Market Entry Strategy Of Joint Venture Partner On The Automobile Industry

With the release of the joint stock ratio limit in China's automobile industry,the Sino-foreign joint venture party of joint venture has the chance to enter the market with sole proprietorship,posing a potential threat to the joint venture partner and joint venture.The joint venture party's sole proprietorship market entry strategy has become the focus of attention of all parties.When the joint venture partner chooses to enter the market,it faces the risk of high investment and low income.Therefore,the joint venture partner will consider entrusting the joint venture to outsource production in addition to its own production.The two types of sole proprietorship market entry methods are applicable not only to the independent brand construction of Chinese enterprises,but also to the independent brand construction of foreign companies after the cancellation of the joint stock ratio limit.In addition,even if limit of joint venture stock ratio is released,market entry may not be the best choice for the joint venture partner.There is still strategic space for joint venture partner to continue cooperate.This paper constructs a game model in which the joint venture is the incumbent and the joint venture party is the entry party,considers that Chinese company or foreign company of joint venture has motivation to enter the market,uses the theoretical methods,such as game theory,optimization theory and supply chain management,and uses mathematical modeling and computer simulation to study the impacts of the joint venture party's market entry by independent production and outsourcing production,and the comparisons and trade-off between the joint venture party's two strategies for entering market and expanding cooperation,focusing on the impact of the joint venture stock ratio on the decision equilibrium.The aim of this paper is to explore the internal reasons for the slow development of China's own-brand automobile enterprises and the development direction of Chinese and foreign automobile companies after the cancellation of the joint stock ratio limit.The research content of this paper is mainly divided into the following two parts:The first part is to study the impact of the joint venture party's sole proprietorship on the market and the comparison of the two modes of market entry.This part builds separately the benchmark model of single-product sales,the model of the joint venture party entering the market by independent production and the model of the joint venture party entering the market by outsource production,analyses the impact of the joint venture profit share ratio on price,sales volume and profit,and compares the equilibrium of the game.The results show that:(1)The independent production method of market entry reduces the profits of the joint venture and joint venture partner.The outsource production method of market entry increases the profits of the joint venture and joint venture partner.(2)Comparing the independent production mode with the outsource production mode,only when the joint venture has a higher cost advantage than the joint venture party,the outsourcing production will be the best choice for the joint venture party.Otherwise,when the joint venture has only a weak cost advantage or no cost advantage,the independent production will be the best choice for joint venture party.(3)When the joint venture party enters market by independent production mode,its high joint stock ratio weakens the market entry momentum.When the joint venture party enters market by outsource production mode,its high joint stock ratio enhances the market entry momentum.The second part is to study the joint venture party's choice of sole proprietorship market entry strategy and expanded joint venture cooperation strategy.This part builds the model of expanded cooperation,analyses the impact of the joint venture profit share ratio on price,sales volume and profit,and compares the equilibrium results of the game.The results show that:(1)Expanding joint venture cooperation depends on the common will of the joint venture party and its partner.Expanding joint venture cooperation increases the profits of joint ventures and joint venture partners,and therefore raises the threshold for the sole proprietorship market entry.(2)When the joint venture party's joint venture profit share ratio or relative production cost is high,there is space for the joint venture parties to expand joint venture and cooperation.The sole proprietorship market entry is not the best choice.(3)When the relative production cost of the joint venture party is low,the joint venture party will choose to enter the market solely by independent production,regardless of the joint venture profit share radio of the joint venture parties.(4)The joint venture share ratio can influence the strategic choice of the joint venture partner's sole proprietorship market entry and expended cooperation under certain conditions.In addition,this part further verifies and analyses the robustness of the conclusion through numerical simulation.