Anheuser-Busch, the producer of Budweiser and other beers, has recently expanded into Japan by engaging in a joint venture with Kirin Brewery, the largest brewery in Japan. The joint venture enables Anheuser-Busch to have its beer distributed through Kirin’s distribution channels in Japan. In addition, it can utilize Kirin’s facilities to produce beer that will be sold locally. In return, Anheuser-Busch provides information about the American beer market to Kirin.
a. Explain how the joint venture can enable Anheuser- Busch to achieve its objective of maximizing shareholder wealth.
b. Explain how the joint venture can limit the risk of the international business.
c. Many international joint ventures are intended to circumvent barriers that normally prevent foreign competition. What barrier in Japan is Anheuser- Busch circumventing as a result of the joint venture? What barrier in the United States is Kirin circumventing as a result of the joint venture?
d. Explain how Anheuser-Busch could lose some of its market share in countries outside Japan as a result of this particular joint venture.