Joint ventures can be beneficial to companies wanting to broaden to new markets and territories. Keep on reading to learn more.
There's a long list of joint ventures that spans various sectors and companies across the globe, some of which have culminated in the creation of the world's most successful companies. That said, there are various types of joint ventures and picking the right one greatly depends upon the objectives of the entities included and the nature of their respective organisations. For instance, project-based joint ventures are a kind of collaboration that combines two entities from various backgrounds to reach a shared objective. This could be a JV between a commercial entity and a university or short-term collaboration between an entrepreneur and a federal government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are likewise another popular means for growth as these bring together 2 entities that co-exist in the very same supply chain like buyers and wholesellers, and they provide increased growth opportunities for both parties involved.
For decades, 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 good example on this. There are numerous reasons why businesses go into joint ventures however potentially the most essential of which is to leverage resources and access competence that one company might be missing out on. For instance, one company may have outstanding marketing and distribution channels however does not have a streamlined production hub. By partnering with a company that has a reputable production process, both entities benefit considerably. Another reason why JVs are popular is the reality that businesses share expenses and risks when embarking on a joint venture. This makes the collaboration more enticing as both parties would share the expense of labour and marketing, and they both take advantage of lower production expenses per unit by leveraging their abilities and combining expertise.
Business growth is an auspicious objective that any entrepreneur thinks about at some time throughout their professional career, however, it can be a very demanding and pricey procedure. It is for these reasons that some business owners go with 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 greatly increase the possibilities of success as partners pool their resources and connections in an effort to increase performance. For example, a company wishing to expand its distribution to brand-new markets and territories can take advantage of partnering with regional players. 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, regulations in specific jurisdictions limit access to foreign businesses, meaning that a JV contract with a regional here entity would be the only method to gain admittance.