Question

Based on what you know about the risks and costs associated with entering a new industry, why would you choose to create a joint venture with Chery Automobile?

Answer 1

Answer:

Based on what we know about the risks and costs associated with entering a new industry, we would choose to create a joint venture with Chery Automobile because eof the following reasons as below

• Chery Automobile is a large organization and it will help the organization who is going to get joint venture with this group, as the other group will get benefited due to its lager presence in the China and global market.
• Chery will help in making the return from the investment because it has large network of customers and some of its existing customers may purchase new products from this joint venture, hence it will provide the reanimate customers for the new joint venture and will result in easy start for the JVs.
• Chery will help in finding the customers for the products because eit already has many customers and many new customers will get influenced by Chery grou and will willing to buy new products from the new JVs.
• Chery will help with its existing resources as it has larger set of resources and many resources will be made common for the JV which will result in lower cost for the new JV. Thus major cost saving in resources and facility creation for the JVs.
• Chery is well known corporate in China and help in getting China market share because if any JVs made with Chery, then China market is going to consumer major portion of that products and it will be due to brand name of Chery in China. Hence it will be benefited in many ways for the new entrant in the market.