A SIMPLE-MODEL OF INTERNATIONAL JOINT VENTURE DISTRIBUTORSHIPS - THE AMERICAN-KUWAITI EXPERIENCE

The paper develops an analytical model for analyzing international joi nt venture disrtributorships in marketing channels selling highly diff erentiated industrial products. Regarding four alternative forms of de mand functions, profits of channel members and consumer welfare under the joint venture arrangement are compared with those under the classi c vertical integrated and decentralized structures. Furthermore, optim al allocation of joint venture benefits is discussed and the influence of attitude towards risk and bargaining power have been examined. A c ase study from international marketing is presented in relation to the theoretical work developed herein. It describes the events that have lead to the formation of a joint venture between an American manufactu rer and a Kuwaiti distributor as well as the factors that have contrib uted to its termination. Implications of the research and its findings to management are also discussed.