Joint ventures can be beneficial to companies aiming to expand to brand-new markets and territories. Keep on reading to find out more.
There's a long list of joint ventures that spans various sectors and businesses across the globe, a few of which have actually culminated in the development of the world's most prosperous companies. That stated, there are various types of joint ventures and choosing the right one significantly depends upon the click here goals of the entities included and the nature of their respective organisations. For example, project-based joint ventures are a kind of collaboration that unites two entities from different backgrounds to reach a common objective. This could be a JV in between a business entity and a university or short-term collaboration between a business owner 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 combine 2 entities that co-exist in the very same supply chain like buyers and suppliers, and they offer increased development opportunities for both parties involved.
Company expansion is an auspicious goal that any entrepreneur thinks about at some time during their professional career, however, it can be a very demanding and expensive procedure. It is for these reasons that some business owners go with joint ventures when trying 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 attempt to maximise efficiency. For example, a business wanting to expand its distribution to new markets and territories can gain from partnering with regional players. In this manner, it can take advantage of an already existing local distribution network, not to mention having access to knowledge and proficiency on the target market. Beyond this, regulations in specific jurisdictions limit access to foreign companies, indicating that a JV agreement with a regional entity would be the only way to gain access.
For decades, joint ventures in international business have culminated in mutually advantageous results, and entities such as Geely and Concordium's recent joint venture is a good example on this. There are many reasons why companies enter joint ventures however possibly the most crucial of which is to leverage resources and gain access to proficiency that one business might be missing out on. For instance, one business might have exceptional marketing and distribution channels however lacks a structured manufacturing hub. By partnering with a business that has a reputable production 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 collaboration more enticing as both entities would share the expense of labour and advertising, and they both benefit from lower production costs per unit by leveraging their abilities and integrating knowledge.