Similar to any other commercial endeavour, joint ventures have advantages and downsides. This post will note the most noteworthy ones.

Business growth is an auspicious goal that any entrepreneur considers at some time during their professional career, however, it can be a very difficult and expensive procedure. It is for these factors that some businessmen go with joint ventures when attempting 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 attempt to maximise efficiency. For example, a company wishing to expand its distribution to new markets and territories can take advantage of partnering with local players. By doing this, it can benefit from a currently existing regional distribution network, not to mention having access to understanding and know-how on the target market. Beyond this, policies in specific jurisdictions restrict access to foreign businesses, meaning that a JV agreement with a regional entity would be the only method to gain access.

There's a long list of joint ventures that covers different sectors and companies around the world, a few of which have actually culminated in the creation of the world's most successful businesses. That said, there are different types of joint ventures and picking the ideal one greatly depends upon the objectives of the entities included and the nature of their respective organisations. For instance, project-based joint ventures are a type of collaboration that unites 2 entities from different backgrounds to reach a common objective. This could be a JV between an industrial 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 ventures are likewise another popular means for growth as these bring together 2 entities that co-exist in the exact same supply chain like buyers and vendors, and they provide increased development opportunities for both parties.

For decades, joint ventures in international business have culminated in equally helpful results, and entities such as Geely and Concordium's recent joint venture is a fine example on this. There are numerous reasons why companies enter joint ventures however possibly the most essential of which is to take advantage of resources and access know-how that one business may be missing. For example, one business might have outstanding marketing and distribution channels but does not have a structured production center. By partnering with a business that has a well-established manufacturing 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 more info partnership more appealing as both parties would share the expense of labour and marketing, and they both take advantage of lower production expenses per unit by leveraging their capabilities and integrating knowledge.