One of the most common entry strategies for MNCs is the joint venture. Why are so many companies opting for this strategy? Would a fully owned subsidiary be a better choice?
Multinational corporations of course would prefer to have a fully owned subsidiary for many reasons, but the main one is more profit, and the second is that they would have total control over the operations and strategic planning without having to consult another party and take permissions. On the other hand, many multinational corporations enter a new market by joining another company and having a joint venture. Many countries feel that MNCs drive away local businesses when they enter, and they would gain market share by economies of scale. Another positive aspect of joint ventures is that MNCs will split the risk of entering a new market by joining another company that is already experienced in the field. They also share the investment and capital, and gain experience and customer base from the existing company.