This case study paper focuses on defining the key criteria for selecting a joint venture partner on emerging markets to minimize the risks of the partnership failure. The literature dealing with general partner selection criteria is rich. Only a little research was, however, conducted in terms of emerging economies. Therefore, the study combines a theoretical model with an empirical evidence to extend knowledge in this particular area. The literature review results in four main partner selection criteria, such as human resources (tangible resources), local market knowledge (intangible resources) as well as business and governmental networks. An empirical research was conducted through qualitative interviews to challenge the theoretical findings. The sample consisted of two leading Austrian manufacturing companies operating a joint venture in India. Although those participants confirmed that local market knowledge and networks are crucial on emerging markets, they accommodate different perspective in terms of tangible resources. Moreover, they add that company control and local partner’s international experience are fundamental.
Table of contents
1. Introduction
1.1. Research question and objective
1.2. Research methodology
2. Theoretical review
2.1. Joint venture
2.2. Key criteria for selecting a partner
2.2.1. Tangible resources
2.2.2. Intangible resources
2.2.3. Partnership experience
2.2.4. Product
2.2.5. Partner compatibility
2.2.6. Culture
2.2.7. Networks
2.3. Emerging markets
2.3.1. Key characteristics of emerging markets
2.3.2. Key partner selection criteria on emerging markets
3. Methodology
4. Results
5. Discussion
6. Conclusion
Research Objectives and Key Topics
This paper aims to identify and analyze the critical success factors for selecting a joint venture partner in emerging markets, specifically targeting the Indian market, to reduce the high failure rate of international strategic alliances caused by inappropriate partner selection.
- Theoretical framework of partner selection criteria in emerging economies.
- Empirical analysis of two Austrian manufacturing companies operating in India.
- Comparison of literature-based criteria with practical, real-life findings.
- Identification of essential selection factors like business networks, company control, and local market knowledge.
Excerpt from the Book
2.2. Key criteria for selecting a partner
The partner selection is considered as one of the most important and complex steps in joint venturing. An exhaustive literature research presents a broad variety of criteria that should be taken into account during this process. Those criteria have been clustered into 7 selection categories and are described in the following section.
2.2.1. Tangible resources
One of the joint venture theories indicates that strategic alliances are being employed to gain admittance to the local partner’s resources and fill thus the internal resource gap. Another approach asserts that the company’s strategic partner itself is a resource which can be exploited. For example, Kadobayashi et al. point out that foreign companies can utilize local partner’s tangible assets, such as factories, equipment or land and thus shorten the time period of production initialization. Literature, in the context of resources, uses a variety of classification to cluster them in groups. For example, Barney identifies organizational, human and physical capital. He adds that companies perceive human and organizational capital as major source of competitive advantage because of their intangible characteristics and difficulties in trading. Moreover, Das and Teng develop the resource-based view further by stating that different impacts on strategic alliance can be caused by using various resources. Moreover, they point out the access to financial capital and physical resources, such as distribution channels, materials or production capacity as aspects of great importance in an international strategic alliance. In addition, Miller and Shamsie cluster resources in property-based and knowledge-based. They argue that while knowledge-based resources incorporate know-how and capabilities, property-based resources are connected with ownership rights (licenses, financial assets or physical resources).
Summary of Chapters
1. Introduction: Provides an overview of the importance of FDI and joint ventures on emerging markets and outlines the research objective.
2. Theoretical review: Examines general concepts of joint ventures, partner selection categories, and unique characteristics of emerging economies.
3. Methodology: Describes the qualitative multiple case study approach using semi-structured interviews with two Austrian manufacturing firms in India.
4. Results: Presents the findings from the expert interviews, highlighting the key selection criteria deemed crucial by the participants.
5. Discussion: Contrasts the theoretical findings with the empirical data gathered during the case study analysis.
6. Conclusion: Summarizes the key insights, acknowledges research limitations, and suggests areas for future quantitative research.
Keywords
joint venture, partner selection, emerging markets, tangible resources, intangible resources, business networks, case study analysis, Austrian companies, India, strategic alliance, management, competences, company control, governmental networks, internationalization
Frequently Asked Questions
What is the primary focus of this research?
The paper focuses on defining the key criteria for selecting a joint venture partner in emerging markets to minimize the risks of venture failure.
What are the core thematic areas covered in this study?
The core themes include joint venture lifecycle, partner selection categories (tangible/intangible resources), and the specific challenges and characteristics of emerging economies like India.
What is the central research question?
The research seeks to answer: "What are the key criteria for selecting a joint venture partner on emerging markets?"
Which methodology was employed to gather data?
The researchers used a qualitative multiple case study approach, conducting semi-structured telephone interviews with managers from two Austrian manufacturing companies, Mosdorfer GmbH and Kostwein Maschinenbau GmbH.
What does the main part of the paper address?
The main part encompasses both a comprehensive theoretical literature review and an empirical analysis of specific real-life examples from companies operating in the Indian market.
Which keywords best characterize this work?
The work is characterized by terms such as joint venture, partner selection, emerging markets, business networks, and company control.
Why did the study specifically focus on the Indian market?
India was chosen as a representative emerging market to ensure the comparability and relevance of the findings for the selected case study companies.
How does "company control" fit into the findings?
Company control emerged during the interviews as a vital, non-literature-defined criterion, with both participants requiring a majority share to maintain decision-making direction.
- Quote paper
- Filip Linhart (Author), Claudia Knoll (Author), 2014, Key Criteria for Selecting a Joint Venture Partner on Emerging Markets, Munich, GRIN Verlag, https://www.grin.com/document/289007
