Such ventures are also profitable where there is foreign competition or short product life cycles. Not only can two companies share production and management experience, but large companies joining with a small company can gain the smaller company's advantages of flexibility and faster decision making. One consideration to keep in mind, however, is that although joint ventures can help a U.S. company get up and running in Europe more quickly, issues of control, trust, and secrecy are important. A joint venture partner may ultimately become a competitor. Keeping communications open between managements about profit and loss sharing and strategic priorities is vital.
Corporate alliances are another way to facilitate international market entry for a device.
Since Picker was already an established x-ray and medical electronics company in Europe, Medtronic established a service referral network through a contractual agreement with Picker. This gave the small, struggling Medtronic credibility with the European medical centers and physicians that after the Medtronic products were purchased, they would be serviced by a much larger and stable company. To reduce international distribution costs, Medtronic located miniature assembly plants in key areas around the world that held the greatest promise for sales. Using these plants helped Medtronic enter countries or regions that were using high tariffs to encourage local production. A small assembly plant with just a few employees can provide a finished product in an otherwise economically hostile environment.