There are various joint venture approaches, each fit for a particular purpose. Here is all you have to understand.

There's a long list of joint ventures that covers various sectors and companies around the world, some of which have culminated in the development of the world's most successful businesses. That stated, there are different types of joint ventures and choosing the best one considerably depends upon the objectives of the entities included and the nature of their respective organisations. For instance, project-based joint ventures are a kind of partnership that unites 2 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 partnership between an entrepreneur 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 two entities that co-exist in the same supply chain like buyers and vendors, and they provide increased development opportunities for both parties.

For years, joint ventures in international business have actually culminated in mutually helpful results, and entities such as Geely and Concordium's recent joint venture is a fine example on this. There are numerous reasons companies enter joint ventures but perhaps the most crucial website of which is to take advantage of resources and gain access to knowledge that one business might be missing out on. For instance, one company might have outstanding marketing and distribution channels but lacks a structured manufacturing hub. By partnering with a company that has a reputable manufacturing process, both entities benefit greatly. Another reason why JVs are popular is the truth that companies share costs and risks when embarking on a joint venture. This makes the partnership more enticing as both entities would share the cost of labour and advertising, and they both benefit from lower production costs per unit by leveraging their abilities and combining knowledge.

Business expansion is an ambitious goal that any entrepreneur considers at some point throughout their professional career, however, it can be a really difficult and expensive procedure. It is for these reasons that some business people choose joint ventures when trying to break into brand-new markets and areas. Launching a world-class joint venture such as Telkom Indonesia and Telstra's joint venture can greatly increase the chances of success as partners pool their resources and connections in an effort to increase efficiency. For example, a company wishing to broaden its distribution to new markets and areas can gain from partnering with local players. This way, it can take advantage of an already existing local distribution network, not to mention having access to knowledge and know-how on the target market. Beyond this, guidelines in specific jurisdictions limit access to foreign businesses, implying that a JV contract with a local entity would be the only method to gain admittance.