Joint business activity. Joint venture activity and its legal forms

joint venture activity is one of the ways to penetrate the foreign market; This method involves combining efforts with commercial firms partner state to increase financial and production capacity.

The key feature of a joint venture is that the parties to the agreement are not debtors or lenders to each other. property required for joint activities, is not separated, so both parties are at risk and liable for the total debt in a shared manner.

Joint venture activities: types

It is customary to classify joint venture activities into 4 types:

• Licensing- the most common and simple way of joint venture. Wanting to enter the international market, the company enters into an agreement with the licensee, offering to take advantage of such advantages as a trademark, patent, scheme production process. As a result, both parties benefit different kind: the licensor enters a new market with minimal risk, and the licensee gets rid of the need to start brand promotion from scratch. Licensing is similar to franchising, however, the licensee, unlike the franchisee, does not have to pay royalties. Licensing also has disadvantages: firstly, the licensor has little control over the licensee, who, by inept activity, can harm the reputation of the licensor, and secondly, if the licensee's business is successful, the licensor may find that he has brought up a serious competitor.

An example of entrepreneurship in the form of licensing is the activity of the Coca Cola Company, which licenses the use of the concentrate required for the production of the drink (as well as the concentrate itself) to companies around the world.

• Contract manufacturing- the company finds a local manufacturer, qualified enough to produce the company's goods without sacrificing quality. The disadvantage of this method is the impossibility of constant quality control, the advantages are minimal risk and the ability to organize production faster than when opening a new plant.

• Contract Management– a large organization provides know-how (most often in the field of management), a local company forms capital. The subject of export in this case are management services. The disadvantage of this method is that the local company needs personnel qualified enough to use the know-how as efficiently as possible.

• Shared Ownership Enterprise. Local and foreign companies can create a new enterprise, which will be managed together. Also, a foreign investor can acquire a share of an already functioning business. This practice has pros and cons. The following are considered to be advantages:

Joint ownership is one of the common conditions for admission to the market of a foreign state.

Joint ownership reduces the risk that the firm will face a lack of financial resources.

The downside is that the parties may disagree on marketing, management, distribution of finances. A lot depends on national characteristics management: for example, American leaders tend to invest most profits in development, and this may run counter to the interests of local leaders, who, for example, decide to spend a large share of the profits on the payment of dividends.

joint venture activity is one of the ways to penetrate foreign; this method involves joining efforts with commercial firms of the partner state to increase financial and production capacities.

The key feature of a joint venture is that the parties to the agreement are not debtors or lenders to each other. The property required for joint activities is not separated, therefore both parties take risks and are liable for the total debt in a shared manner.

Joint: types

It is customary to classify joint venture activities into 4 types:

• Licensing- the most common and simple way of joint venture. Wanting to enter, the company enters into an agreement with the licensee, offering to take advantage of such advantages as a trademark, a scheme of the production process. As a result, both parties receive benefits of various kinds: the licensor enters a new market with minimal risk, and the licensee gets rid of the need to start brand promotion from scratch. Licensing has similarities with franchising, however, the licensee, unlike the franchisee, does not have to pay. Licensing also has disadvantages: firstly, the licensor has little control over the licensee, who, through inept activity, can harm the reputation of the licensor, and secondly, if the licensee is successful, the licensor may find that he has brought up a serious competitor.

An example of entrepreneurship in the form of licensing is the activity of the Coca Cola Company, which licenses the use of the concentrate required for the production of the drink (as well as the concentrate itself) to companies around the world.

• Contract manufacturing– finds a local manufacturer qualified enough to produce the company's products without sacrificing quality. The disadvantage of this method is the impossibility of constant quality control, the advantages are minimal risk and the ability to organize production faster than when opening a new plant.

• Contract Management- a large organization provides (most often in the field of management), a local company forms. The subject of export in this case are management services. The disadvantage of this method is that the local company needs personnel qualified enough to use the know-how as efficiently as possible.

