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Introduction
2.3 Consortium
2.4 Joint stock company
Conclusion
Introduction
Entrepreneurship development plays an indispensable role in achieving economic success, high growth rates industrial production. It is the basis of the innovative, productive nature of the economy.
Entrepreneurship creates mechanisms for coordination, development of a development strategy through the market and competition, links between business entities. Thus, entrepreneurship as a business entity and a special creative type economic behavior is an integral property of all factors for achieving economic success.
Entrepreneurship can be carried out both in the form of personal and joint ventures. Personal entrepreneurship is carried out by one individual independently on the basis of property belonging to him by the right of ownership, as well as by virtue of another right that allows the use and (or) disposal of property. Joint venture is carried out by a group individuals on the basis of property belonging to them on the basis of common ownership, as well as by virtue of another right that allows joint use and (or) disposal of property.
In recent years, one of the leading forms of business has become international joint venture, which includes a variety of cooperative ties: from inter-company cooperation and the creation of joint ventures to large-scale integration projects within the framework of regional and interregional associations. Joint entrepreneurship changes the structure of world production and exchange, accelerates the process of globalization of the world economy, i.e. formation of the world economy as a whole. Thus, the relevance of this topic is beyond doubt.
The purpose of the work: to get acquainted with the concept of entrepreneurship, its forms, and in particular in the form of joint venture.
The work consists of an introduction, the main part, a conclusion and a list of references.
1. The essence of entrepreneurship
Entrepreneurship has been and will be the main component economic system of a society that calls itself civilized, this has been proven by history itself. Therefore, the transition to market relations poses many complex tasks for our society, among which the development of entrepreneurship occupies an important place.
Entrepreneurship, or entrepreneurial activity, is understood as the initiative independent activity of citizens and their associations, carried out at their own risk and under their property responsibility, aimed at making a profit.
The most important feature of entrepreneurship is the autonomy and independence of economic entities. Their behavior is based on internal motives. Each person, becoming an entrepreneur, independently decides all the issues of the activity of his enterprise based on economic benefits and market conditions.
In close unity with independence is the principle of personal economic interest and responsibility. Own benefit is the driving factor of entrepreneurial activity, but the economic entity, pursuing its own interests, works for the public.
With independence, the entrepreneur takes personal responsibility for the results of his activities. Interest combined with responsibility makes the entrepreneur work hard.
Entrepreneurship is unthinkable without innovation, creative search. Only those who provide high quality and constantly update products can work effectively. The ability to make non-standard decisions, a creative approach to assessing the situation has always been highly valued in the business world. Looking for a client, money, currency, materials, transport, premises, contracts, connections, the right people, documents, workarounds is the inevitable lot of an entrepreneur. Therefore, he is always in a hurry and he never has enough time, he rarely distinguishes between working days and weekends, he gets up early and goes to bed late, tries to do several things at the same time. A calm, quiet measured life is not associated with the appearance of an entrepreneur.
A hallmark of entrepreneurial economic relations is an economic risk. Risk always accompanies business. Risk forms a special way of thinking and behavior, the psychology of an entrepreneur. The conditions of existence require from him high efficiency and dynamism, the spirit of competition.
To be entrepreneurial, an enterprise must have special properties. The entrepreneur is characterized by the fact that he is trying to create something new and different from the existing one, changes and transforms value attitudes.
Entrepreneurial activity is a set of consecutive or parallel transactions, each of which is limited to a relatively short, clearly defined time interval. The deal is the basic brick from which the entrepreneurial edifice is built.
The definition of entrepreneurship will look incomplete if you do not outline the image of the main character - the entrepreneur himself.
An entrepreneur, or a business entity, according to the adopted legislation, can be a citizen of the country recognized as capable in statutory order (not limited in capacity). Citizens of foreign states and stateless persons can also act as entrepreneurs, within the powers established by law.
Along with individual and private, collective entrepreneurship is allowed. The role of collective entrepreneurs (partners) is played by associations of citizens using both their own and legally acquired property.
2. Joint venture
2.1 Features of joint venture
Joint venture is a common entrepreneurial activity several partners, including partners from different countries.
Joint entrepreneurship is carried out on the basis of property belonging to them on the basis of common ownership, as well as by virtue of another right that allows joint use and (or) disposal of property.
The creation of a new operating enterprise (firm) for the implementation of certain production activities is the main hallmark a joint venture, viewed as a partnership in which each partner actively participates in the decision-making process of this enterprise.
Joint ventures are based on joint efforts, financial resources, material resources and participation in profit, risk, etc.
A common feature of specific forms of joint venture is the need to coordinate the economic interests of all participants and ensure the movement of goods (services) from producers to consumers.
