An International Joint venture is a company owned by two or more companies from different countries (ie. French-Chinese company, Saudi Arabian-Vietnamese Company). This is a popular action taken as companies attempt to explore different possibilities, traverse a new market landscape and increase its revenues; along with it is also the risk of falling in the pit.
There are a lot of success stories in the history of the field from small to medium sized businesses to corporate giants/Transnational and Multi National Corporation like Monsanto, Novartis and Dupont. Profit and economic power increase, new job opportunities for people, creation of new products and services, periodic celebration of the company's increased revenues, the list goes on. These companies are certainly proud of their achievements.
In most cases, the partnership between a foreign and a local company will open a lot of opportunities for latter. Specifically, its transfer of technology and increasing the chances of increasing its revenues through exchange of marketing strategies with a foreign company are the most significant benefit for the local company.
Music to the ears as it may sound; this is not always the case. Try to search some of it on the net and you will certainly find at its least - organizational issues such as disputes, reluctances to a number of conditions in the venture, etc.; at its best – joint venture breakdowns. Most of these dilemmas occur when companies fail to recognize the importance of a specific agreement. In the case of the Wahaha Company, a Joint Venture between Danone, a food company in France and Hangzhou Wahaha Group, the largest beverage producer in China; a number of issues occurred before ending their long-term business relationship.
There are a number of reasons for the breakdown. To some extent, there were cultural issues between China and France that have been brought up like Zong's (Hangzhou Wahaha Group) claim of '"unequal treaties", conflict of interest between both parties in investments and shares, and the differences in their marketing strategies. This resulted to a longer legal battle between the French and the Chinese company, throwing a number of charges against each other. 'Forbes', a business model hailed as the 'showcase' joint venture, in addition, featured this in 1996.
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