International Joint Ventures in Brazil´s Markets

Research Paper (undergraduate) from the year 2010 in the subject Business economics - Offline Marketing and Online Marketing, grade: 1,0, Munich University of Applied Sciences (Fakultät 09 für Wirtschafts-Ingenieurwesen: Master of Business Administration&Engineering), course: Foreign Direct Investment (FDI) and International Joint Venture (IJV) in Brazil, language: English, abstract: For several decades now, we are experiencing an unavoidable and strongly growing market globalization. Beyond the traditional export business, industrial globalization keeps penetrating the world¿s countries and markets under many different forms of international businesses and strategic alliances. This term paper describes, justifies and compares two forms of cross-border business expansion strategies into the Brazilian Market that a Multi-National-Corporation (MNC) may resort to: Foreign Direct Investment (FDI) and International Joint Venture (IJV). Their implementation strongly depends of the market type that a host country offers. A common denominator of both international market entry modes is the obviously advantageous presence of interests of the involved MNC¿s when trying to expand their businesses into host countries. This direct presence in a host country means additional speed to market and provides the MNC¿s far more possibilities of establishing, conducting and controlling international businesses, than the traditional export business. The generalizing statement made in the paragraph above is only meant to provide an introductory feeling on how the market of a host country determines the strategy for business expansion. Naturally, there are far more important facts and reasons to be considered that ultimately force investors into conducting extensive, deep and detailed analysis of not only the market conditions and structures found in pinpointed host countries of their interest, but much more must they make profound and accurate analyses of the socio-cultural and political dynamics that overlay the people which they will rely on, as well as work and cooperate with in the host country. Only a very careful and detailed preparation of their business expansion plan under all aspects involved will enable them to enter, expand, subsist and succeed in a host country. Needless saying here is that there is no easy common way out, since most host countries have very diverse cultures and customs that are seldom known to the interested investors. The dynamic issue of industrial globalization and international business expansion gets overly well reported on, as well as commented and documented in the world wide Internet. For this reason I chose to compile and comment relatively recent information obtained over the Internet, complementing and concluding it with some backing and legitimizing information derived from the UNCTAD and OECD annual reports.