Joint venture can be carried out in the following forms:
Joint individual entrepreneurship;
Consortium;
Joint-Stock Company;
Joint (Russian-foreign) enterprises, etc.
2.2 Joint sole proprietorship
Sole proprietorship can be either personal or joint.
Joint entrepreneurship can be carried out in the following forms (Article 5 of the Law of the Republic of Kazakhstan "On Individual Entrepreneurship"):
1) entrepreneurship of the spouses, carried out on the basis of the common joint property of the spouses;
2) family business carried out on the basis of common joint ownership of a peasant (farm) economy or common joint ownership of a privatized dwelling;
3) a simple partnership in which entrepreneurial activity is carried out on the basis of common shared ownership.
In case of entrepreneurship of spouses, certificate of registration individual entrepreneur receives one of the spouses, and the second must express his consent in writing.
In case of entrepreneurship on the basis of a peasant (farm) economy, a certificate of registration is issued in the name of the head of the economy.
Entrepreneurship based on common joint ownership of a privatized dwelling is a rather exotic type and I do not know in practice the case of its registration, although the law in this case provides for the conduct of business by one of the owners with the notarial consent of the others.
A simple partnership is an association of several persons on the basis of a joint activity agreement in order to act together to generate income or achieve another goal.
The parties must conclude an agreement on joint activities, stipulating in it the amount of monetary or property contributions, the procedure for distributing income and covering losses, participation in the activities of the partnership. Participants of a simple partnership have the right to conduct business jointly or entrust it to one of the participants on the basis of a power of attorney.
2.3 Consortium
A consortium is an organizational form of a temporary association of independent enterprises and organizations in order to coordinate their business activities. The word "consortium" literally translates from Latin as "participation". The objectives of the consortium are varied.
A consortium may be formed to carry out a large capital-intensive project or to co-invest in a loan. IN international trade consortiums are created to jointly fight for orders.
Within the consortium, the roles are distributed in such a way that each participant works in the field of activity where he has reached the highest technical level at the lowest production costs.
Consortium members retain their economic independence and may take part in the activities of other consortiums, associations, joint ventures.
The consortium uses and disposes of the property allocated to it by the founders, the funds allocated for the implementation of the relevant target program or from other sources.
The organization of the consortium is formalized by agreement. The actions of all members of the consortium are coordinated by the leader of the consortia, who received deductions from other members for this.
The leader represents the interests of the consortium, but acts within the limits of authority received from other members.
Each member of the consortium prepares proposals for its share of supplies, from which the general proposal is then completed. The consortium is jointly and severally liable to the customer.
2.4 Joint stock company
Joint Stock Company (JSC) -- one of the varieties of economic companies. A joint stock company is recognized commercial organization, the authorized capital of which is divided into a certain number of shares, certifying the obligations of the company's participants (shareholders) in relation to the company.
Since the concept of “joint venture” is interpreted quite broadly in modern practice of world management, combining both agreements between firms that include requirements for participation in the share capital of a joint venture, and agreements that do not include such requirements, the following concepts were introduced: ; contract (contractual) joint venture.
A joint stock joint venture is created by two or more participants in the form of a joint stock company, in which each partner owns a certain share of the share capital.
A contractual joint venture does not involve the creation new company for joint activities. Within its framework, all relations between the parties-participants are regulated by contracts.
IN modern Russia a joint-stock company is the most common organizational and legal form for organizations of large and medium-sized businesses, and large-scale enterprises often exist in the form of open joint-stock companies, medium-sized enterprises in the form of closed joint-stock companies. The main characteristics of modern Russian joint-stock companies are: the division of capital into shares; limited liability.
The activities of the joint-stock company in Russian Federation regulated by the Federal Law "On Joint Stock Companies".
When considering joint ventures, it is important to consider the position of potential partners. For example, a firm that seeks a source of funding is basically a small business. It enters into partnership with a large firm that has great financial and operational capabilities. Operational capacity for a small partner looking to expand their operations is sometimes more important than money.
A large partner firm, participating in a joint venture, is interested not so much in money as in a particular product produced by a partner, in a market segment, etc. Therefore, it invests its capital not in an ordinary block of shares, but in a joint venture.
So, a joint venture (JV) is such an enterprise, the authorized capital of which is formed on the basis of making share contributions by two or more founders, one of which is a foreign individual or, most often, a legal entity.
joint venture consortium
2.5 Features of joint ventures (JV) in Russia
A characteristic feature of the development of the Russian economy in the current conditions is the increasing role of foreign economic relations, which contribute to the development of advanced foreign experience, attraction of foreign capital, scientific and technical potential and allow to increase the efficiency of production by deepening the international division of labor. One of the most common forms of solving these problems is the creation of collective formations in which national and foreign organizations (firms) participate. In particular, broad prospects in relations between entrepreneurs in Russia and other countries have opened up in connection with the creation of joint ventures.
