Evaluating Global Expansion
Greenwich Industries entered the Latin American market in the 1950s by forming a joint venture with Industro Viejes in Santo Ignezeto to manufacture bicycle parts. The joint venture flourished in the 1960s, and Greenwich eventually bought out 100% ownership. The company earned steady profits from the Latin American subsidiary until a military junta overthrew the government in the late 1970s. The ruling generals expropriated all foreign-owned companies, including the Santo Ignezeto bicycle parts plant.
Today Santo Ignezeto is ruled by a democratic government that has been in power for 10 years. Industro Viejes has approached Greenwich about another joint venture. The government is offering an attractive incentive package to attract foreign investment.
You have been assigned to travel to Santo Ignezeto and begin planning and staffing.
Ans.
The potential problems that may be face by the new venture as follows:
The new government may introduce new legal and regulatory forces which create problem to the venture as it has to adopt all the new regulations applicable to it.
Also this government has been in power for only 10 years so stability of current government is also a potential issue. As the government change previous rules and regulations will also change and again venture has to follow new rules and regulations.
The Greenwich Industries are able to keep its operations since 1950 so there will be no environmental problems but it has to face the cultural differences.
Also the risk related to international transactions as currency fluctuation risks will also face by the venture.
Evaluating Global Expansion Greenwich Industries entered the Latin American market in the 1950s by forming a...
Greenwich Industries entered the Latin American market in the 1950s by forming a joint venture with Industro Viejes in Santo Ignezeto to manufacture bicycle parts. The joint venture flourished in the 1960s, and Greenwich eventually bought out 100% ownership. The company earned steady profits from the Latin American subsidiary until a military junta overthrew the government in the late 1970s. The ruling generals expropriated all foreign-owned companies, including the Santo Ignezeto bicycle parts plant. Today Santo Ignezeto is ruled by...
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