There are different joint venture techniques, each suitable for a specific function. Here is all you have to know.
There's a long list of joint ventures that spans different sectors and companies across the globe, a few of which have actually culminated in the development of the world's most prosperous businesses. That said, there are various types of joint ventures and choosing the right one considerably depends upon the objectives of the entities involved and the nature of their respective organisations. For instance, project-based joint ventures are a kind of collaboration that brings together 2 entities from different backgrounds to reach a common goal. This could be a JV in between a business entity and a university or short-term collaboration between a businessman and a government here such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are also another popular means for growth as these bring together two entities that co-exist in the same supply chain like buyers and suppliers, and they provide increased development opportunities for both parties.
For years, joint ventures in international business have culminated in mutually beneficial outcomes, and entities such as Geely and Concordium's recent joint venture is a fine example on this. There are many reasons companies go into joint ventures but possibly the most crucial of which is to leverage resources and access know-how that one business may be missing out on. For example, one business might have exceptional marketing and circulation channels however lacks a streamlined manufacturing hub. By partnering with a company that has a reputable production process, both entities benefit considerably. Another reason JVs are popular is the reality that companies share costs and risks when embarking on a joint venture. This makes the collaboration more enticing as both entities would share the expense of labour and marketing, and they both gain from lower production costs per unit by leveraging their capabilities and integrating knowledge.
Company expansion is an auspicious goal that any business owner considers at some time during their professional career, however, it can be a very difficult and costly process. It is for these reasons that some business people go with joint ventures when attempting to get into brand-new markets and territories. Launching a world-class joint venture such as Telkom Indonesia and Telstra's joint venture can greatly increase the opportunities of success as partners pool their resources and connections in an effort to maximise effectiveness. For example, a company wanting to expand its distribution to brand-new markets and territories can gain from partnering with regional players. In this manner, it can benefit from a currently existing local distribution network, not to mention having access to knowledge and proficiency on the target audience. Beyond this, guidelines in specific jurisdictions limit access to foreign businesses, suggesting that a JV agreement with a regional entity would be the only way to gain admittance.