Joint ventures can be beneficial to organisations looking to expand to brand-new markets and territories. Keep on reading to find out more.
There's a long list of joint ventures that spans different sectors and businesses around the world, some of which have actually culminated in the development of the world's most prosperous businesses. That stated, there are various types of joint ventures and picking the right one greatly depends upon the goals of the entities involved and the nature of their respective organisations. For instance, project-based joint ventures are a type of partnership that combines 2 entities from different backgrounds to reach a shared goal. This could be a JV in between a commercial entity and a university or short-term partnership between a business owner and a federal government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are likewise another popular vehicle for expansion as these combine two entities that co-exist in the same supply chain like buyers and wholesellers, and they offer increased growth chances for both parties.
For years, joint ventures in international business have actually culminated in mutually advantageous outcomes, and entities such as Geely and Concordium's recent joint venture is a fine example on this. There are many reasons why companies go into joint ventures but potentially the most crucial of which is to take advantage of resources and access expertise that one business might be missing out on. For example, check here one company may have excellent marketing and circulation channels but lacks a structured production hub. By partnering with a business that has a well-established manufacturing process, both entities benefit greatly. Another reason why JVs are popular is the reality that businesses share costs 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 gain from lower production expenses per unit by leveraging their capabilities and combining expertise.
Business growth is an ambitious objective that any business owner considers at some point during their career, nevertheless, it can be a really difficult and pricey process. It is for these factors that some businessmen go with joint ventures when trying to break 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 increase effectiveness. For instance, a company wanting to broaden its distribution to brand-new markets and areas can gain from partnering with regional players. This way, it can gain from a currently existing regional distribution network, not to mention having access to knowledge and know-how on the target audience. Beyond this, policies in specific jurisdictions limit access to foreign companies, suggesting that a JV agreement with a regional entity would be the only way to gain access.