About joint venture

Question

When I was dealing with this case, I focused more on joint-venture and acquisition, is that a wrong direction? I am confused.

Answer 1

Hi there,

It's a fair question!

Fundamentally, any given case can go in many directions. However, you are bound to 1) The information provided and 2) The clues given.

Clue #1

"According to preliminary examinations, further growth potentials in the Asian core market are rather limited. Thus LubricantsCo would like to investigate options to internationalize in the passenger car business – also outside the premium segment which is given priority."

You are very clearly being asked here to find a good market. The priority is identifying a good market, not figuring out how to enter!

Clue #2

"Therefore your consulting firm was instructed to elaborate a market entry strategy for the European market."

Again, market entry strategy can encompase many things. Yes, this includes JV and Acquisition, but it's not at all limited to it!

For any market entry case, you need to first determine which market, and only once you've decided which market can you then focus on how. However, even within the how, you can't jump straight into JV/Acquisition. You need to consider the company's situation (capital, expertise, experience, etc.) and the market situation. Only then can you make a decision on the best approach.

Hope this helps!

Answer 2

Hello!

I would agree with you that is a fair question.

This is one of the things that need to be "oriented" by the person who is conducting the interview. How did you do it, by yourself, or with some other candidate in PrepL?

Best,

Clara