Exactly why strategic alliances are necessary to business growth

Exactly why strategic alliances are necessary to business growth

Blog Article

There are different joint venture methods, each suitable for a specific purpose. Here is all you need to know.

There's a long list of joint ventures that spans different sectors and businesses around the world, some of which have actually culminated in the creation of the world's most prosperous businesses. That stated, there are various types of joint ventures and picking the ideal one considerably depends on the goals of the entities involved and the nature of their respective organisations. For instance, project-based joint ventures are a kind of partnership that brings together two entities from different backgrounds to reach a shared objective. This could be a JV in between a business entity and a university or short-term collaboration between a business person and a government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are also another popular means for growth as these bring together two entities that co-exist in the very same supply chain like buyers and vendors, and they offer increased development opportunities for both parties involved.

Business expansion is an ambitious goal that any entrepreneur considers at some point during their professional career, however, it can be a very difficult and pricey process. It is for these factors that some business owners opt for joint ventures when attempting to break 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 drive to maximise performance. For example, a company wanting to expand its distribution to brand-new markets and territories can benefit from partnering with local businesses. By doing this, it can benefit from a currently existing local distribution network, not to more info mention having access to knowledge and know-how on the target market. Beyond this, guidelines in certain jurisdictions limit access to foreign companies, meaning that a JV contract with a regional entity would be the only way to gain access.

For years, joint ventures in international business have culminated in mutually beneficial results, and entities such as Geely and Concordium's recent joint venture is a fine example on this. There are numerous reasons why businesses go into joint ventures but possibly the most essential of which is to leverage resources and gain access to expertise that one business might be missing. For instance, one business may have outstanding marketing and distribution channels however lacks a structured manufacturing center. By partnering with a company that has a well-established production process, both entities benefit considerably. Another reason why JVs are popular is the truth that businesses share costs and risks when embarking on a joint venture. This makes the collaboration more attractive as both parties would share the expense of labour and advertising, and they both benefit from lower production costs per unit by leveraging their abilities and combining expertise.

Report this page