Joint Ventures: Global experience and Chinese Practice

Under the background of economic globalization, with the advancement of science and technology and the improvement of trade level, the high-speed circulation of information and data has been promoted, so that managers can easily and quickly understand the market conditions around the world, timely adjust production strategies, coordinate production, and be reasonable and effective. At the same time, the flow of production factors is accelerating, which promotes the transformation of production from the domestic regional division of labor to the international division of labor. After the Second World War, economic relations have become more and more important in the entire international relationship. Multinational companies that have realized the large-scale flow of production factors in order to pursue economies of scale and maximize profits, invest and build factories in other countries through multinational investment activities, and multinational companies use their own In exchange for the qualifications to enter the investment country's market and form a new competitive advantage in the market, the investment country also hopes to improve the technical level of its own industry and enhance its product competition by learning the advanced technology and management models of multinational companies. force.
Joint ventures are the product of increasingly fierce market competition. One party hopes to avoid market barriers and market protections encountered when entering the local market through cooperation with local companies. The other party hopes that through joint ventures with foreign shareholders, it can be at the technical and management level. Achieve breakthroughs in the above-mentioned industry and enhance its own market competitiveness. As an important participant in the global trade market, the importance of joint ventures to the world trading system is self-evident. In the development of joint ventures, brand, as an intangible asset, is a valuable asset of the enterprise. The shaping and cultivation of a successful brand is hard-won, and often requires the efforts of many people and the hard work of several generations. Through long-term efforts, companies with advanced technology, stable customer groups and good service experience have established their own brands in the consumer market through their own efforts, and have a high reputation and influence in the industry. This is the core foundation of the competitiveness of many multinational companies. However, when joint ventures with foreign parties, in order to introduce capital and technology, many companies will sell brands, business reputation, raw material supply channels, product sales networks and other intangible assets at low prices or free of charge in exchange for the qualifications to enter the local consumer market. After the joint venture, the joint venture party uses the production capacity and sales channels of the famous brand of the superior company to promote its own products and launch its own brand. Due to its technical level, product quality and service experience, the joint venture has a great deal with the superior party of the two parties. The gap, after the introduction of the product, has caused a certain degree of damage to the reputation and value of the joint venture's own trademark. Similarly, many brands want to use the capital
and technology of foreign brands to promote their own development. The result is counterproductive. Foreign brands have successfully entered the consumer market with the help of local brands, and gradually replaced local companies of the same type with their own technological advantages. Therefore, under the governance structure in which foreign parties occupy the dominant management control and local enterprises lose corporate control, such as joint ventures, independent brands will gradually be weakened or even disappear eventually. To establish a joint venture, both parties to the joint venture, as the dominant party, must have brand awareness, establish a correct sense of competition, abide by the local market competition rules, and jointly promote the development of the local economy. In contrast, the other party should actively learn the advanced science and technology and management strategies of foreign-funded enterprises, strive to enhance its own strength, and promote the development of local enterprises.
Among joint ventures, foreign companies in a controlling position generally reject the independent innovation of joint ventures, and this is clearly stipulated in the joint venture agreement. However, if local companies cannot provide the necessary protection for their own technologies, and if they lose controlling rights or control rights, they will also lose their ability to develop independently. Without these rights and abilities, all the technological achievements accumulated by the company's massive investment belong to others, or are sunk, resulting in independent innovation that can only be ordered by the foreign party, and even the survival and development must be controlled by the foreign party. Normally, after the joint venture, the original technical R&D team of the local enterprise is disintegrated, and the technical talents are severely drained. When the foreign party uses its technological advantage to suppress the local enterprise, if the local enterprise fails to use the advantage of the joint venture to narrow the technological gap with the foreign business in a planned way, Can only do nothing when it fails to protect its own technology.
...

Купить