MKT 360 Lecture Notes - Lecture 29: Joint Venture, Franchising, Overseas Private Investment Corporation

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If you"(cid:396)e (cid:374)ot o(cid:374) the (cid:396)ight side of politi(cid:272)s you (cid:449)o(cid:374)"t (cid:271)e a(cid:271)le to sell you(cid:396) p(cid:396)odu(cid:272)t. Political risks when going international: expropriation, terrorism, etc. How to set up not to lessen the political risks: joint ventures. Direct foreign investment: physical presence in that country you have a plant, employees. If you ha(cid:448)e physi(cid:272)al stuff you"(cid:396)e at (cid:396)isk. Joi(cid:374)t (cid:448)e(cid:374)tu(cid:396)e: it"s (cid:449)he(cid:374) you joi(cid:374) a fo(cid:396)eig(cid:374) (cid:373)a(cid:396)ket (cid:449)ith a (cid:373)a(cid:396)ket between you and the partner you build a third entity which is the company. If you ha(cid:448)e a(cid:374) i(cid:374)flue(cid:374)tial lo(cid:272)al pa(cid:396)t(cid:374)e(cid:396) they"(cid:396)e go(cid:374)(cid:374)a p(cid:396)ote(cid:272)t you. You ha(cid:448)e less i(cid:374)(cid:448)est(cid:373)e(cid:374)t, so it"s (cid:374)ot as (cid:396)isky as o(cid:449)(cid:374)i(cid:374)g (cid:1005)(cid:1004)(cid:1004)% Do(cid:374)"t put you(cid:396) (cid:373)o(cid:374)ey, (cid:271)o(cid:396)(cid:396)o(cid:449) (cid:373)o(cid:374)ey f(cid:396)o(cid:373) a local bank or local investors. If the gov. is thinking about taking that property, then that local bank or local investors are going to protect you: control of marketing and distribution.

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