Strategic appeals in cooperative arrangements

Question

What are the strategic appeal cooperative arrangements between foreign and domestic companies?

Answer 1

Cooperative arrangements between foreign and domestic companies have strategic appeal for purpose besides gaining broader access to attractive country markets like:

i. To capture economies of scale in marketing and/or manufacture.

ii. To fill holes in knowledge of local markets and/or technical expertise.

iii. To share dealer networks and distribution facilities.

iv. Allied companies can direct their competitive energies more toward shared rivals and less toward one another.

v. To get from the partner’s local market knowledge and working relationships with main officials in host-country government.

vi. To gain agreement on technical principles.