Joint ventures can be beneficial to organisations wanting to broaden to new markets and territories. Carry on reading to find out more.
For decades, joint ventures in international business have actually culminated in mutually advantageous results, and entities such as Geely and Concordium's recent joint venture is a good example on this. There are numerous reasons why companies go into joint ventures but possibly the most crucial of which is to leverage resources and access knowledge that one company might be missing out on. For instance, one business may have outstanding marketing and distribution channels however lacks a streamlined production center. By partnering with a business that has a well-established production process, both entities benefit considerably. Another reason JVs are popular is the fact that companies share expenses and risks when embarking on a joint venture. This makes the collaboration more attractive as both parties would share the expense of labour and marketing, and they both take advantage of lower production costs per unit by leveraging their capabilities and combining knowledge.
Business growth is an auspicious goal that any business owner considers at some time during their career, nevertheless, it can be an extremely stressful and pricey process. It is for these reasons that some entrepreneurs go with joint ventures when attempting to get into new markets and areas. Launching a world-class joint venture such as Telkom Indonesia and Telstra's joint venture can significantly increase the possibilities of success as partners pool their resources and connections in an effort to maximise effectiveness. For instance, a business wishing to broaden its distribution to new markets and areas can take advantage of partnering with regional businesses. By doing this, it can benefit from a currently existing regional distribution network, not to mention having access to understanding and proficiency on the target market. Beyond this, guidelines in specific jurisdictions limit access to foreign businesses, here meaning that a JV arrangement with a regional entity would be the only way to gain access.
There's a long list of joint ventures that spans various sectors and businesses around the world, a few of which have actually culminated in the development of the world's most successful companies. That stated, there are various types of joint ventures and picking the best one greatly depends on the goals of the entities included and the nature of their respective organisations. For example, project-based joint ventures are a kind of collaboration that combines 2 entities from various backgrounds to reach a common goal. This could be a JV between an industrial entity and an academic institution or short-term partnership in between a business person and a federal government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are likewise another popular means for expansion as these bring together 2 entities that co-exist in the very same supply chain like buyers and wholesellers, and they offer increased development opportunities for both parties.