![]() Therefore, companies often enter into joint ventures with technology-rich companies to gain access to these assets without having to spend the time and money to develop the assets for themselves. Intellectual property gainsĪdvanced technologies are often difficult for companies to create in-house. ![]() The larger company’s expanded distribution channels can also provide the smaller company with larger and/or more diversified revenue streams. By entering into a joint venture with a larger company with more financial resources, the small business can grow faster. Small companies often face limited resources and capital for growth projects. With the creation of the joint venture, the companies are able to expand their product portfolio and market size, and the company from country B gets easy access to the market in country A. An international joint venture is an agreement between a company headquartered in country “A” and a company headquartered in country “B” that wants to gain market access in country “A”. ![]() New market penetrationĪ joint venture can enable companies to enter a new market very quickly, as all relevant regulations and logistics are handled by the local player. Technical expertise and know-howĮach party to the joint venture often brings specialized expertise and knowledge, which helps make the joint venture strong enough to move aggressively in a specified direction. Shared expensesĮach party shares a common pool of resources, which can reduce costs on an overall basis. Shared investmentĮach party to the venture contributes a certain amount of initial capital to the project, according to the terms of the partnership agreement, thereby alleviating some of the financial burden imposed on each company. It can help a business grow faster, increase productivity, and generate additional profits. Benefits of a joint ventureĪ joint venture offers several benefits to its participants. ![]() The joint venture is initiated through a contractual agreement between all parties involved, and the profit and loss of the venture are shared by the participants. Companies often enter into a joint venture to pursue specific projects, which may involve new or similar products or services or the creation of an entirely new company with different core business activities. A joint venture (JV) is a business venture in which two or more organizations combine their resources to gain a tactical and strategic advantage in the marketplace. ![]()
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