Chapter 6
1. Sunny is the CEO of a Large Corporation That Wants to Enter a Partnership with Another Organization. What Should Sunny Consider When Choosing His Partner?

In my opinion, first is checking their partner’s business climate. There are three steps to find the best business climate. First is accessing to growing market. For this step, Sunny should think about if the market growing well. This includes two things, one is purchasing power, and comparison of a standard set of goods and services in different countries; other one is degree of global competition, which means the number and quality of degree of global competition. Second step is choosing location to build, this step include two factors, one is qualitative factors, for example, work force quality or company strategy. Other one is quantitative factors, for example, kind of facility, tariff and nontariff barriers, exchange rates and transportation and labor costs. The third step is to minimal political risks. In this step we should think political uncertainty, policy uncertainty and strategies for example avoidance strategies, control strategies or cooperation strategies.

After checking their partner’s business climate, Sunny should consider which kind of strategic alliances fit their company. There are four ways to forms for global business, licensing, franchising, joint ventures and wholly owned affiliates. For licensing is a domestic company receives royalty payments for allowing another company to produce its product, sell a service or use its brand name in a specified foreign market, the advantages are: 1. Allow companies to earn profits without investing more money. 2. The licensee invests in production equipment and facilities. 3. Help companies avoid tariff and nontariff. The disadvantages of licensing are: 1. Licensor give up