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Joint Venture - Nora and Sakari

Article: http://211.253.40.86/mille/service/MON/10000/IMG/000000007614/906M06-PDF-ENG.pdf

Questions:
1. Would you identify the problems between Nora and Sakari and the cause?

2. There are three options that Zainal can choose in order to fulfill the TMB contract:
1) To Accept Sakari's terms (which are unsustainable)
2) To Forget JV with Sakari and consider other partners
3) To Re-negotiate - look for a win-win solution
Which is the best? Which order should they be favoured in?

3. If Zainal decide to renegotiate with Sakari, what problems Zanail should focus on?

Solution Preview

1. The problem was the way negotiations were handled by Zainal, the Vice Chairman of Nora. He was used to handling negotiations with his counterparts from U.S or UK and hence believed that it would in the same way for Finland. Negotiators from the United States are very open, verbal and extrovert whereas Sakari negotiators very serious, reserved and cold. The difference in the background of negotiators failed to result in an agreement.

Also there were internal politics with led to formation of two opposing camps. One camp was opposed to the idea of the Joint venture with Nora and Sakari to enter the U.K market and thereby gaining access to European market. They were skeptical of the reason for this joint venture and believed that Nora would duplicate Sakari's technology and emerge as a competitor in the regional market. The other camp believed that there would be high growth in the Asia-Pacific region and that the JV Company in Malaysia would be a hub to enter these markets.
Another cause of the problem was clash in terms of the joint ...

Solution Summary

The expert identifies the problems between Nora and Sakari and the causes. The three options that Zainal can choose in order to fulfill the TMB contract is determined.

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