JOINT VENTURE

Joint Venture

Joint Venture

Introduction

This report basically emphasize on the cross cultural issue. Corning is US based company and Vitro is Mexican based company. Both companies history indicates that they were earning large part of profit from joint ventures with other countries local companies. Taking considerations of only some similarities both companies decided for joint venture without prior study of the each others organizational culture. After joint venture both companies get benefits interims of quick market penetration and advanced technology sharing (Elangovan & Mohna 2011, p. 96). Though joint venture was financially performing good, after 25 months this venture dissolved, giving reason that both were failed to understand each others organizational culture. There were conflicts with management decision style, employee involvement in management, work approach and behavioral differences. This report provides detailed indication and analysis of the possible reasons of failure of venture. Possible recommendations are given for this venture if want to joint again. US business culture and Mexican business culture give more idea to the companies to keep in mind some cultural differences to get success (Hodgetts & Luthans 1997, p.58).

Corning's strategic predisposition towards a joint venture with Vitro

Corning is USA based oven-ready glass ware, fiber optics, environmental products etc. manufacturer company and Vitro is glass manufacturer Mexican company. Both companies have huge product line. Let me first explained what joint venture. A joint venture can be considered a specific type of alliance agreement under which two or more partners own or control a business.In joint venture each company contributes assets, has some equity and shares risk. Joint venures help companies to add to their resources and synergize their capacities for better results. The company 'Corning' has been taking advantage of synergization through joint venturing with other companies in its longs history (Kearney 2009, p. 74).

Over the last five years, Corning's sales from joint venture were over $3 billion, which contributed more than $500 million to its net income. Corning was realizing some similarities with Vitro in history, philosophy, culture, goal and objectives. To capitalize NAFTA corning was very eager for joint venture with Vitro. With such successful joint ventures history; Corning's main strategic predispositions toward joint venture with Vitro were below.

Corning's main strategic predispositions toward joint venture with Vitro

Mode of Market Entry-As Vitro has very high share of market in glass ware, Corning was able to get instant access to market in that region or that particular market.

Market Share-It was very easy for Corning to penetrate market quickly enough to obtain competitive advantage. As Vitro has already established distribution channel, Corning can get advantage of it with minimum spending of money (Kearney 2009, p. 74).

Bringing technology to market - Using technology developed, corning could bring it to the market through Vitro's joint venture to gain more market share and to develop another product's market as well. As Vitro was specialized in glass ware, Corning could use that technology and experience to develop new product.

Importance of understanding the culture of a potential partner before deciding on an ...