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A simple model of international joint venture distributorships: the American-Kuwaiti experience

  • Mesak, H. I.
  • Mayyasi, A. M.
Registered author(s):

    The paper develops an analytical model for analyzing international joint venture distributorships in marketing channels selling highly differentiated industrial products. Regarding four alternative forms of demand functions, profits of channel members and consumer welfare under the joint venture arrangement are compared with those under the classic vertical integrated and decentralized structures. Furthermore, optimal allocation of joint venture benefits is discussed and the influence of attitude towards risk and bargaining power have been examined. A case study from international marketing is presented in relation to the theoretical work developed herein. It describes the events that have lead to the formation of a joint venture between an American manufacturer and a Kuwaiti distributor as well as the factors that have contributed to its termination. Implications of the research and its findings to management are also discussed.

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    Article provided by Elsevier in its journal Omega.

    Volume (Year): 23 (1995)
    Issue (Month): 5 (October)
    Pages: 525-538

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    Handle: RePEc:eee:jomega:v:23:y:1995:i:5:p:525-538
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    1. Anne T. Coughlan, 1985. "Competition and Cooperation in Marketing Channel Choice: Theory and Application," Marketing Science, INFORMS, vol. 4(2), pages 110-129.
    2. J Michael Geringer, 1991. "Strategic Determinants of Partner Selection Criteria in International Joint Ventures," Journal of International Business Studies, Palgrave Macmillan, vol. 22(1), pages 41-62, March.
    3. Donald J Lecraw, 1984. "Bargaining Power, Ownership, and Profitability of Transnational Corporations in Developing Countries," Journal of International Business Studies, Palgrave Macmillan, vol. 15(1), pages 27-43, March.
    4. Bardhan, Pranab K, 1982. "Imports, Domestic Production, and Transnational Vertical Integration: A Theoretical Note," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 1020-34, October.
    5. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, June.
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    7. Farok J Contractor, 1990. "Ownership Patterns of U.S. Joint Ventures Abroad and the Liberalization of Foreign Government Regulations in the 1980s: Evidence from the Benchmark Surveys," Journal of International Business Studies, Palgrave Macmillan, vol. 21(1), pages 55-73, March.
    8. Ming-Je Tang & Chwo-Ming Joseph Yu, 1990. "Foreign Market Entry: Production-Related Strategies," Management Science, INFORMS, vol. 36(4), pages 476-489, April.
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    10. Jehoshua Eliashberg, 1986. "Arbitrating a Dispute: A Decision Analytic Approach," Management Science, INFORMS, vol. 32(8), pages 963-974, August.
    11. Weijian Shan, 1991. "Environmental Risks and Joint Venture Sharing Arrangements," Journal of International Business Studies, Palgrave Macmillan, vol. 22(4), pages 555-578, December.
    12. Robert Grosse, 1985. "An Imperfect Competition Theory of the MNE," Journal of International Business Studies, Palgrave Macmillan, vol. 16(1), pages 57-80, March.
    13. Nathan Fagre & Louis T Wells, 1982. "Bargaining Power of Multinationals and Host Governments," Journal of International Business Studies, Palgrave Macmillan, vol. 13(2), pages 9-24, June.
    14. Timothy W. McGuire & Richard Staelin, 1983. "An Industry Equilibrium Analysis of Downstream Vertical Integration," Marketing Science, INFORMS, vol. 2(2), pages 161-191.
    15. Farok J Contractor, 1985. "A Generalized Theorem for Joint Ventures and Licensing Negotiations," Journal of International Business Studies, Palgrave Macmillan, vol. 16(2), pages 23-50, June.
    16. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
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