gain a competitive edge in emerging marketing. The level of competition across various companies has increased and it is on this backdrop that these alliances are formed to enable foreign companies to compete favorably. The competition comes from both domestic and international companies already in operation. These alliances as well are formed to allow these foreign companies to gain access to foreign markets.
Some countries have laws that restrict foreigners from holding a certain level of investments in their domestic companies. Therefore, as a strategy to ensure they expand their markets, these alliances act as a catalyst, facilitating their entrance into these emerging markets. Risk sharing is yet an important motivation for the formation of alliances among International Joint Ventures. Sharing costs reduce the cost of the project as well as individual risk in case the project fails.
For instance, if two companies want to search for oil and gas in swamps and oceans, they may finance the project but, in the event, the project fails, then they will have to share the losses. This reduces the cost of the share of the risks for every company in the joint venture. Joint ventures as well as provide platforms to learn and acquire knowledge. These companies can share skills, knowledge, and resources to enable them to remain competitive in the market.