Knowing when to start a joint venture and who to do it with is essential. More about this listed below.
Business growth is an auspicious goal that any entrepreneur considers at some time during their career, however, it can be a very difficult and expensive procedure. It is for these factors that some business owners choose joint ventures when attempting to break into brand-new markets and click here areas. Launching a world-class joint venture such as Telkom Indonesia and Telstra's joint venture can considerably increase the opportunities of success as partners pool their resources and connections in an attempt to maximise effectiveness. For instance, a company wishing to expand its distribution to new markets and areas can take advantage of partnering with local businesses. This way, it can benefit from a currently existing local distribution network, not to mention having access to understanding and know-how on the target audience. Beyond this, regulations in certain jurisdictions restrict access to foreign companies, indicating that a JV agreement with a local entity would be the only way to gain access.
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 companies go into joint ventures but potentially the most important of which is to take advantage of resources and gain access to competence that one business might be missing out on. For instance, one company may have excellent marketing and circulation channels but lacks a streamlined production center. By partnering with a company that has a reputable production process, both entities benefit greatly. Another reason JVs are popular is the fact that businesses share expenses and risks when embarking on a joint venture. This makes the collaboration more attractive as both parties would share the cost of labour and marketing, and they both gain from lower production expenses per unit by leveraging their capabilities and integrating knowledge.
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 development of the world's most successful companies. That said, there are different types of joint ventures and picking the ideal one significantly depends on the goals of the entities included and the nature of their respective organisations. For instance, project-based joint ventures are a kind of partnership that brings together two entities from different backgrounds to reach a shared objective. This could be a JV between a business entity and an academic institution or short-term collaboration between a businessman and a federal 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 very same supply chain like buyers and suppliers, and they offer increased development opportunities for both parties.