The basis of joint entrepreneurship is international cooperation, which is an important part of international economic cooperation. International cooperation is one of the tools of a market economy, which plays an important role in the process of creating normal conditions for the existence and development of entrepreneurship. International cooperation helps to achieve a socially useful result in production, scientific research, marketing, etc., with labor costs less than those necessary to achieve the same result when the participants act separately.
European economic commission(ECE) UN, the following main features of joint venture as a form of business are distinguished:
The presence of an agreement between the participants on the common long-term goals of entrepreneurial activity;
Pooling by participants to achieve these long-term goals of assets in the form Money, fixed assets, management experience, rights to intellectual property and other means;
Consideration and evaluation of the pooled assets as capital investments of the participants;
Creation of independent governing bodies, whose activities are aimed exclusively at the implementation of these joint goals;
The participation of the parties in the profits from the achievement of agreed goals and the sharing of the risks associated with this, determined by the percentage of participation of each partner in joint investments.
Joint entrepreneurship also involves the creation of mixed enterprises. Mixed enterprises include enterprises, the authorized capital of which is formed by two or more legal entities one country.
So, having made a decision to form a joint venture, the entrepreneur develops an action plan. This plan provides for:
Determining the profile of the future joint venture;
Search for a partner ready to cooperate in the creation of a joint venture;
Signing a protocol of intent;
Preparing Options possible ways receipt by the foreign partner of his share of the profits of the joint venture;
Preliminary formation of a share contributed during the establishment of a joint venture;
Obtaining permission to act as a founder of a joint venture (if required), appointing a director or a person responsible for preparing for the establishment of a joint venture;
Preparation of drafts of all documents required for the establishment and registration of a joint venture;
Signing an agreement on the establishment of a joint venture;
State registration of the joint venture;
Implementation of agreements on the creation of a joint venture in practice.
A protocol of intent is a document signed by the parties on the direction and content of future cooperation, which has no legal force and only indicates the desire of the parties to continue contacts in the future. Failure to comply with the terms of the protocol does not cause any legal consequences.
In Western countries, the term "common ownership" is often used to refer to a joint venture. In this case, it is possible to purchase a share in an existing enterprise. Such enterprises are created on the basis of direct investment, i.e. long term investment capital in any enterprise, business. Investor, i.e. the contributor can be both an individual and a legal entity or even the state.
On the territory of Russia, joint ventures with the participation of Russian and foreign partners are created as manufacturing enterprises, trading firms, innovative and other service organizations that carry out economic activities on their own behalf, on the basis of common property and in the interests of the participants in the joint venture.
The activity of a joint venture in Russia is regulated by the Law of the Russian Federation “On Foreign Investments”. Officially, such an enterprise is registered in Russia (on the basis of the Law "On Enterprises and Entrepreneurial Activities") as an enterprise (in one of the organizational- legal forms) indicating that such an enterprise is created with the participation of foreign capital.
The participants of the joint venture are legal entities and carry out their activities on the basis of an agreement in accordance with the legislation of the Russian Federation, and the charter of the joint venture. The agreement defines the mutual rights and obligations of the partners, as well as their relations with the outside world. Contracts can take a variety of forms, ranging from contract or lease agreements to an agreement on the creation of a joint venture with the partners' common property, which predetermines joint ownership of the product being created. Especially important from the point of view of the success of joint ventures are the consideration and coincidence of the national interests of the parties entering into joint venture relations.
Joint ventures in Russia can be based on both contractual relations without the transfer of foreign capital (franchising, leasing), and on foreign direct investment. In this case we are talking on the creation of so-called enterprises with foreign investment.
On the territory of the Russian Federation can be created and operate:
Enterprises with equity participation of foreign investments (joint ventures) and their branches (representative offices);
Enterprises wholly owned by foreign investors (enterprises with 100% foreign capital) and their branches (representative offices);
Branches (representative offices) of foreign legal entities. Enterprises with foreign investment can be classified according to several criteria (Table 1).
When choosing the type of enterprise and its organizational and legal form, it should be borne in mind that there is a fundamental difference in the order legal regulation and the benefits provided for enterprises of various organizational and legal forms with the participation of foreign investments or without them - is not provided for by the current legislation.
When creating an enterprise with 100% foreign investment, a foreign entrepreneur can choose one of three forms of registration:
Representation - without the rights of a legal entity and without the right of independent economic activity;
Branch - with the right of independent economic activity, but without the right of a legal entity;
Joint stock company of a closed or open type with all the rights of a legal entity.
