Question

Write an analytical response to the paragraph below:

If I were the CEO of an MNC who decides to enter into Nigeria I would choose to have a joint venture. Because JV is more appealing due to some more stable highlights, compared to strategic alliance mode. According to an article, the differences are a strategic alliance that can “seal the deal” with no more than a handshake. And a joint venture is formed by a binding contract. A strategic alliance is not considered a separate legal entity; a joint venture is. And last, a strategic alliance is often forged to maximize the benefits and opportunities that both companies bring to the table. In a joint venture, the emphasis is often on limiting risk. (Wroblewski, M. T. ). Due to all these factors, this is why I think coming up with a JV is more secure and official to propose contracts in Nigeria or any other across the border countries. Also according to our textbook on page 281, it states that "companies acknowledge that the IJV has resulted in faster development and increased production capacity and that costs are shared without either company renouncing its independence." (Deresky, H). Since investing across borders can get messy and unofficial sometimes, doing a JV would be a better option, because of its benefits and legally binding contracts.  

Answer 1

answer-

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Response to the post-

I agree with your views because I think JV is more formal and legal way to expand a business in country like Nigeria. If i do business with another company under strategic alliance then i would not be able to seperate my legal identity which is not good for my business. I want to let Customers of Nigeria to know about my brand and business. Jv can help me to achieve that. The main con of strategica alliance which becomes the pro or advantage of JV is prevention from risk and liabilities.My company has to bear liabilities and risk of another company under strategic alliance as we share resources and liabilities but under JV this is out of the picture. Government regulations can impact business operations in foreign countries so when we have JV so we have legal contract to do business so government can not force us to not do busines in their country.

So , yes i agree with all you views and opinions related to expansion of business by JV.