Understanding when to embark on a joint venture and who to do it with is important. More about this listed below.
For decades, joint ventures in international business have culminated in mutually helpful outcomes, and entities such as Geely and Concordium's recent joint venture is a good example on this. There are numerous reasons companies go into joint ventures but perhaps the most important of which is to take advantage of resources and gain access to knowledge that one company might be missing. For instance, one company may have outstanding marketing and distribution channels but lacks a structured production hub. By partnering with a company that has a reputable production process, both entities benefit greatly. Another reason why JVs are popular is the fact that businesses share costs and risks when starting a joint venture. This makes the collaboration more enticing as both parties would share the expense of labour and advertising, and they both benefit from lower production costs per unit by leveraging their abilities and integrating expertise.
Business growth is an auspicious objective that any business owner thinks about at some time throughout their professional career, nevertheless, it can be a very stressful and pricey process. It is for these factors that some entrepreneurs opt for joint ventures when trying to break into brand-new markets and areas. Launching a world-class joint venture such as Telkom Indonesia and Telstra's joint venture can considerably increase the possibilities of success as partners pool their resources and connections in an attempt to increase efficiency. For example, a business wishing to expand its distribution to brand-new markets and territories can benefit from partnering with local businesses. By doing this, it can benefit from a currently existing regional distribution network, not to mention having access to knowledge and know-how on the target market. Beyond this, regulations in particular jurisdictions limit access to foreign companies, meaning that a JV contract with a regional entity would be the only way to gain admittance.
There's a long list of joint ventures that covers different sectors and companies around the world, some of which have actually culminated in the development of the world's most successful companies. That said, there are different types of joint ventures and choosing the best one significantly depends on the objectives of the entities involved and the nature of their respective organisations. For instance, project-based joint ventures are a type of partnership that brings together 2 entities from different backgrounds to reach a common objective. This could be a JV between a business entity and a university or short-term partnership in between a business person and a government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are also another popular vehicle for growth as these check here bring together two entities that co-exist in the same supply chain like buyers and suppliers, and they provide increased growth chances for both parties involved.