The first two forms - a representative office and a branch - are administratively subordinate to the head foreign firm that founded them, which somewhat narrows their activities, limits the possibilities of some Russian departmental rules and instructions.
A joint-stock company is the third form of investing foreign capital in Russia, although it is established by a parent company, it has all the legal possibilities for independent activity.
Enterprises with foreign investments may unite into unions, associations, concerns, intersectoral, regional and other associations on terms that do not contradict the antimonopoly legislation in force on the territory of the Russian Federation, and in the manner prescribed by the legislative acts of the Russian Federation.
A joint venture must have a Charter approved by its participants.
The charter defines the subject and goals of the enterprise, its location, composition of participants, the procedure for the formation of the authorized capital (including foreign currency), the structure, composition and competence of the management bodies of the enterprise, the procedure for making decisions and the range of issues, the solution of which requires unanimity, as well as the procedure for liquidating the enterprise.
The charter may also include other provisions that do not contradict Russian law and relate to the peculiarities of the joint venture.
After registering a joint venture, partners contribute their shares within a certain period of time authorized capital. It happens that a foreign investor slows down the fulfillment of this obligation, while the enterprise is already working. If he does not deposit money within a year, then by Russian law on Foreign Investments, the JV is considered invalid.
If the joint venture operates without the full contribution of the foreign partner to the authorized capital, then the board of the enterprise decides to liquidate it or to transfer the share to another partner or sell it.
Conclusion
So, a joint venture is a common business activity of several partners, including partners from different countries.
The most typical are the following forms of joint ventures: joint individual entrepreneurship; consortium; Joint-Stock Company; joint (Russian-foreign) enterprises, etc.
Joint venture as a type foreign economic activity represents a wide range of various forms of production and economic activity of partners of two or more countries, the content of which is cooperation in the spheres of production and circulation, in scientific, technical, investment and service areas.
A common feature of specific forms of joint venture is the need to harmonize the economic interests of all participants in such relationships.
The basis of this activity is the pooling of efforts, financial and material resources, a long-term guarantee of the sale of goods, the systematic renewal of products, scientific, industrial and trade cooperation, profit sharing, the distribution of technical, investment and commercial risks.
The principal features of cooperation between joint venture participants are:
combining the property of partners and the formation on this basis of the initial volume of fixed assets and working capital joint venture;
joint management of the processes of development of the enterprise, production and sale of its products and services;
joint bearing of production and commercial risks of the enterprise;
division of part of the profits of the joint venture between partners.
Bibliography
1. Bagiev G.L. Organization of entrepreneurial activity. Tutorial/ G.L. Bagiev, A.N. Asaul; Under the general editorship. prof. G.L. Bagiev. - St. Petersburg: Publishing house of St. Petersburg State University of Economics, 2001. - 231p.
2. Eremin V.V. Organization of entrepreneurial activity (Basics of business). Allowance / V.V. Eremin, T.Z. Artyukhova, V.B. Kosov, N.S. Matsievsky. - Tomsk: TPU, 2005. - 125s.
3. Organization of entrepreneurial activity / Under the general editorship of Professor A.S. Pelikh. - M.: Publishing Center "Mart", 2003. - 374 p.
4. Semeko G.V. Joint Entrepreneurship: Textbook / G.V. Semeko. - M.: IKD "Zertsalo-M", 2004. - 120s.
5. Shevchenko I.K. Organization of entrepreneurial activity. Textbook / I.K. Shevchenko. - Taganrog: Publishing House of TRTU, 2004. - 92p.
6. Yurkova T.I. Enterprise economy. Textbook / T.I. Yurkova, S.V. Yurkov. - Krasnoyarsk: Krasnoyarsk State Academy of Nonferrous Metals and Gold, 2006. - 119p.
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(joint venturing)
Joint venture activity - association with foreign companies for the purpose of producing or selling certain goods and services. Joint venture activity differs from export in that the company combines with some partner to sell goods abroad. It differs from direct investment in that the association is created in another country. There are the following types of joint venture activities:
· Licensing(licensing) - an easy way for a manufacturer to enter the international market.
The company enters into an agreement with licensee in the foreign market. For example, Coca-Cola operates on the international market by selling licenses foreign manufacturers soft drinks and supplying them with the syrup necessary for the production of the finished product.
The subject of international licensing agreements are usually:
patents for inventions;
copywriting of books, films, television productions, computer programs;
Trademarks, i.e. words and symbols that identify certain goods and services;
know-how, including manufacturing processes, quality management procedures, etc.
Thus, the company gets access to the market with minimal risk, and the licensee gets at its disposal ready technology production, well-known product or name.
