How Can Chipotle enter Chinese Market Assignment

How Can Chipotle enter Chinese Market - Assignment Example The researcher states that Chipotle should embrace the joint venture strategy to access the Chinese market since it allows more time for the establishment and launch of products. It involves identifying an established firm in China and increasing investment through the sharing of resources. The joint venture strategy is appropriate since it will enable Chipotle to gain knowledge of the local market. This takes place through the host firm’s ability to analyze competitive conditions, culture, language and political systems. Considering these aspects, it becomes easy to understand the preferences of the host clients and the competitive trends in the country. Another advantage of Chipotle using the joint venture entry strategy is that the costs and risks experienced in starting up a foreign market are shared between the partners. This is viable, especially if the host nation charges high duties on foreign firms or if the business will take longer to adapt to the new situations. Si milarly, through joint venture strategy, Chipotle can avoid the threats of nationalization or other unfavorable government hindrance that may arise. This implies that a government policy that may affect the entry of foreign firms is avoided through the collaboration with the local firms. However, this entry strategy may also attract challenges to Chipotle if appropriate measures are not put in place. For instance, the use of the joint venture may enable the host firm to control the production technology. It is also apparent that a firm may lose the tight control over subsidiaries, which it might require to actualize the location economies. This reduces the potential for the firm to expand to other markets across the host nation. There are also instances where joint ventures might lead to conflicts due to losses or control of resources.