Krohne's Entry into the Chinese Market
(8 pages of text)
Krohne Inc. of Germany separately established a joint venture, a wholly owned sales company and a manufacturer in China. Unfortunately, although the sales channels were different, the product lines of the joint venture and the wholly owned manufacturer overlapped. The two companies were therefore competing and unsure about which company rightfully represented the parent enterprise. In addition, the two investment parties were battling for control of the joint venture.
This case is suitable for MBA and executive courses in international business and corporate governance. The case presents the advantages and disadvantages of joint ventures and wholly owned companies. It offers students an opportunity to examine the Chinese context, effective entry modes into foreign markets, restructuring equity and facilitating company development in complex environments. Specifically, students will understand the joint venture and wholly owned company entry modes and their underlying principles and analyze entry mode changes according to the resource-based theory and the institutional theory.
China, Large, 2005
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