Knowing when to start a joint venture and who to do it with is crucial. A lot more about this below.
There's a long list of joint ventures that covers various sectors and businesses around the world, a few of which have culminated in the development of the world's most successful companies. That said, there are different types of joint ventures and selecting the ideal 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 collaboration that brings together 2 entities from various backgrounds to reach a common goal. This could be a JV between a business entity and a university or short-term partnership between a business owner website and a government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are likewise another popular vehicle for growth as these combine 2 entities that co-exist in the very same supply chain like buyers and wholesellers, and they provide increased development opportunities for both parties involved.
For decades, joint ventures in international business have actually culminated in equally advantageous results, and entities such as Geely and Concordium's recent joint venture is a fine example on this. There are many reasons businesses go into joint ventures however perhaps the most essential of which is to leverage resources and access proficiency that one business might be missing. For instance, one company might have outstanding marketing and distribution channels however lacks a streamlined production hub. By partnering with a company that has a well-established manufacturing 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 partnership more enticing as both entities would share the cost of labour and advertising, and they both take advantage of lower production expenses per unit by leveraging their capabilities and combining expertise.
Company growth is an ambitious goal that any business owner considers at some time during their career, however, it can be a very demanding and expensive procedure. It is for these factors that some business owners choose joint ventures when attempting to get into new markets and territories. Launching a world-class joint venture such as Telkom Indonesia and Telstra's joint venture can considerably increase the opportunities of success as partners pool their resources and connections in an effort to increase effectiveness. For instance, a business wishing to broaden its distribution to new markets and territories can benefit from partnering with local players. In this manner, it can take advantage of an already existing local distribution network, not to mention having access to understanding and know-how on the target market. Beyond this, guidelines in specific jurisdictions limit access to foreign companies, meaning that a JV arrangement with a local entity would be the only way to gain admittance.