Romiro Mabe's Joint Venture Case Study

1385 Words6 Pages
Abstract
It was three years after the recession in 2008, Mabe a home appliances manufacturer started reviewing their Joint Venture (JV) stand with Fagor, a Spanish manufacturer of washing machine in Russian market. Romiro Perez, Mabe’s international Vice-President faced an acute cognitive dissonance about the JV made with Fagor and their entry into Russia.
Problem Statement
In all of their market penetration except Russia and Brazil, Mabe had been very successful in their transition to adapt new environment and understanding the culture.
i. What could had been the initial approach Perez had taken before entering Russia? ii. What corrective measure should Perez embrace to overcome the current situation?
The approach includes the JV with Fagor, revenue generation, pattern of internationalisation, market penetration strategy, transculturation approach and sustainability.
PESTEL Analysis
Political
i. Government interest in Foreign Investment to increase the inward cash flow ii. Capitalistic nature of Russia makes investor hesitant to invest iii. Corruption, bribery and tax system are also important considerations
Economic
i. Russia attracts plenty of foreign direct investment. ii. Poor financial systems like family
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Mabe has certain competitive advantages, but when expanding business into a new country firm should focus on exploiting the resource and capability in the country which helps improvising their competitive advantage. Mabe has the comparative advantage of superior R&D support from GE and producing quality products. Even though Mabe has successful acquisition and JV experience in expanding to new market, Mabe lags certain capabilities to overcome cultural variation and achieving market share in Russian market. As the industry is highly competitive, the entry strategy should be appropriate in terms of selecting their right partners, distribution of products and leveraging availability of

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