Joint ventures can be beneficial to companies wanting to expand to brand-new markets and territories. Continue reading to get more information.
Business growth is an ambitious objective that any business owner considers at some time during their career, however, it can be a very difficult and costly process. It is for these factors that some business people opt for 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 chances of success as partners pool their resources and connections in an effort to maximise performance. For instance, a business wanting to broaden its distribution to brand-new markets and territories can gain from partnering with regional businesses. This way, it can gain from an already existing regional distribution network, not to mention having access to knowledge and proficiency on the target market. Beyond this, policies in specific jurisdictions restrict access to foreign companies, indicating that a JV agreement with a local entity would be the only way to gain admittance.
For years, joint ventures in international business have culminated in equally beneficial results, and entities such as Geely and Concordium's recent joint venture is a good example on this. There are lots of reasons why companies enter joint ventures but potentially the most crucial of which is to leverage resources and gain access to expertise that one business might be missing. For instance, one business may have exceptional marketing and circulation channels but lacks a streamlined production hub. By partnering with a business that has a reputable manufacturing process, both entities benefit considerably. Another reason why JVs are popular is the fact that businesses share expenses and risks when embarking on a joint venture. This makes the collaboration more appealing as both entities would share the expense of labour and marketing, and they both benefit from lower production expenses per unit by leveraging their abilities and combining knowledge.
There's a long list of joint ventures that covers various sectors and businesses across the globe, a few of which have actually culminated in the creation of the world's most prosperous companies. That said, there are various 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 type of partnership that brings together two entities from different backgrounds to reach a common objective. This could be a JV between a commercial entity and an academic institution or short-term partnership between a businessman and a government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint website ventures are likewise another popular means for growth as these unite 2 entities that co-exist in the very same supply chain like buyers and suppliers, and they provide increased development opportunities for both parties.