Internationalization and formation of a Joint Venture with Hong Kong for production rationalization and access to new markets

Context: Italian company near Milan, operating for 40 years, in the mechanical sector connected to the production components. Revenue >25 million Euros, of which 60% in foreign markets, number of employers >80.


  • Market contraction due to the ever increasing competitiveness of Asian players. Revenue decrease. Necessity to form strategic alliances in response to the globalization of markets having an instrument to form a Joint Venture thanks to the pooling of resources which allows each company to keep its own legal and financial autonomy while each partner is responsible for carrying out his own role.
  • Necessity to identify an Asian partner where to move part of the production.
  • Lack of an analysis of both the scenario and of the fundamental elements such as:
  1. Lack of financial resources.
  2. Growth of international sales of low margin products.
  3. Maturity of certain industrial sectors.
  4. Need to identify where to make technological investments.
  5. Very high competitiveness.
  6. Interdependence of the different national economies.
  7. Vulnerability of the company.

 Suggested solution 

  • Temporary Management with the following work plan.
  • Study and draft of the company’s budget, divided into sales, purchase of raw materials, personnel costs, investment budgets.
  • Choice of a partner sharing the same interests.
  • Definition of the investment risk and of the degree of responsibility.
  • Definition of the financial cooperation and of the technical and commercial cooperation
  • Complete and exhaustive assessment of all legal aspects.
  • Negotiation and definition of the Joint Venture Contract comprising every aspect of the relationship between partners: - constitution - allotment of quotas – partner responsibility – fields of prevention – supply – research and training – management – production and sales plans – strategies and marketing


10 months.

 Results achieved 

  • Formation of the Joint Venture.
  • Reduction of competition instability.
  • Rationalization of certain products unprofitable in Italy.
  • Creation and exploitation of synergies.
  • Asian market entry (with a solid position)
  • Achievement of products and capabilities.
  • Optimization of planned investments.