Assignment#8

Assignment#8

Article#1 The Choice Between Joint Ventures and Acquisitions in Foreign Direct

Investments: The Role of Partial Acquisitions and Accrued Experience

Summary

Most of the firms invest in the foreign countries by using and utilizing their own resources with that of the local firms. The firms do this mostly to avoid the liability of the foreigners. The joining of the assets between the local firms can be in the form of acquisitions or joint ventures. It is always critical for most of the managers to support the acquisition or the joint ventures. Also most of the mangers today are aware that there two critical factors involved when deciding for either the joint venture or the acquisitions. One of the factors is that today there many forms of acquisitions like pure partial acquisitions, shared partial acquisitions and full acquisitions. Similarly another factor is the role of the experience which has to be accrued by the investing firm, when it decides to carry out investments with the help of the particular entry mode. This article deals with both of these factors and presents and in depth analysis. As compare to the local firms the foreign firms had to face a lot of challenges when they enter the foreign firm. When any foreign firm enters into the new country it usually has less knowledge about the local markets like about the culture taste and the business practices of the people of that country. This risk can be reduced when the foreign firm enters the domestic market through the acquisitions of the local firms or the joint ventures with the local markets. Both of these entry modes will prove to be helpful as the foreign investor will be able to get the local knowledge, local resources and legitimacy through this.

I agree with the logic given in this article, as the foreign company always faces difficulty entering the new markets of which it has knowledge. So in this regard both the entry modes that are the acquisitions and the joint ventures will prove to be successful for the new firm entering the new country or market. As by acquiring the local company it will have the all the local knowledge than it might need in order to operate effectively. Similarly, the joint ventures will also be helpful in the same way to the foreign firm.

Article#2 Dynamic Alliance Formation: The Role of Partner's Partner in a

Structural Balance Approach of Dynamic Networks

Summary

It has been observed that the strategic alliances with the business partners contain some incentives and risks as well. This article mainly focuses on the role of the risk and incentives in the strategic alliance partnership between the competitors and the partners. Strategic alliance is an important part of most of the modern businesses. The firms can overcome most of their weaknesses, enhance performance and create value by building an alliance with others. There are incentives for the firms in building the strategic alliance as they can use the resources of their partners. There are also some risks for the ...