In addition, the license agreement may provide commercial information, technical and marketing training, the right to use the research departments of the licensor, supply necessary equipment etc. Terms of payment under license agreements may be different. For example, if the country in which the licensee is located is characterized by high political risk, then prepayment is usually used. If the political environment is stable, the payment can be made in the form of a royalty, calculated as a certain percentage of the sales volume of the licensee's products.
Unlike exports, a license agreement involves control over the production and distribution of products by the licensee. The licensor avoids investing in the creation of a production and marketing system, has the opportunity to penetrate markets where export operations are difficult or impossible.
Disadvantages of Licensing: the firm has less control over the licensee than its own own funds production; if the licensee is not successful, the firm loses the corresponding profits, and when the contract ends, it may turn out that the firm has created a competitor with its own hands.
· Franchising(franchising) - a special type of license agreement under which the franchisee operates using the name of the franchisor.
The franchisor provides not only a trademark and know-how, but also provides financial support, assistance in management, and carries out joint advertising activities. The franchisee enterprise is considered by the public as one of the divisions of a single big company. A franchise agreement payment may include a down payment and royalties.
Franchise agreements are most common in the service industry. It is believed that the country in which the franchisee is located receives significant benefits, since under these agreements the franchisor, among other things, transfers skills and methods of work. The franchisor, in turn, gains access to the market and retains significant control over the established enterprise at a minimum cost.
· Contract manufacturing(contract manufacturing) - a joint venture in which a company enters into a contract for the production of products with manufacturers in a foreign market. Many Western firms have used this model to enter the markets of Taiwan and South Korea.
Flaws: loss of control over the production process and loss of potential income from production.
Advantages: the possibility of a quick start with less risk, as well as the possibility of subsequently establishing a partnership with a local manufacturer.
· Turnkey contracts(turn key contracts)
The company that has entered into such an agreement undertakes to create a ready-to-use production or infrastructure facility, i.e. develop the design of the object, provide necessary technology, purchase equipment, build premises, install and prepare equipment for operation. Payment under the agreement can be made by the products of the established enterprise.
Many developing countries are using turnkey projects to set up oil refineries. in Indonesia in the 1980s. firms such as British Petroleum, Foster Wheeler (USA), Mitsui and Mitsubishi, built eight refineries for the production of petroleum products.
· Contract Management(management contracting) - a joint venture in which a local company provides foreign company"know-how" in management; the foreign company, in turn, provides capital. Thus, the local company does not export products, but management services.
A company that assumes responsibility for managing the activities of an enterprise that is the subject of a management contract may following features: general management, financial management, personnel management, production or marketing. The authority of the company is limited to the day-to-day activities of the enterprise and does not extend to investment decisions and strategy setting.
Management contracts are usually complemented by other forms of international activity: license agreements, joint ventures or turnkey contracts. The disadvantage of this form is that it does not create a long-term presence in the foreign market. Management contracts are most common in industries such as hotel business, transport, Agriculture, mining. For example, the Hilton company uses a similar agreement in the organization of hotel management around the world.
Advantages: low risk, possibility of income from the very beginning.
Flaws: does not allow the company to establish its own management.
· Contract manufacturing(contract manufacturing)
According to the agreement on the production of products, one company (principal) gives an order for the production of products to another company (agent), while specifying the characteristics of the products. As a rule, the sale of manufactured products is carried out by the principal. It may also be part of the agreement to provide the agent with the know-how and necessary equipment to ensure the quality of the work. Contract manufacturing is widespread in industries such as clothing and electronics.
· joint ownership(joint ownership) - a joint venture in which a company combines with investors in a foreign market in order to create a local enterprise; the company is a co-owner of this enterprise and takes part in its management.
A joint venture involves the joint ownership of assets, the bearing of risks and the disposal of the profits of the newly formed firm by two or more parties. The distribution of ownership of the enterprise may be determined by the size of the financial contribution of the participants, as well as the provided production and management technology, access to markets for products. A joint venture as a form of international activity allows a company to obtain the following advantages:
access to "closed" markets;
· development of technology and strengthening of the market position in the conditions of lack of resources;
· Gaining access to distribution channels, technologies, suppliers of raw materials;
Implementation of a global strategy in the context of a reduction life cycles products, the growing importance of low costs, an increase in the number of competitors.
The creation of a joint venture involves the implementation of several stages:
1. Definition of the purpose of joint activity.
2. Choosing a partner abroad.
3. Preparing background information and evaluating options.
4. Feasibility study.
5. Preparation of constituent documents.
There is a special type of joint venture - a contractual joint venture, in which there is no combination of capital with the formation of a separate company. The parties unite in a partnership for the implementation of a project, jointly investing, bearing risks and managing the profits.
Flaws: partners may have disagreements about investments, marketing or some other issues. In order to profit from the partnership, the parties must clarify their expectations and goals, make efforts to achieve the best results for all parties.