• Shared Ownership Enterprise. Local and foreign companies can create a new enterprise, which will be managed together. Also, foreign can acquire a share of an already functioning business. This practice has pros and cons. The following are considered to be advantages:

This exit strategy for the firm foreign market is based on combining its efforts with the commercial enterprises of the partner country in order to create production and marketing capacities. In contrast to exports, joint ventures (JVs) form partnerships, which result in the creation of certain capacities abroad.

International marketing uses four types of SPD:

• a) licensing;
• b) contract manufacturing;
• c) contract management;
• d) joint ventures.

Licensing is one of the easiest ways to enter a foreign market. “The licensor enters into an agreement with a licensee in a foreign market, offering the rights to use a manufacturing process, trademark, patent, trade secret, or some other value in exchange for a fee or royalty. The licensor gets a market entry with minimal risk, and the licensee does not have to start from scratch, because he immediately gains production experience, a well-known product or name.

As examples of successful licensing operations, F. Kotler cites the activities of the Gerber company, which in this way brought its products to the Japanese market for baby food. Another example is the international marketing activities carried out by Coca-Cola, which grants licenses various enterprises in different parts light, more precisely, provides them with trading privileges, since the company itself provides the concentrate necessary for the production of the drink.

However, licensing also has the potential disadvantages that the licensing firm has less control over the licensee than it does over its start-up. In addition, in the event of a major success of the licensee, the profits will go to him, and not to the licensor. As a result, entering the foreign market in this way, the firm can create a competitor for itself.

The second type of SPD strategy is contract manufacturing, i.e. conclusion of a contract with local manufacturers for the production of goods. This method, in particular, was used by Sears when opening its department stores in Mexico and Spain, finding qualified manufacturers there who could manufacture many of the goods it sold.

This way of entering the foreign market also has disadvantages. Applying it, the company controls the production process less, which is fraught with the loss of potential profits associated with this production. However, contract manufacturing gives the firm the opportunity to expand its activities in a foreign market faster, with less risk, and with the prospect of entering into a partnership with a local manufacturer or buying his enterprise.

Another way to enter the external market, related to the SPD strategy, is contract management. With this method, the firm provides a foreign foreign partner with know-how in the field of management, and he provides the necessary capital. In other words, the firm does not export goods, but rather management services. This method was used by the Hilton company, organizing the work of hotels in different parts of the world.

This way of entering the foreign market is characterized by minimal risk and income from the very beginning of activity. Its disadvantage lies in the fact that in order to enter the foreign market, the company needs to have a sufficient staff of qualified managers, who can be used with greater profit for themselves. To this method it is also inappropriate to resort to the case when the independent implementation of the entire enterprise will bring much larger profits to the company entering the foreign market. In addition, contract management for some time deprives the firm of the opportunity to develop its own enterprise. Finally, another way to penetrate the foreign market is to create a joint venture. Such an enterprise is a combination of efforts of foreign and local investors of capital with the aim of creating a local business enterprise, which they own and manage jointly. There are different ways to start such an enterprise, for example, a foreign investor may buy a share in a local enterprise, or a local firm may buy a share in an already existing local enterprise of a foreign company, or both parties may jointly create a completely new enterprise. A joint venture may be necessary or desirable for economic or political reasons. In particular, entering a foreign market, a firm may not have enough financial, physical or managerial resources to carry out the project alone. Other possible reason Preferences of a joint venture - the only way a foreign government allows goods of foreign production to the market of its country. The described method, like others, is not without drawbacks. Partners from different countries may disagree on issues related to capital investment, marketing and other business principles. For example, many American firms, when exporting capital to certain countries, seek to use the earned funds for re-investment in expanding production, and local firms in these countries often prefer to withdraw these receipts from circulation. American firms play a big role in marketing, and local investors often rely solely on sales organization. In addition, the creation of joint ventures can make it difficult for a multinational company to implement specific policies in the field of production and marketing on a global scale.

In joint business activities, a commodity producer organizes business in foreign markets with the involvement of local partners or partners from third countries. At the same time, the parent company is not the full owner of the joint structures being created. Forms of joint venture activities: contract manufacturing; international licensing; international franchising; joint venture; strategic alliance; contract management.

