In the news article attached the Iraqi’s oil Minister Hussein al-Shahristani has agreed to set up a joint venture with oil and gas giant royal Dutch shell to invest the developing countries natural gas supply, and the Iraq’s has invested 51% into the business and shell’s company has 49%.
By the two business agreeing to set up a joint venture they have formed together using the same name but they are separate businesses. The advantages that both of the company could gain from this is that they are able to access new market, they are also able to increase their capacity and they biggest gain that both of the company sharing their risks and cost with their partner. Both of the business are also having more ideas to share with one another. But by setting up a joint venture between two businesses they are also under going some risks: such as their could be an imbalance in the level of expertise that are involved in the business. By joining with another business they are also different culture and due to that they could have different management ideas which could create conflicts in the business.
Not only is both of the business that has just joined expanding their business in a big way they have also expanding by planning to export their product and services to other developing countries. By them expanding this will increase their market share which could then lead them to filling up more petrol and therefore selling more. Another advantage would be that they would improve their brand recognition around the world....