Oli Paradigm
Samila Amany
ECLECTIC PARADIGM
(OLI PARADIGM)
MARKET IMPERFECTION/ INTERNALIZATION
LOCATION SPECIFIC ADVANTAGES
STRATEGIC BEHAVIOR
VERNON’S LIFE CYCLE MODEL
Global JV/ Alliances
A global JV will be successful if the entry mode is eclectic paradigm when product advantage presents:
Product or company specific advantages must exist in order for a successful Global JV. Study shows that a Joint Venture is often seen as a viable business in imperfect market. Studies show a failure rate of 30-61%, and that 60% failed to start or faded away within 5 years (Osborn, 2003). And that is when the allocation of goods and services by a market is not efficient.
Location specific advantages are when the company derives greater benefit through a foreign establishment such as Global JV. The use of joint ventures stems from theories on how strategic behavior influences competitive positioning of the firm. According to Alan Rugman the motivations to joint venture for strategic reasons are numerous. Vernon suggests a Joint Venture should happen after the initial stages of a product life cycle. If a global Joint Venture happens in initial stages the chances of unsuccessful transfer may occur.
Global Car Manufacturing
An example to this theory would be Saab’s car company acquired by General Motors, which many of its loyal customer wrung their collective hands over the perceived loss of Swedish ingenuity. This theory provides a framework to manufacturer industries as to when determining if it is beneficial to pursue.
By By Brian Douglas, Special to AsianWeek, May 30, 2003 http://news.asianweek.com/news/view_article.html?article_id=77c0a69dc719730116ced5853c661024 The market imperfection in global car manufacturing falls in majority times specially in Asia due to cultural differences, as was the case with the alliance between Renault, a French car company, and Nissan I have a very interesting example. This one is my own experience and knowledge. For
ECLECTIC PARADIGM
(OLI PARADIGM)
MARKET IMPERFECTION/ INTERNALIZATION
LOCATION SPECIFIC ADVANTAGES
STRATEGIC BEHAVIOR
VERNON’S LIFE CYCLE MODEL
Global JV/ Alliances
A global JV will be successful if the entry mode is eclectic paradigm when product advantage presents:
Product or company specific advantages must exist in order for a successful Global JV. Study shows that a Joint Venture is often seen as a viable business in imperfect market. Studies show a failure rate of 30-61%, and that 60% failed to start or faded away within 5 years (Osborn, 2003). And that is when the allocation of goods and services by a market is not efficient.
Location specific advantages are when the company derives greater benefit through a foreign establishment such as Global JV. The use of joint ventures stems from theories on how strategic behavior influences competitive positioning of the firm. According to Alan Rugman the motivations to joint venture for strategic reasons are numerous. Vernon suggests a Joint Venture should happen after the initial stages of a product life cycle. If a global Joint Venture happens in initial stages the chances of unsuccessful transfer may occur.
Global Car Manufacturing
An example to this theory would be Saab’s car company acquired by General Motors, which many of its loyal customer wrung their collective hands over the perceived loss of Swedish ingenuity. This theory provides a framework to manufacturer industries as to when determining if it is beneficial to pursue.
By By Brian Douglas, Special to AsianWeek, May 30, 2003 http://news.asianweek.com/news/view_article.html?article_id=77c0a69dc719730116ced5853c661024 The market imperfection in global car manufacturing falls in majority times specially in Asia due to cultural differences, as was the case with the alliance between Renault, a French car company, and Nissan I have a very interesting example. This one is my own experience and knowledge. For