Contract manufacturing- a foreign firm, in accordance with the concluded agreement (contract), transfers to some enterprise the manufacture of certain products, which the firm itself sells in attractive markets for it. International Licensing - involves the transfer by the firm (licensor) of the right to own something to a foreign enterprise (licensee), which represents some value for the latter, for which he agrees to perform certain work or make an agreed payment. This right finds its expression in obtaining a license by its applicant.

International franchising- the right to act on behalf of a large firm (franchisee) is obtained by a small firm or a private entrepreneur (franchisor) in a foreign market as a result of a contract concluded between them. In accordance with such a contract, the franchisee generally transfers to the franchisor the right to use his name, trademark, technology, and business management systems.

Direct investment involves the creation of its own subsidiaries controlled by the company. The structure through which the firm conducts its business activities in a separate foreign market is 100% owned by the firm. Among the own structures created by the company, for entering certain foreign markets as part of direct investment, preference is usually given to:

Trade missions;

Foreign trade affiliates - a structural subdivision of the company in a specific foreign market

Foreign trading companies - own commercial enterprise operating under general management parent company and in accordance with local laws

Foreign enterprises - located in one of the countries in which the company has its subsidiaries and sells goods of a certain assortment group.

Regional centers;

transnational corporations.

The choice of the method of entering the foreign market affects the efficiency of the further functioning of the company. Factors:

Internal factors: the size of the firm and its experience in foreign markets. Smaller firms are better off taking advantage of export opportunities because they do not have the resources to exercise a greater degree of control over operations. Availability international experience. Product characteristics.

External factors: social and cultural differences in individual countries, the presence of business risk in them, the size of the market of each of the countries and its growth rate, the presence of trade barriers, as well as the level of competition and the availability of distribution channels.

Factors characterizing the degree of attractiveness this method entering a foreign market: the level of risk, the possibility of exercising control and flexibility. If not willing to take a lot of risk, the firm will choose direct or indirect export or licensing methods, as they require less financial involvement or managerial resources.

Factors characterizing transactions in foreign markets.

Joint ventures allow you to share the risk, financial obligations and costs of setting up local distribution networks and hiring local staff. At the same time, significant efforts are required to negotiate the creation of joint ventures and to manage them. However, the method that requires the least resources and effort and is associated with the least risk promises the least benefits and threatens with missed opportunities.

When choosing a method to enter a foreign market, it is important to consider the degree of control that the management of the company will exercise over operations in international market. The level of control is also closely related to the level of resource participation.

Indirect exports offer the least control over the terms of overseas sales. Maximum control can only be achieved in own subsidiaries with direct investment.

In the practice of modern international business, various, including quite flexible, forms of international cooperation have been developed, which include:

co-production - the manufacture of a complex product or its component by one of the foreign partners;

· contract management - transfer of know-how in the field of management by one of the partners to another;

· franchising - the issuance of a license for a certain activity with the provision of additional managerial, marketing and technological support;

· strategic alliance - a formal or informal union created to pool resources to solve the problems of reorganization, increase market efficiency, etc., or achieve "scale effects", or for other purposes;

· joint venture - one of the common forms of strategic alliance, associated with the creation of a new company by legally and economically independent enterprises;

· multinational company - the most "rigid" form of international cooperation, based on the mechanism of equity participation and/or other methods of corporate control.

A joint venture is an international firm established by two or more national enterprises for the purpose of full use the potential of each of the parties to maximize the beneficial economic effect of their activities. It is a type of enterprise with foreign investment and, in accordance with the current Russian legislation, is defined as an enterprise with equity participation of Russian and foreign investors. An important sign joint venture it should be considered that among its founders (participants), along with the national one, at least one foreign investor.

The concept of an international joint venture is used to refer to enterprises (firms) jointly owned by two or more owners (legal and individuals) based on mixed ownership different countries.

Important incentives for the creation of joint ventures are the difficulties of independent penetration into foreign markets, insufficient knowledge of the foreign economic environment and the need to combine the efforts of partners in the face of growing uncertainty. economic development, and sometimes national legislation restricting 100% foreign ownership in certain industries and areas. Special meaning at the same time, it belongs to the exchange of organizational, managerial and technological experience, the mutual use of the sales and service infrastructure of partners.

