17.InternationalJointVenture.

AnheuserBusch,(whichisnow
partofABInBevduetoamerger),theproducerofBudweiser
andotherbeers,hasengagedinajointventurewithKirin
Brewery,thelargestbreweryinJapan.Thejointventure
enablesAnheuserBuschtohaveitsbeerdistributedthrough
KirinsdistributionchannelsinJapan.Inaddition,itcould
utilizeKirinsfacilitiestoproducebeerthatwouldbesold
locally.Inreturn,AnheuserBuschprovidedinformationabout
theAmericanbeermarkettoKirin.
a. Explain how the joint venture enabled Anheuser-Busch to achieve its objective of
maximizing shareholder wealth.
ANSWER: The joint venture creates a way for Anheuser-Busch to distribute Budweiser
throughout Japan. It enables Anheuser-Busch to penetrate the Japanese market without
requiring a substantial investment in Japan.
b. Explain how the joint venture limited the risk of the international business.
ANSWER: The joint venture has limited risk because Anheuser-Busch does not need to
establish its own distribution network in Japan. Thus, Anheuser-Busch may be able to use a
smaller investment for the international business, and there is a higher probability that the
international business will be successful.
c. Many international joint ventures are intended to circumvent barriers that normally
prevent foreign competition. What barrier in Japan did Anheuser-Busch circumvent as a
result of the joint venture? What barrier in the United States did Kirin circumvent as a
result of the joint venture?
ANSWER: Anheuser-Busch is able to benefit from Kirins distribution system in Japan,
which would not normally be so accessible. Kirin is able to learn more about how AnheuserBusch expanded its product across numerous countries, and therefore breaks through an
information barrier.
d. Explain how Anheuser-Busch could have lost some of its market share in countries
outside Japan as a result of this particular joint venture.
ANSWER: Anheuser-Busch could lose some of its market share to Kirin as a result of
explaining its worldwide expansion strategies to Kirin. However, it appears that AnheuserBusch expects the potential benefits of the joint venture to outweigh any potential adverse
effects.