JV Company would be the best objective because if they are able to reach the negotiations, Nora would benefit from the JV in terms of technology transfer. Nora sakari case, being smaller in size compared to Nora, would expand the reach of the market. They are giving up a lot technology, engineers, knowhow for a lot of questions.
The other evidence that the Joint Venture JV will be beneficial for Sakari is that the large potential for telecom facilities was also evidenced in the low telephone penetration rates for most South-east Asian countries.
Renegotiate Zainal can decide to reach out to Kussisto and setup further negotiations. And if Nora started negotiating with third company then it will be costly as well as time consuming which Nora cannot afford to do as Nora is liable to provide RM2 billion contract to supply digital switching exchanges supporting four million telephone lines.
Sakari was experiencing growth in the telecommunication manufacturing industry however; they were looking to diversify their business. Nora has successfully participated in joint ventures with other countries in the cable business which shows evidence of their experience. Many issues had risen that have stalled the negotiations about the joint venture, which include: These cultural differences have the potential Nora sakari case make a joint venture between these two companies impossible which would be a shame as they both have a lot to gain from working together for a common goal.
Looking at the Nora perspective: Moving forward, they should avoid this unfavorable positioning.
But the ground reality is that Nora needs a partner at any cost and they cannot provide digital switching exchanges to TMB alone or by their own. Also, no further costs would be incurred in negotiating a JV with another firm. In addition to this,Equity ownership, Technology transfer issues, Royalty payment, Salary and compensation issues were the reason behind the failure of the negotiation.
Some of the reasons why I will prioritized the negotiation with Sakari if I were Zainal is that Sakari is one of the globally popular companies in terms of creating joint ventures and to successfully enter the new markets through JV. These negotiations were taken place in ; approximately 5 years after the Malaysian government adopted new regulations that did not employ these percentages any longer.
Therefore, salaries and perks should be given as per the rules and rate in Helsinki. Therefore, the formation of the JV between Nora and Sakari could be the best option for both companies in order to achieve their respective goals……………….
Furthermore, in Malaysia and Thailand, fixed network project were approaching contract stage therefore, for Sakari, it is imperative that Sakari established its presence in this region to capture the share in the fixed network market.
Arbitration Each firm feels more comfortable with arbitration closer to their home country however; a happy medium must be met.
Not only this but also Nora has strong government ties and they already has a contract in hand. Alongside, internal politics and the decision of two opposing "Camps" within Sakari led to complications with one camp opposing the idea to the Joint Venture with Nora and wanting Sakari to enter the U.
A clear and concise plan outlining the benefits and risks for each company must be established. Therefore, in my opinion, both the company should compromise in something in order to materialize the contract.
A Why have the negotiations so far failed to result in an agreement. Therefore, Sakari is the best option for Nora as Sakari can provide what Nora really need and they also know each other as they already involved in the negotiations contract. If Zainal decides to renegotiate [and assuming Kuusisto agreed], how should we restructure the terms of the deal.
Not only this but also a third country will be chosen as a venue for the possible future conflict.
Therefore, they were considering for the joint venture for the successful completion of the TMB contract, but it failed due to certain reasons.
Salaries and Perks should be given as per the conditions in Helsinki because both the companies and their JV need expertise of the Finnish experts who will be working for Sakari.
It is therefore necessary to invest in relationship building before conducting business. Instead, they tended to offer standard products that, in some aspects, were not consistent with the needs of the customers.
Nora seems like they really needs to get this deal done in order to be able to fulfill the 2billion bid it obtained from Telecom Malaysia Bhd. The move into South-East Asia is also stressed in Mattsson stating that Sakari needs access to the fixed network products.
Nora, in particular would benefit from technology transfer, while Sakari would gain knowledge and access to South-east Asian markets. Technology transfer Sakari wanted to protect their intellectual property IP pertaining to switching exchanges.
Sakari should offer a 40% share of the equity ownership percentage while Nora retains an equity ownership of 60% in the joint venture. Nora should allow Sakari to keep production of the switches in house and accept Sakari’s assembly and installation arrangement.
Nora and Sakari should conduct a thorough research on a company's culture prior to negotiating a JV. Research must be conducted regarding arbitration rules between the.
Nora-Sakari: A Proposed JV in Malaysia Case Solution, Nora-Sakari: A Proposed JV in Malaysia Case Solution Introduction and key issues Nora is considered as. International Business Negotiations- The Nora Sakari Case study 1. A) Why have the negotiations so far failed to result in an agreement?
According to us, the main hurdle was the approach with which Zainal the Vice Chairman handled the whole negotiation process. Nora-Sakari Case Study Introduction: Nora and Sakari are considering a joint venture to build digital switching exchanges for the telecom industry in Malaysia, Indonesia, and Thailand.
Nora is a Malaysian telecom company that is looking to become a technology leader in South-east Asia. Apr 11, · Nora Sakari case analysis 1. Why have the negotiations so far failed to result in an agreement?
Is the formation of the JV between Nora and Sakari the best option for both companies to achieve their respective objectives?
Part 1.Nora sakari case