Otis has negotiated two joint-venture contracts in Vietnam for the manufacture of elevators. The aim is to erect entry barriers and to build a service organisation before their competition. However, competition heats up immediately in a small, short-term oriented market suffering from regulatory uncertainties.
This case demonstrates the uncertainties of emerging markets such as Vietnam. It also discusses the government's wish to receive technology for upgrading its manufacturing capabilities is contrasted with the realities of the market, and technical and managerial constraints of a large MNC. The role of the government as both regulator and partner is displayed.
- Entry Strategy
- Developing Market
- Joint Venture
- First Mover Advantage