Many American companies enter china through joint ventures with local firms, but china is succeeding in the United States primarily with a strategy of buying companies outright. What are some factors that might account for this difference?

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Business

Elliott Stone

14 June, 10:31

Many American companies enter china through joint ventures with local firms, but china is succeeding in the United States primarily with a strategy of buying companies outright. What are some factors that might account for this difference?

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Chelsea Rubio · Answer 1

(1) The preference of the Chinese firms to expand through outright purchase which aides them to retain key positions in order to have a firm control on the business.

(2) Chinese companies are ready to take more risk than American companies

(3) Chinese companies are more interested in opportunities to provide growth and innovation.

Explanation:A Joint venture business is a business organisation owned by two or more persons or organisations who pull resources together in order to achieve a common goal.

The resources pulled together can be in the form of finance, expertise, infrastructures etc, a joint venture business is also another form of merger known commonly with profit making organisations.