Knowing when to start a joint venture and who to do it with is crucial. A lot more about this below.
hereCompany growth is an auspicious goal that any entrepreneur considers at some time during their career, however, it can be a really demanding and expensive procedure. It is for these factors that some entrepreneurs choose joint ventures when trying to get into new markets and territories. Launching a world-class joint venture such as Telkom Indonesia and Telstra's joint venture can significantly increase the opportunities of success as partners pool their resources and connections in an effort to increase effectiveness. For example, a business wishing to broaden its distribution to brand-new markets and territories can benefit from partnering with local players. In this manner, 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 particular jurisdictions limit access to foreign businesses, meaning that a JV contract with a regional entity would be the only method to gain access.
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 fine example on this. There are many reasons companies enter joint ventures but perhaps the most important of which is to leverage resources and access proficiency that one business might be missing out on. For example, one company may have exceptional marketing and circulation channels but does not have a streamlined production center. By partnering with a company that has a well-established production process, both entities benefit considerably. Another reason JVs are popular is the truth that businesses share costs and risks when embarking on a joint venture. This makes the partnership 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 abilities and integrating knowledge.
There's a long list of joint ventures that spans various sectors and companies across the globe, a few of which have actually culminated in the creation of the world's most prosperous companies. That said, there are different types of joint ventures and choosing the best one considerably depends upon 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 various backgrounds to reach a shared objective. This could be a JV between a business entity and a university or short-term partnership in between a business person and a government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are likewise another popular vehicle for growth as these bring together 2 entities that co-exist in the very same supply chain like buyers and suppliers, and they provide increased development chances for both parties involved.