International Joint Ventures
AR50126 Assignment Name: Mizanur Rahman
In submitting this assignment, I certify that all this material is my own work, except where I have indicated otherwise with appropriate references.
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Report on the ‘Sandford’ Joint Venture in East Timor
Date: 30th September 2011 For: George Jackson From: Mizanur Rahman
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Executive Summary Freemantle Construction operates in a domestic environment against ever increasing competition in a saturated market, trying to maintain market share during economic downturn. In contrast Sandford has a strong international presence in the hotel/leisure industry and is looking at diversification to improve their competitive advantage and compliment their current offerings. The opportunity presented by this Joint Venture (JV) will assist both Sandford and Fremantle in entering a new market. It will be challenging mainly because of the fact that both firms are from different industries and may have different goals/objectives along with differing management styles. Furthermore, the JV’s first project is situated in the Democratic Republic of Timor Leste (DRTL), which will have its own complexities to contend with, be it government/business policies or technology/skills shortages etc. The JV will have to consider a decision making processes throughout the partnership, which could be difficult, with each firm’s needs possibly being different. For a successful JV, the partners need to be honest, trustworthy, committed and focus on what will be best for the JV rather than on their own needs. Beamish (2008) quoted that firms enter JVs in order to create new products/services and enter new/foreign markets. This is the key benefit to this JV, whilst there are many risk factors to consider, the rewards will possibly outweigh this but only if all the obstacles and opportunities are correctly assessed and an appropriate strategy is agreed and implemented.
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Introduction This report was commissioned by Mr Benny Garstead.
In submitting this assignment, I certify that all this material is my own work, except where I have indicated otherwise with appropriate references.
0.0
0.1
Report on the ‘Sandford’ Joint Venture in East Timor
Date: 30th September 2011 For: George Jackson From: Mizanur Rahman
1.0
Executive Summary Freemantle Construction operates in a domestic environment against ever increasing competition in a saturated market, trying to maintain market share during economic downturn. In contrast Sandford has a strong international presence in the hotel/leisure industry and is looking at diversification to improve their competitive advantage and compliment their current offerings. The opportunity presented by this Joint Venture (JV) will assist both Sandford and Fremantle in entering a new market. It will be challenging mainly because of the fact that both firms are from different industries and may have different goals/objectives along with differing management styles. Furthermore, the JV’s first project is situated in the Democratic Republic of Timor Leste (DRTL), which will have its own complexities to contend with, be it government/business policies or technology/skills shortages etc. The JV will have to consider a decision making processes throughout the partnership, which could be difficult, with each firm’s needs possibly being different. For a successful JV, the partners need to be honest, trustworthy, committed and focus on what will be best for the JV rather than on their own needs. Beamish (2008) quoted that firms enter JVs in order to create new products/services and enter new/foreign markets. This is the key benefit to this JV, whilst there are many risk factors to consider, the rewards will possibly outweigh this but only if all the obstacles and opportunities are correctly assessed and an appropriate strategy is agreed and implemented.
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Introduction This report was commissioned by Mr Benny Garstead.
Citations: = 1996 words) Page 6 of 8 AR50126 Assignment Name: Mizanur Rahman Bibliography Aditjondro, G.J. (2001). East Timorese becoming guests in their own land [online]. Indonesia: Jakarta Post. Available from: http://members.canb.auug.org.au/~wildwood/febguests.htm [Accessed 27 September 2011]. Ansoff, H.I. (1965). Corporate Strategy:An Anylytical approach to business policy for growth & expansion. New York: McGraw-Hill. Beamish, P.W. (2008). Joint venturing. Charlotte, NC: Information Age Publishing. Berry, C.H. (1975). Corporate Growth and Diversification. Princeton, NJ: Princeton University Press. Bettis, R.A., Hall W.K. (1982). Diversification Strategy, accounting determined risk, and accounting determined return, Academy of Management Journal, 25, pp. 254-264. Carpar, N., Kotabe, M. (2003). The relationship between international diversification and performance in service firms, Journal of International Business Studies. 34, pp. 45-355. Cartwright, S., Cooper, C. (1996). Managing Mergers, acquisitions and strategic alliances: integrating people and cultures. 2nd ed. Oxford: Butterworth-Heinemann. Haendel, D. (1979). Foreign investments and the management of political risk. Colorado: West View Press. Hill, W.L. (2005). International Business: Competing in the Global Marketplace. International ed. New York: McGraw-Hill. Kirmani, S.S. (1988). The Construction Industry In Development: Issues And Options, Discussion Paper, Report INU 10, February, World Bank. Moghe, C.G. (2001) A framework for East Timor 's economic planning [online]. Indonesia: Jakarta Post. Available from: http://www.thejakartapost.com/news/2001/02/22/a-frameworkeast-timor039s-economic-planning.html [Accessed 27 September 2011]. Pearce, R.J. (1997). Toward understanding joint venture performance and survival: A bargaining and influence approach to transaction cost theory. Academy of Management Review, 22(1), pp. 203–225. Phatak, A.V. (1989), International dimensions of management, 2nd ed. Boston: PWS Kent Publishing Company. Porter, M. (1985). referred to in Hancock M.R. (2008) "Strategy in Construction" (ICM Module 6 work file. p. 2.6, University of Bath. Ronen, S. (1986). Comparative and Multinational Management, 4th ed. New York: John Wiley & Sons Inc. Rumelt, R.P. (1982). Diversification Strategy and Profitability, Strategic Management Journal, 3, pp. 359-369. Page 7 of 8 AR50126 Assignment Name: Mizanur Rahman Scullion, H. (1992), Strategic recruitment and development of the ‘International Manager’: Some European Considerations, Human Resource Management Journal, 3, pp. 57-69 UN (2010). East Timor Country Brief [online]. Australia. Available from: http://www.dfat.gov.au/geo/east_timor/east_timor_brief.html [Accessed 25 September 2011]. Wild, J. J., Wild, K. L. & Han, J.C.Y. (2000). International Business: an Integrated Approach. New Jersey: Prentice-Hall. World Bank (1984). The construction Industry: Issues and Strategies in developing Countries, Washington D.C.: World Bank. Page 8 of 8