Joint ventures can be beneficial to companies looking to broaden to new markets and territories. Keep on reading to find out more.
For years, joint ventures in international business have culminated in equally beneficial outcomes, and entities such as Geely and Concordium's recent joint venture is a fine example on this. There are lots of reasons companies go into joint ventures but possibly the most important of which is to take advantage of resources and access know-how that one business may be missing. For instance, one company may have outstanding marketing and circulation channels but does not have a streamlined manufacturing hub. By partnering with a company that has a reputable manufacturing process, both entities benefit significantly. Another reason JVs are popular is the reality that businesses share costs and risks when starting a joint venture. This makes the collaboration more appealing as both parties would share the cost of labour and advertising, and they both take advantage of lower production costs per unit by leveraging their abilities and integrating knowledge.
Company expansion is an ambitious goal that any business owner considers at some point during their career, nevertheless, it can be an extremely stressful and expensive process. It is for these reasons that some business people 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 possibilities of success as partners pool their resources and connections in an effort to maximise performance. For example, a business wishing to expand its distribution to new markets and territories can gain from partnering with local businesses. By doing this, it can benefit from an already existing regional distribution network, not to mention having access to understanding and expertise on the target audience. Beyond this, guidelines in particular jurisdictions restrict access to foreign businesses, suggesting that a JV agreement with a regional entity would be the only method to gain access.
There's a long list of joint ventures that covers various sectors and businesses across the globe, check here some of which have actually culminated in the creation of the world's most prosperous businesses. That stated, there are different types of joint ventures and choosing the best one considerably depends on the goals of the entities involved and the nature of their respective organisations. For example, project-based joint ventures are a type of partnership that unites 2 entities from various backgrounds to reach a common objective. This could be a JV in between an industrial entity and a university or short-term collaboration between an entrepreneur 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 bring together two entities that co-exist in the very same supply chain like buyers and wholesellers, and they offer increased growth opportunities for both parties involved.