Growing Paderno Business in the U.S - Case Study Example

It can help them to reduce issues to do with personnel movement into and out of the US and legal and tax issues in the US. In addition, the combination of financial and technical attributes of the two firms will improve their competitive edge, which is a fundamental advantage in a market, which is as aggressive as the US. With several types of partnerships available to Paderno, entering into a joint venture with a US company will be a good choice. They can structure the JV in two ways; either contribute resources to the creation of a new entity that will be operated in collaboration, or enter a partnership agreement allowing the entity to be run as a partnership (Yan & Luo 45).

The latter will be the best choice since it will allow them to leverage their Paderno brand, as they will one of the partners. Entering such an agreement will enable Paderno to decrease their dependency on the Canadian market. This will help them in reducing risks so that if their Canadian market share suffers, they have the US market to compensate (Glover & Wasserman 28). It will also help them to extend their target market by engaging a partner to market their products in the US market under the other company’s name, while also advertising the product as being a joint venture with Paderno Canada. . In addition, selling their cookware solutions to a US company will enable them to introduce their high quality cookware and increase profit margins.

The joint venture will not have any effect on Paderno’s strategy; instead, it will affect their operational performance. This sort of partnership will be one of convenience where they will cut costs by using the facilities of their partner, while also allowing their partner to use their expertise and licenses (Wolf 61). These arrangements are also for a fixed duration, which will allow Paderno to become established in the US before maybe buying out the name of their joint venture and going into business alone.

This would improve Paderno’s competitive advantage in a manner that would not have been possible if they had gone into business alone in the US. If this arrangement becomes a major contributor to the future direction of Paderno, then they could even make it a long-term initiative. By creating a new entity with the US Company and maintaining their autonomy, they will be able to use the other company’s facilities and distribution, while also maintaining their brand name, although not on the product (Wolf 62).

The joint venture will also allow Paderno to achieve the minimum size they need for them to operate in the US market. The company will minimize the inherent risks of entering into a foreign market in which they have little experience (Harrigan 32). In this case, they will meet the costs of entering the US market on a joint basis, particularly in the competitive US market. Paderno must, however, ensure that they company they chose for a joint venture has complementary objectives and interests, such as improving the quality of their products.

Joint ventures are cost effective ways to further development