Understanding when to start a joint venture and who to do it with is important. A lot more about this below.
Company growth is an auspicious objective that any business owner thinks about at some time during their career, however, it can be a very demanding and expensive process. It is for these factors that some business owners opt for 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 increase efficiency. For example, a company wanting to broaden its distribution to new markets and areas can take advantage of partnering with regional players. In this manner, it can gain from an already existing local distribution network, not to mention having access to knowledge and proficiency on the target audience. Beyond this, policies in specific jurisdictions restrict access to foreign companies, indicating that a JV agreement with a local entity would be the only method to gain admittance.
There's a long list of joint ventures that covers various sectors and companies across the globe, a few of which have culminated in the creation of the world's most successful businesses. That stated, there are various types of joint ventures and picking the best one greatly depends upon 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 combines two entities from different backgrounds to reach a shared goal. This could be a JV between a commercial entity and an academic institution or short-term partnership between a business person and a government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are also another popular means for expansion as these bring together two entities that co-exist in the same supply chain like buyers and suppliers, and they provide increased development chances for both parties.
For decades, 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 numerous reasons why businesses go into joint ventures but possibly the most important of which is to take advantage of resources and gain access to competence that one company may be missing. For get more info example, one company might have exceptional marketing and distribution channels however does not have a structured manufacturing hub. By partnering with a company that has a reputable manufacturing process, both entities benefit greatly. Another reason JVs are popular is the truth that companies share expenses and risks when starting a joint venture. This makes the partnership more enticing as both entities would share the expense of labour and marketing, and they both gain from lower production costs per unit by leveraging their capabilities and integrating expertise.