managing an international partnership

7/29/2019 Managing an International Partnership

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Managing an International partnership

US-T and ITA-Truck

Introduction

US-Truck and ITA-Truck are two family owned small enterprises oriented to

develop their current activities through the assessment of the possibilities

offered in the global context. Although these similarities, alongside other

common feature they have several differences that may undermine the

definition of the partnership they have started to evaluate.

History of ITA-truck

Family owned business founded by Alpha family in the year 1977. The production

and supply operates in the home country. Main product of production is to

produce Dump trucks. The company strength employee of the company is 30.The company invest heavy amount on R&D. In 2009 the companys estimated

turnover was 10 million Euros. ITA-trucks has been appreciated in the home

country, the firm also conducted few activities abroad. The companys export is

between 5%-10% due to international activities of the industrial sector.

History of US-T

Family owned business founded by Jeff Smith Sr. in the year 1986. The company

distributes, Install and repairs lubrication equipment as well as designing and

building customized lubrication trucks which supply in the home country with 15

states. The head quarter is located in concord, North Carolina. The companystrength employee of the company is 28. In 2007 the companys estimated

turnover was 8 million Euros. US-T has been appreciated in the home country.

Governance of Transaction

ITA-TRUCK AND US-T INTERNATIONAL PARTNERSHIP

Goods-US-T and ITA-Trucks product will results in good fit for the markets and

industries due to long term relationship.

Service- Resulted in better service.

Knowledge- technical know-how will be shared among the two companies

which will result in reducing the cost.

Complexity1) Uncertainty of first order and second order: There is an uncertainty

of production of the goods in the first and second batch.

2) Investing systems boundaries and potentials for surprises: Thecompanies should be ready to take surprises as in the any futurerisks.


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3) Need for stakeholder involvement for collecting and interpreting:Stake holder plays an important role as any gain/loss will affect thestakeholders.

4) Different frames: Both company has different frames of rules andregulation

5) Different concepts about route of risk handling: Both companieshave different concepts of handling of risks which might results inconflicts between two companies.

HIERARCHYAs the two companies will have similar type of hierarchy

1) CEO

2) STAKE HOLDER3) BOARD OF DIRECTORS

4) PRESIDENT

5) MANAGERS

TYPE OF OWNERSHIP

KEY POINTS ITA-TRUCK US-TGOVERNANCE FAMILY OWNERSHIP FAMILY OWNERSHIP

STRATEGY R&D INVESTMENT DIVERSIFICATION AND

GEOGRAPHICAL ETENSION

POSITIONING LEADING FIRM -

STANDARDIZATION

DESIGNED-TO-FIT

MULTIPLE MARKETS

EXPORTS FEW (5 TO 10%) -

BARRIERS SHIPPING COSTS NO OPPORTUNITIES

SOLUTIONS OUTSOURCE PRODUCTION

ESTABLISH PARTNERSHIP

EXPAND LOCALLY

WANTS PARTNERSHIP INSOURCING

PROPOSITION FOR ROLE DISTRIBUTION

ITA-TRUCK US-T

DESIGN US TRUCK CHASSIS IDENTIFY DISTRIBUTOR

FOR SALES

ADAPT US-T SUPPLY

CHAIN

DECIDE WHICH ITA-

TRUCK TO SELL

DESIGNKNOW-HOW

TRANSFE

R

MARKET

ANALYSI

S


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PROVIDE

MANUFACTURING KNOW-

HOW

DETERMINE

SPECIFICATION

(CHASSIS)

ADMINISTRATIVE WORK PRICING

MANUFACTURING AND

ASSEMBLING

DISTRIBUTING

COMPLIANCE

1) DIFFERENT WAYS TO CONDUCT BUSINESSThere are many way to conduct business as there is no single method. Thetwo companies have different strategic.

2) CULTURAL DIFFERENCESHere the cultural difference can be a problem as one company is Americanand other is European.

3) ASSISTANCE FROM A THIRD NEUTRAL PARTYThird party can play a major role in the deals and might take majorbenefits.

4) ADAPT TO LOCAL MARKETS

Adapting to the local market might take some times due to culturaldifferences.

RisksTakeover: One major risk associate with the partnership is that takeover as infuture one company might take over the other company.

Profit distribution: There can be a quarrel between the two companies overthe profit distribution so before entering into the partnership clear rules offersand rules should be laid down.

Different strategies: Having different can results in breakup of thepartnership, so the companies should follows common policies.

Cultural Differences: As the two companies are from two different continentsso the culture will be different, these cultural differences might cause problem inthe companies.

Conclusion

Both the companies should be careful with its corporate governance and it mustestablish a well-defined partnership. The companies should be able to avoid thetransactional relationship. As there is no doubt the international partnership will

boost companies image and profit but both the companies should be ready to

Administrativ

e

Production &

distribution


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take surprise risk also. The companies cost will reduce and will help to improvetheir goods, service and knowledge.

managing an international partnership

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