Joint ventures can be beneficial to companies wanting to expand to brand-new markets and territories. Continue reading to learn 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 good example on this. There are numerous reasons businesses enter joint ventures but perhaps the most crucial of which is to take advantage of resources and gain access to know-how that one business might be missing out on. For instance, one company might have exceptional marketing and distribution channels however lacks 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 partnership more appealing as both parties would share the expense of labour and marketing, and they more info both take advantage of lower production costs per unit by leveraging their abilities and integrating knowledge.
There's a long list of joint ventures that covers various sectors and companies around the world, some of which have culminated in the development of the world's most successful businesses. That said, there are various 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 kind of collaboration that brings together two entities from different backgrounds to reach a shared goal. This could be a JV between an industrial entity and a university or short-term partnership between an entrepreneur and a government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are also another popular means for growth as these combine 2 entities that co-exist in the very same supply chain like buyers and suppliers, and they provide increased development opportunities for both parties involved.
Business growth is an auspicious objective that any entrepreneur considers at some time throughout their professional career, nevertheless, it can be an extremely difficult and pricey procedure. It is for these factors that some business people opt for joint ventures when trying to break into new markets and territories. Launching a world-class joint venture such as Telkom Indonesia and Telstra's joint venture can greatly increase the chances of success as partners pool their resources and connections in an drive to maximise efficiency. For example, a business wanting to expand its distribution to new markets and territories can gain from partnering with regional players. By doing this, it can benefit from an already existing regional distribution network, not to mention having access to understanding and know-how on the target audience. Beyond this, policies in certain jurisdictions restrict access to foreign businesses, indicating that a JV arrangement with a regional entity would be the only method to gain access.