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Market Economy and Joint Venture

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Market Economy and Joint Venture
This case is about Nora, one of the leading suppliers of telecom solutions in Malaysia. The case involves a possible joint venture with Sakari, the leading manufacturer in Finland of mobile phones and telecom systems. There is a large potential in the future development of telecom facilities in Malaysia and the two enterprises have discussed a joint venture. Nora is a leading supplier of telecommunication services in Malaysia. They are looking for a Joint Venture to manufacture and commission digital switching exchanges to meet the needs of the telecomm industry in Malaysia. They are interested in securing a share of RM 2 Billion contract from TMB with the help of the Joint Venture. Sakari’s current strategy was to emphasize global operations in production and R&D. It planned to set up R&D centers in leading markets including South-East Asia. However it did not have a wide marketing operation and relied on Joint ventures for the same.
With the stage set, we now turn to analyzing the negotiations that Sakari and Nora held and why these two companies could not find common ground to form a joint venture. Below are the SWOTS for each company as the venture is being pursued: NORA
Internal
• Strengths • Weaknesses
• Access to the Malaysian and Asian markets
• Global contacts and relationships have already been established. • Due to late entry in market, competition is very stiff
• No definitive time line in contract with TMB. External
• Opportunities • Threats
• Expand through Southeastern Asian- new area for Nora
• Will be able to meet the needs of Malaysian tech. industry (Indonesia) • Compatibility of the SK33 with Malaysian requirements
• Timeline- to finish the deal by the 5th year is fading

SAKARI
Internal
• Strengths • Weaknesses
• Acquire Nora’s technology which is better than their own and implement customization
• Previous experience in exporting • Due to late entry in market,


References: Hitt,M ; Dacin, M.; Levitas, E; Arregle,J; Borza,A. Partner selection in emerging and developed market contexts: Resource-based ...Academy of Management Journal; Jun 2000; 43, 3; ABI/INFORM Global pg. 449 Phatak, A. V., Bhagat, R. S. & Kashlak, R. J. (2009). International management managing in a diverse and dynamic global environment (2nd ed.). Boston: McGraw-Hill Irwin.
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