The goals of a joint venture may be different. The main ones and the most common ones are:

1. Obtaining modern foreign technologies (in contrast to traditional licensing in joint ventures, the seller of licenses becomes a co-owner of the enterprise using them, who is extremely interested in obtaining high profits), overcoming barriers of protectionism in the international transfer of technologies;

2. increasing the competitiveness of the product in the market; expansion of export of products, access to the foreign market due to:

Studying the specific needs of foreign markets, conducting a set of marketing activities;

Organization of production in accordance with the quality parameters characteristic of the world market or in accordance with the standards adopted in the countries where it is planned to sell it;

Entering the markets of countries that apply strong trade protectionism and restrictions on foreign investment without the participation of local enterprises and firms.

3. attraction of additional financial and material resources, the possibility of using the resources at the disposal of one of the founders of the joint venture at prices significantly lower than the average prices of the world market;

4. reduction of production costs based on the use of transfer (intracompany) pricing, cost savings for product sales;

5. improvement of material and technical support by obtaining from a foreign partner scarce material resources, semi-finished products not manufactured by them, components and parts (“screwdriver” production).

The emergence and spread of joint ventures as one of the forms of coordinated activity of two or more partners aimed at achieving a common goal was facilitated by the processes of internationalization of the economies of different countries, an increase in the export of capital. A certain influence on the development of joint ventures is exerted by integration trends in the field of specialization and cooperation in production. Joint ventures as one of the promising organizational forms of management became widespread in the 1970s and 80s in the countries Western Europe and Asia, and then - in the countries of Central and of Eastern Europe, as well as the CIS.

Joint ventures have become a means of attracting advanced foreign technology and modern management experience. Thanks to them, the export of capital is facilitated, including in its productive form, investment projects, the implementation of which is beyond the power of one company. In addition, markets in new regions are easier to develop with the help of local partners, especially since enterprises with the participation of foreign and domestic investors often enjoy tax incentives. Being international in form, joint ventures have acquired a special status in the country of official legal registration. In all countries, the activities of joint ventures are regulated by special legislation, including tax, economic, etc.

Huge capacity Russian market, various Natural resources, skilled labor force are attractive factors for foreign investment in the Russian economy. In accordance with the current Russian legislation, joint ventures may be established in the form of business partnerships and societies.

In its own way organizational structure joint ventures may be classified as closed or open joint-stock companies, limited liability companies, etc., while the share of each of the parties in the authorized capital of the joint venture is strictly stipulated in founding documents. Distribution of profit occurs, as a rule, in proportion to the share of participation in the authorized capital of the company.

Distinctive feature The management structure of a joint venture is the equality of the parties in decision-making processes, control over the activities of the company, strategic planning. Operational-tactical leadership is carried out supreme body management of the company, appointed by the co-owners of the joint venture. The parity principles of company management allow each of the parties to derive the greatest benefit from joint activities and contribute to the development of business cooperation.

The management structure of a joint venture fits into the framework of traditional company management schemes (functional, product, divisional, matrix, regional, etc.) and depends on the nature of the activity, the number of parties involved in the creation of the company, the degree of diversification of production and services provided.

Being a fairly flexible organizational form of management that allows using the experience, financial and other resources of companies from different countries, joint ventures become a kind of growth points for new forms of management. The use of resources from different countries allows minimizing costs and maximizing profits, thereby increasing the return on invested capital of partners.

The creation of joint ventures abroad requires the solution of many management problems, taking into account the peculiarities external environment, stimulation work force. It is necessary to take into account the significant differences in the cultural, commercial, economic and other spheres of the countries participating in the creation of a joint venture. Personnel composition parent companies usually evaluate labor productivity, remuneration levels, labor safety differently and invest different assessments in the concept of subordination. There may be large differences in the organizational cultures of the two parent companies, in the strategy for using human resources. Cultural differences influence the formation of a joint venture, as they are reflected in differences in approaches to goals, strategies, human resource policies, development opportunities and difficulties, organizational relationships, communication priorities.