To understand the complexity of an international joint venture, just think about how long it really takes to start a business in the United States. In the U.S., there are few paperwork requirements, and the government doesn t care what your business plan involves, or whether it meets a market need, or whether you ever make a dime from it. Now, in China or Taiwan, you ve got to have a business plan, and you ve got to put it together with some specificity, like who your target market is and how you are going to meet local regulations. And, of course, events can change your plan and the government s attitude toward your business in a moment. There are a host of other factors that could put you out of business much faster than you can get in.
China is a potentially vast market with many enticing opportunities.
You have to work with experienced people who have a commitment to getting your deal closed and know exactly where the pitfalls are. That said, international joint ventures provide U.S. companies with great access to new markets, higher levels of market intelligence, the potential to acquire or share technologies and opportunities to expand into new geographies or new product lines. Pentair, for example, has seven plants in Asia, from India to Japan, and 15 in Europe, from northern Scotland to Italy. Successful joint ventures require clarity of purpose, a careful understanding of the details of the relationship and a significant trust between the parties involved. Some U.S. companies seem to get that advice backwards, by opening their eyes to the challenges of organizing their business marriages only after they have tied the knot.