Direct investment
(direct investment)
Direct investment is a way to foreign market by setting up assembly or manufacturing plants abroad.
· Own divisions(wholly owned subsidiaries)
The creation of a foreign division, which is the property of the company, is explained by the desire of its managers to gain direct control over the production process for marketing reasons or to protect technology. There are 3 types of foreign direct investment leading to the creation of their own division or joint venture.
1. Investments related to marketing. With such investments, the company seeks to replace the export of products to a certain country or part of it with the production of goods within this country.
2. Investments associated with costs. The company is trying to exploit the low cost of labor or other resources in a particular country.
3. Investments related to access to minerals. Many companies obtain the right to extract minerals in the territory of another state, subject to the construction of a mining enterprise.
Own divisions can be created by investing in the construction of a new plant, through an acquisition or merger.
· Strategic alliances(strategic alliances)
Entry into alliances (agreements) is typical of both global and smaller companies that are trying to strengthen their competitive position. Strategic alliances are formed to share the risks associated with innovation, create new opportunities for development, use each other's skills and knowledge.
Benefits:
1. the company can provide a lower cost of production due to cheaper work force or raw materials, foreign government investment incentives, and freight savings.
2. The firm can improve its image in the respective country by creating new jobs.
3. The firm, by developing deeper relationships with local government, consumers, local suppliers and distributors, can better adapt its products to local market conditions.
4. The firm retains full control over investments and can therefore develop a manufacturing and marketing strategy that will serve its long-term international goals.
Flaws:
1. high level risk associated with the devaluation of the local currency, market instability, change of governments.
Using the opportunities of international marketing requires large investments from companies. Many companies underestimate the cost of doing business overseas. Moreover, their expectations of quick returns on investments are not justified, which is the reason for the rapid withdrawal of companies from foreign markets that have not taken a stable position on it.
Target customers in foreign markets need to be sure that these investments will be sustainable. Buyers of capital goods and expensive durable goods feel more secure and more trademark, if it entered the market to stay on it, and provides reliable service and an after-sales guarantee.
3. Merchandise channels in international trade
international company should consider the problem of marketing products to end consumers from the point of view of all distribution channels. There are 3 main links between seller And end customer.
first link, seller's headquarters, controls distribution channels and is part of the channel itself.
second link, interstate channels, ensures the delivery of goods to the borders of foreign countries.
third link, domestic channels, ensure the delivery of goods from the border crossing points of a foreign state to end consumers. Need to be given more attention its activities abroad. Need to invest in getting information about characteristic features each sales channel of the foreign market and choose the most effective method penetration into a complex or a fortified distribution system.
The general structure of the distribution channel in international marketing
In the practice of modern international business, various, including quite flexible, forms of international cooperation have been developed, which include:
co-production - the manufacture of a complex product or its component by one of the foreign partners;
· contract management - transfer of know-how in the field of management by one of the partners to another;
· franchising - the issuance of a license for a certain activity with the provision of additional managerial, marketing and technological support;
· strategic alliance - a formal or informal alliance created to pool resources to solve the problems of reorganization, increase market efficiency, etc., or achieve "scale effects", or for other purposes;
· joint venture - one of the common forms of strategic alliance, associated with the creation of a new company by legally and economically independent enterprises;
· multinational company - the most "rigid" form of international cooperation, based on the mechanism of equity participation and/or other methods of corporate control.
A joint venture is an international firm created by two or more national enterprises with the aim of maximizing the potential of each of the parties to maximize the useful economic effect their activities. It is a type of enterprise with foreign investment and, in accordance with the current Russian legislation, is defined as an enterprise with the participation of Russian and foreign investors. An important sign of a joint venture should be the presence among its founders (participants), along with the national one, of at least one foreign investor.
The concept of an international joint venture is used to refer to enterprises (firms) that are jointly owned by two or more owners (legal entities and individuals), based on the mixed ownership of different countries.
Important incentives for the creation of joint ventures are the difficulties of independent penetration into foreign markets, insufficient knowledge of the foreign economic environment and the need to combine the efforts of partners in the face of growing uncertainty in economic development, and sometimes national legislation that limits 100% foreign ownership in certain industries and areas. Of particular importance is the exchange of organizational, managerial and technological experience, the mutual use of the sales and service infrastructure of partners.
