Moraine Valley Community College Potential Problems New Venture Face Paper
1) What are the potential problems that face the new venture?
2) What are the potential advantages of this venture for the company?
3) Would you recommend entering the joint venture? Why or why not?
4) If Greenwich Industries partners with Industro Viejes, would you recommend hiring local managers or American managers for the top and middle management positions? Why?
5) I need to comment the response, and also agree or disagree with it.
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I would say that the first thing that Greenwich Industries should do is get an idea of the current political popularity from the Santo Ignezeto people. Just because the current government has held power for 10 years doesn’t mean it will continue. With the government offering incentive packages to foreign companies, that will bring in competition for recourses. Their previous holding in that area could cause inaccurate goals as well. If Greenwich goes into the deal with the expectation that they will be successful because of their previous success, they may not consider all the aspects of the joint venture properly.
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.