International business
The joint venture between Britain’s JCB, a manufacturer of construction equipment, and Indian engineering conglomerate, Escorts. The two companies linked up to make back hoe loaders for the Indian market. The joint venture was a first for JCB, and proved to be hugely successful, gaining 80 percent of the market. However, JCB felt the arrangement limited its expansion opportunities, and recently bought out its partner. Today, JCN is a major player in the construction equipment market in both India and China. Discussion of the feature can revolve around the following questions.
1. Why did JCB, a company that had traditionally favored wholly owned operations, form a joint venture with Escorts? Did the company have any other alternatives?
2. What prompted JCB to buy out its partner? Do you feel JCB’s concerns were valid? Why or why not?
3. What did JCB learn from its experiences in India? How did this help JCB in its overall strategy?
Note: To further explore JCB’s operations in India and China, go to the company’s web site {http://www.jcb.co.uk/homepage.aspx}, click on “About JCB” and then on “A Global Manufacturer.”