Joint Venture Case Study

Crossing national boundaries is essential for gaining competitiveness in the present era. So companies are expanding and for this purpose, joint ventures are increasingly becoming common these days. The concept is also called internationalization (Beamish and Lupton, 2009) which is the result of the shift to more customized demands, core competency focus and desire to achieve economies of scale. There are many underlying reasons and benefits for such joint ventures. In some countries, this is the only way to engross in foreign business, for example, Maxico has requirement that all foreign investments in the country must undergo joint venture with Maxican firms. Moreover governments now have more involvement and interest in private business

despite of all the threats some of the multinationals are able to gain success in serving this group of economy which are living their daily lives on a few dollars only. Companies still consider that profits in this market are vague and not consistent. The successful industries in this market include the telecommunications, fast moving consumer goods industry (FMCGs) and medicine industry. These corporations were unable to reduce the costs and prices to serve poor consumers. The research studies have shown that only of the corporations who served poor population were able to establish the business with 100,000 or customers in different regions like Africa and these corporations served 1 million customers in India. For example Procter & Gamble invested the amount of more than $10 million in its pure water brand “PUR” for serving bottom of pyramid market. Eventually the sales were not enough therefore Procter & Gamble has to shift the number of products as charitable items. Sourcing the producers from bottom of pyramid is also not an easy task. Large companies use to integrate small suppliers in their value chains in order to access the bottom of pyramid market (Karamchandani, Kubzansky and Lalwani,