International Joint Ventures: Dependency in Manufacturing and Design

The movement of firms towards joint ventures and collaborative projects has been a feature of the 1990s. Such agreements allow a means of spreading the costs and risks associated with new product development, sharing costly manufacturing capacity and facilities, and may also provide access to new capabilities. However, there are examples when the relationship is not a success for one of the parties involved. If firms enter joint ventures from a position of weakness or without a concerted strategy, they can become reliant on their partner. This was the case with Rover and its links to Honda. Because of financial weakness Rover's design and manufacturing capabilities were eroded as the majority of its products were replaced with Honda developed models. This case provides important lessons and warnings for other firms seeking strategic alliances, and gives researchers an insight into the complex interaction between firms involved in such a relationship. %Z article %U http://dandini.emeraldinsight.com/10.1108/01443579910260784