Joint ventures can be beneficial to companies seeking to broaden to brand-new markets and territories. Keep on reading to find out more.
Company expansion is an ambitious goal that any business owner considers at some point during their professional career, however, it can be a really stressful and expensive 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 considerably increase the chances of success as partners pool their resources and connections in an attempt to increase performance. For instance, a business wishing to expand its distribution to new markets and territories can benefit from partnering with local players. In this manner, it can benefit from a currently existing local distribution network, not to mention having access to understanding and know-how on the target market. Beyond this, regulations in certain jurisdictions restrict access to foreign businesses, implying that a JV arrangement with a regional entity would be the only way to gain access.
There's a long list of joint ventures that covers different 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 right one considerably depends on the goals of the entities involved and the nature of their respective organisations. For example, project-based joint ventures are a kind of partnership that unites two entities from various backgrounds to reach a common objective. This could be a JV in between a commercial entity and an academic institution or short-term collaboration in between a business person and a federal government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are likewise another popular means click here for growth as these combine two entities that co-exist in the exact same supply chain like buyers and vendors, and they offer increased growth opportunities for both parties.
For years, joint ventures in international business have actually culminated in equally advantageous results, and entities such as Geely and Concordium's recent joint venture is a good example on this. There are numerous reasons companies go into joint ventures but perhaps the most crucial of which is to leverage resources and gain access to knowledge that one business might be missing. For instance, one business may have outstanding marketing and circulation channels however does not have a streamlined production hub. By partnering with a business that has a reputable production process, both entities benefit considerably. Another reason JVs are popular is the fact that companies share expenses and risks when embarking on a joint venture. This makes the collaboration more enticing as both parties would share the cost of labour and advertising, and they both take advantage of lower production expenses per unit by leveraging their capabilities and combining knowledge.