The goals of a joint venture may be different. The main ones and the most common ones are:
1. obtaining modern foreign technologies (unlike traditional licensing in joint ventures, the seller of licenses becomes a co-owner of the enterprise using them, who is extremely interested in obtaining high profits), overcoming barriers of protectionism in international technology transfer;
2. increasing the competitiveness of the product in the market; expansion of product exports, access to foreign market due to:
Studying the specific needs of foreign markets, conducting a set of marketing activities;
Organization of production in accordance with the quality parameters characteristic of the world market or in accordance with the standards adopted in the countries where it is planned to sell it;
Entering the markets of countries that apply strong trade protectionism and restrictions on foreign investment without the participation of local enterprises and firms.
3. attracting additional financial and material resources, the possibility of using the resources available to one of the founders of the joint venture at prices significantly lower than the average world market prices;
4. reduction of production costs based on the use of transfer (intracompany) pricing, cost savings for product sales;
5. improvement of logistics by obtaining scarce material resources from a foreign partner, semi-finished products not manufactured by them, components and parts (“screwdriver” production).
The emergence and spread of joint ventures as one of the forms of coordinated activities of two or more partners aimed at achieving common purpose contributed to the processes of internationalization of the economy of different countries, increasing the export of capital. A certain influence on the development of joint ventures is exerted by integration trends in the field of specialization and cooperation in production. Joint ventures as one of the promising organizational forms of management became widespread in the 1970s and 80s in the countries Western Europe and Asia, and then - in the countries of Central and Eastern Europe, as well as the CIS.
Joint ventures have become a means of attracting advanced foreign technology and modern management experience. Thanks to them, the export of capital is facilitated, including in its productive form, investment projects are being implemented, the implementation of which is beyond the power of one company. In addition, markets in new regions are easier to develop with the help of local partners, especially since enterprises with foreign and domestic equity participation often enjoy tax incentives. Being international in form, joint ventures have acquired a special status in the country of official legal registration. In all countries, the activities of joint ventures are regulated by special legislation, including tax, economic, etc.
Huge capacity Russian market, diverse natural resources, skilled labor force are attractive factors for foreign investment in the Russian economy. In accordance with the current Russian legislation, joint ventures may be established in the form of business partnerships and societies.
In its own way organizational structure joint ventures can be subdivided into closed or open joint-stock companies, limited liability companies, etc., while the share of each of the parties in the authorized capital of the joint venture is strictly stipulated in the constituent documents. Distribution of profit occurs, as a rule, in proportion to the share of participation in the authorized capital of the company.
Distinctive feature the management structure of a joint venture is the equality of the parties in decision-making processes, control over the activities of the company, strategic planning. Operational and tactical management is carried out by the supreme management body of the company, appointed by the co-owners of the joint venture. The parity principles of company management allow each of the parties to derive the greatest benefit from joint activities and contribute to the development of business cooperation.
The management structure of a joint venture fits into the framework of traditional company management schemes (functional, product, divisional, matrix, regional, etc.) and depends on the nature of the activity, the number of parties involved in the creation of the company, the degree of diversification of production and services provided.
Being a fairly flexible organizational form of management that allows using the experience, financial and other resources of companies from different countries, joint ventures become a kind of growth points for new forms of management. The use of resources from different countries allows minimizing costs and maximizing profits, thereby increasing the return on invested capital of partners.
The creation of joint ventures abroad requires the solution of many management problems, taking into account the peculiarities external environment, stimulating the workforce. It is necessary to take into account the significant differences in the cultural, commercial, economic and other spheres of the countries participating in the creation of a joint venture. Personnel composition parent companies usually evaluate labor productivity, remuneration levels, labor safety differently and invest different assessments in the concept of subordination. There may also be large differences in organizational cultures two parent companies, in the strategy of using human resources. Cultural differences influence the formation of a joint venture, as they are reflected in differences in approaches to goals, strategies, human resource policies, development opportunities and difficulties, organizational relationships, communication priorities.
Another common direction for entering the foreign market is to join efforts with the commercial enterprises of the partner country in order to create production and marketing capacities. Joint venture activity differs from export in that a partnership is formed, as a result of which certain production capacity. What distinguishes it from direct investment is that in the partner country an association is formed with some local organization. There are four types of joint ventures.
Licensing. This is one of the most simple ways involvement of the manufacturer in international marketing. The licensor enters into an agreement with a licensee in a foreign market offering rights to use production process, trademark, patent, trade secret, or some other value in exchange for a fee or license fee. The licensor gets a market entry with minimal risk, and the licensee does not have to start from scratch, because he immediately gains production experience, a well-known product or name. Through licensing operations, Gerber brought its products to the Japanese market for baby food. The Coca-Cola Company operates on international marketing, granting licenses to various enterprises in different parts of the world, or, more precisely, granting them trading privileges, since the company itself presents the concentrate necessary for the production of the drink.
A potential disadvantage of licensing is that it gives the firm less control over the licensee than it does over its newly created business. In addition, if the licensee does well, the profits will go to him, and at the end of the contract, the firm may find that it has created a competitor.
