Read the short scenario below and answer ALL the questions

Joint ventures and strategic alliances are especially attractive when a firm believes that

working closely with locals will provide important knowledge about local conditions,

facilitate acceptance of their involvement by government officials, or both. In the late

$1980$s$,$ China was a difficult market for American businesses to enter. Executives at

KFC saw China as an attractive country because chicken is a key element of Chinese

diets. After considering the various options for entering China with its first restaurant,

KFC decided to create a joint venture with three local organisations. KFC owned $51\%$ of

the venture; having more than half of the operation was advantageous in case

disagreements arose. A Chinese bank owned $25\%,$ the local tourist bureau owned $14\%,$

and the final $10\%$ was owned by a local chicken producer that would supply the

restaurant with its signature food item. Having these three local partners helped KFC

navigate the cumbersome regulatory process that was in place and allowed the

American firm to withstand the scrutiny of wary Chinese officials.

Question $1$

Discuss the risk KFC may face in deciding to joint venture with three local organisations.

Question $2$

Advise KFC on the steps to be considered in order to stay strategically competitive in

the China fast food industry for a longer term.