US-China Joint Venture: Performance Management System

[Name of the Institute]

Performance Management System

Introduction

The contemporary business environment can be ideally defined as a highly competitive and global entity. The companies have exponentially enhanced their operational goals, and have extended their presence in several countries throughout the world. The phenomenon of globalization is the primary factor which has contributed to the contemporary business environment. As the consumers from all over the global market have attained the access to virtually limitless brands and products, they have become highly empowered. The purchasing behavior of the customers as a result has become highly selective, as these customers are no longer loyal to a single brand. The businesses all over the world have had to adequately react to these conditions and become highly customer oriented (Baruch, 1995). The businesses must enhance their range of products and market reach so as to be able to satisfy the volatile demands of the consumers. This is the reason why the businesses look to enter into new international markets and seek to form joint ventures with local companies, in order to diversify their business portfolios and gain access to a wider target market.

ROI and the Process of Internationalization

Given the situation several businesses have adopted the strategy of forming international joint ventures, assuming that they will be able to enhance their revenue streams. Although this strategy enables these companies to gain access to a wider target market and enhance their overall organizational profits; these benefits will only be achieved if the process of internationalization is implemented adequately. It is not easy for companies to enter into new markets and form joint venture with the local firms. For an American company seeking to form a joint venture with a Chinese firm; there are numerous factors which have to be critically analyzed before this process can be initiated. The success of any business venture is dependent on the potential profits and return of investment (ROI), which is expected from it. In the highly competitive business environment of today, organizations cannot seek to undertake such major decisions, without conduction a comprehensive feasibility study. The companies should analyze whether such a move will help them achieve a sustainable growth model and achieve their long term goals. They should be adequately aware of the international market and the major trends in the native consumer market, and assess whether their brand and products will be adequately accepted and appreciated.

Discussion

American-Chinese Firm Joint Venture

America and China represent two of the strongest economies in the world, and these countries also consist of the strongest global consumer markets. Hence a joint venture between companies from these countries respectively, will allow both of the firms to attain a massive strategic advantage (Morris & Peng, 1994). The success of the joint venture will be dependent on the ability of the managers to provide the employees a set of measurable and achievable goals, which can be easily quantified and transformed in to a report form. This report will help the managers assess the effectiveness of ...