Contract production. Another variant of activity is the conclusion of a contract with local manufacturers for the production of goods.
The disadvantage of contract manufacturing is the firm's less control over the production process and the loss of potential profits associated with this production. At the same time, it enables the firm to expand faster, with less risk, and with the prospect of partnering with or buying a local manufacturer.
Contract management. In this case, the firm provides the foreign partner with "know-how" in the field of management, and he provides the necessary capital. Thus, the firm does not export a product, but rather management services. This method is used to organize the work of hotels in different parts of the world by the Hilton company.
Contract management is a way to enter the foreign market with minimal risk and income from the very beginning of activity. However, it is not advisable to resort to it if the company has a limited staff of qualified managers who can be used to a greater advantage for itself, or in the case when the independent implementation of the entire enterprise will bring much more profit. In addition, contract management for some time deprives the firm of the opportunity to develop its own enterprise.
Joint ownership enterprises. A co-ownership is a combination of efforts of foreign and local investors of capital with the aim of creating a local commercial enterprise which they own and operate jointly. An overseas investor can buy a stake in a local business, a local firm can buy a stake in a foreign company's existing local business, or the two parties can work together to create an entirely new business.
A joint venture may be necessary or desirable for economic or political reasons. The firm may lack the financial, physical, or managerial resources to carry out the project alone. Or perhaps joint ownership is a condition by which a foreign government stipulates admission to the market of its own country.
The practice of joint ownership has certain disadvantages. Partners may disagree on capital investment, marketing, and other operating principles. While many American firms are eager to use their earnings to reinvest in expanding their business, local firms often choose to retire these earnings. While US firms play a large role in marketing, local investors can often rely solely on marketing. Moreover, co-ownership can make it difficult for a multinational company to enforce specific production and marketing policies on a global scale.
Direct investment. The most complete firm of involvement in activities in the foreign market is the investment of capital in the creation of its own assembly or production enterprises abroad. As the firm accumulates experience in export work and with a sufficiently large foreign market, manufacturing enterprises abroad promise it clear benefits. First, the firm can save money through cheaper labor or cheaper raw materials, through incentives given by foreign governments to foreign investors, by reducing transport costs etc. Secondly, by creating jobs, the firm provides itself with a more favorable image in the partner country. Third, the firm develops deeper relationships with government agencies, customers, suppliers, and distributors in the host country, enabling it to better tailor its products to the local marketing environment. Fourth, the firm retains full control over its capital investments and, therefore, can develop production and marketing policies that will meet its long-term objectives on an international scale.
Joint business activity is one of the most important forms of regulation of intercompany market relations. It enables firms operating internationally to adapt to changing market conditions and requirements. Joint venture activities usually implemented in the form of joint ventures, cooperation in the field of research, exchange of licenses for new products and technologies. The main emphasis is on the creation of joint ventures.
The creation of joint ventures (JV) is implemented at the level of direct interaction of cooperating partners, which are legal entities under the laws of the countries they represent. Cooperation between joint venture participants has its own characteristics:
connection of property and formation on its basis initial capital SP;
joint management of the processes of enterprise development, production and sale of products and services produced by it;
joint bearing of risks of the enterprise;
division of part of the profits of the joint venture between partners on the terms regulated by the regulations of the host country;
long-term cooperation;
complexity of interaction between partners in all key areas of activity;
association of the strongest individual elements.
JVs are created and operate on the territory of the host country on the terms and in the legal form determined by the legislation of that country. In international practice, there are various legal forms of joint ventures that determine the specifics of the organization of the created joint venture and the degree of responsibility of its participants for the obligations of the enterprise. The most common organizational and legal forms of a joint venture are joint-stock company, full liability company, limited liability company. In addition, joint ventures may vary depending on the ratio of the shares of local and foreign partners in the authorized capital of the enterprise.
The pace and scale of the formation of joint ventures in different countries depend on the "investment climate", which is a set of factors that contribute to the attractiveness of a given host country for foreign investment. Key factors include the nature of foreign investment legislation; availability of reserves of natural raw materials, the possibility of obtaining them for the activities of the joint venture; the availability of skilled labor; the degree of development of the production infrastructure; local market capacity; availability of solvent demand for goods and services; convertibility of the local currency.
Joint ventures are widely used in the construction industry industrial enterprises; to establish the production of new types of products; in the development of deposits of raw materials, as well as in new fast-growing industries (for example, in chemical industry, oil refining, petrochemistry).
At present, the joint venture activity of international industrial firms is one of the typical forms of transnationalization of production and capital and is aimed at facilitating the penetration largest firms on the markets of other countries and in strengthening the positions of these firms on them.
