A quick guide to joint ventures you should check out
A quick guide to joint ventures you should check out
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Understanding when to start a joint venture and who to do it with is essential. More about this below.
There's a long list of joint ventures that spans various sectors and companies across the globe, some of which have culminated in the development of the world's most successful companies. That stated, there are different types of joint ventures and picking the right one considerably depends on the goals of the entities included and the nature of their respective organisations. For example, project-based joint ventures are a type of partnership that unites two entities from various backgrounds to reach a common objective. This could be a JV in between a commercial entity and an academic institution or short-term collaboration between a business owner and a federal government 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 offer increased growth chances for both parties involved.
Business growth is an auspicious goal that any business owner thinks about at some time throughout their career, however, it can be an extremely stressful and costly process. It is for these reasons that some entrepreneurs choose joint ventures when attempting to break into brand-new markets and areas. Launching a world-class joint venture such as Telkom Indonesia and Telstra's joint venture can significantly increase the opportunities of success as partners pool their resources and connections in an effort to maximise performance. For example, a business wanting to expand its distribution to new markets and areas can take advantage of partnering with regional businesses. By doing this, it can gain from an already existing regional distribution network, not to mention having access to understanding and expertise on the target market. Beyond this, regulations in particular jurisdictions limit access to foreign companies, implying that a JV arrangement with a regional entity would be the only method to gain access.
For years, joint ventures in international business have culminated in equally beneficial results, and entities such as Geely and Concordium's recent joint venture is a fine example on this. There are lots of reasons businesses go into joint ventures but perhaps the most important of which is to leverage resources and access know-how that one company may be missing. For instance, one company may have exceptional marketing and circulation channels however does not have a structured manufacturing hub. By partnering with a business that has a well-established production process, both entities benefit significantly. Another reason why JVs are popular is the truth that companies share click here expenses and risks when starting a joint venture. This makes the collaboration more attractive as both parties would share the expense of labour and marketing, and they both gain from lower production expenses per unit by leveraging their abilities and integrating expertise.
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