International Management Main Textbook PDF Chapter
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Main Textbook.pdf chapter 9 starting page 305 Luthans and Doh (2012) discuss entry strategies and ownership structures. As an international manager, which entry strategy would you use for an energy organization? For context, select one of the BRIC countries. Briefly explain why. Your response should be at least 200 words in length. All sources used must be referenced; paraphrased and quoted material must have accompanying citations.
Paper For Above instruction
In considering entry strategies for an energy organization into a BRIC country, I would recommend establishing a joint venture as the optimal approach. Among the BRIC nations—Brazil, Russia, India, and China—India presents a particularly compelling case for this strategy due to its growing energy needs, government policies favoring foreign investment, and the complexity of its market environment.
A joint venture involves partnering with a local firm, which offers several strategic advantages. First, it facilitates access to local market knowledge and established networks, easing regulatory hurdles and helping navigate the bureaucratic landscape typical of emerging markets like India (Luthans & Doh, 2012). Given India's regulatory environment, government incentives, and the necessity for local compliance, a local partnership ensures smoother integration and operational efficiency.
Furthermore, the energy sector often involves significant government regulation, infrastructure challenges, and cultural considerations, all of which are mitigated through collaboration with a local entity. This alliance enables knowledge transfer, risk sharing, and resource pooling—key factors for success in such capital-intensive and complex industries (Hill, 2014). Additionally, a joint venture signals commitment to the local economy and promotes goodwill, which can be crucial given India's emphasis on domestic content and sustainable growth policies.
Choosing a different entry mode, such as foreign direct investment (FDI) alone, might offer more control; however, it increases exposure to political and economic risks, especially in the evolving Indian political landscape. Exporting or licensing would limit the energy company's ability to influence local operations, potentially reducing profitability and strategic flexibility (Rugman & Verbeke, 2004).
In conclusion, a joint venture aligns well with entry into the Indian energy market because it balances risk mitigation, local engagement, and strategic growth. This approach fosters sustainable operations while fostering strong local partnerships, essential for long-term success in complex and dynamic markets like India.
References
Hill, C. W. L. (2014). International Business: Competing in the Global Market. McGraw-Hill Education.
Luthans, F., & Doh, J. P. (2012). International Management: Culture, Strategy, and Behavior. McGraw-Hill/Irwin.
Rugman, A. M., & Verbeke, A. (2004). A perspective on regional and global strategies of multinational enterprises. Journal of International Business Studies, 35(1), 3-18.