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Joint Venture Creation by Tesco and Samsung Evaluation in Korean Market Essay

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Joint Venture Creation by Tesco and Samsung Evaluation
Tesco employed joint venture strategy to enter Korean market. Having partnership with Samsung Corporation, one of the largest local business group, gives a foreign investor like Tesco quite considerable benefits for creating synergy effects by using Samsung’s network for regional cooperation. Also local partner can be the one who studies market trends the best and keeps up to date with changing trends, fashion, and local tastes or preference. Through the business agreement with a partner in an overseas market, retailers would obtain an opportunity to learn entrepreneurial techniques, to gain existing retail units, and to increase opportunities for site acquisition, sharing entry costs and risks with its partner which in this case is Samsung. Moreover, joint venture enables foreign firms to establish a retail brand and store image in host markets. Besides, this market expansion mode smoothes the progress of the sharing of retailing management information.
However, in spite of those advantages from joint venture with local firms, some negative sides and challenges still exist. This entry mode can completely deliver retailing knowledge outside the home market as well. Nevertheless, despite the fact that forming a joint venture results in weaker control of the foreign market, the strong management contracts between both parties can prevent the knowledge shift to certain extent. Other general disadvantages of joint venture are lack of communication, lack of assuming responsibility, and unclearly defined objectives among partners may cause negative effects to business. Difference in the culture and style of business and Imbalance in the share of capital, expertise, investment may also lead to poor co-operation and friction between the partners. And in order to meet those challenges, it requires time and efforts, which means increasing in investment costs, to form the right relationship and understanding for...

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MLA Citation

"Joint Venture Creation by Tesco and Samsung Evaluation in Korean Market". Anti Essays. 10 Dec. 2018

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APA Citation

Joint Venture Creation by Tesco and Samsung Evaluation in Korean Market. Anti Essays. Retrieved December 10, 2018, from the World Wide Web: http://snehaedu.com/free-essays/Joint-Venture-Creation-By-Tesco-And-546816.html