Hisense-Hitachi Joint Venture: Expanding Internationally

Description

In June 2014, Hisense of China and Hitachi of Japan were considering whether their 11-year-old joint venture (JV) should once again assume responsibility for its international sales. After developing a solid central air-conditioner market share in China, in 2009, the JV began to sell in various overseas regions but struggled. In April 2012, the partners agreed to have a Hisense subsidiary (the HIMC) assume full responsibility for selling the JV’s products overseas. However, over the next two years, HIMC’s performance in selling the JV’s products overseas was unsatisfactory. In response, the partners began to discuss whether they should have the JV sell its own products again overseas. Of immediate interest was the Southeast Asian market. This case can be used with Hisense-Hitachi Joint Venture (B): Expanding in Southeast Asia, 9B16M220

Learning Objective

This case can be used in courses in international business, strategy, and corporate governance. It provides a basis for discussing the conflicts and concessions between partners in regard to a JV’s overseas sales, the dynamic relationship between a JV and its parent companies, export strategies across regions, and the associated managerial challenges. Students need to assess the appropriateness of the actions taken to date and decide whether the JV should sell its products again in Southeast Asia. The case allows students to discuss the critical issue of a JV’s international expansion via market diversification and to consider the renegotiation process of JV partners in reaching a win–win situation.

Keywords

China governance Internationalization joint venture partner relationships