Matching strategy with ownership structure in Japanese joint ventures

Abstract

Executive Overview Although many international joint ventures (JVs) are formed in the traditional way between foreign and local firms, nontraditional forms are increasingly being utilized. We identify four distinct types of JV ownership structure, based on partner nationality and affiliation. Senior executives of two large Japanese firms with joint ventures in Asia suggested three distinct strategies corresponding to the choice of JV ownership structure. These involve exploiting the competitive advantage specific to a parent firm, or to a pre-existing relationships and complementing local partners' competitive advantage. We consider several key issues regarding JV partner selection and the development of a sustainable relationship between JV partners that are relevant to American executives and those from other countries.