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What are the motives for a joint venture explain with an example of a joint venture?
Wiki User
∙ 11y ago
As there are good business and accounting reasons to create a joint venture with acompany that has complementary capabilities and resources, such as distributionchannels, technology, or finance, joint ventures are becoming an increasingly commonway for companies to form strategic alliances. In a joint venture, two or more "parent"companies agree to share capital, technology, human resources, risks and rewards in aformation of a new entity under shared control. Broadly, the important reasons forforming a joint venture can be presented below:
Internal Reasons to Form a JVSpreading Costs:
You and a JV partner can share costs associated withmarketing, product development, and other expenses, reducing your financialburden.
Opening Access to Financial Resources:
Together you and a JV partner mighthave better credit or more assets to access bigger resources for loans and grantsthan you could obtain on your own.
Connection to Technological Resources:
You might want access to technological resources you couldn't afford on your own, or vice versa. Sharing innovative and proprietary technology can improve products, as well as your own understanding of technological processes.
Improving Access to New Markets:
You and a JV partner can combine customer contacts and together even form a joint product that accesses new markets.
Help Economies of Scale:
Together you and a JV partner can develop products or services that reduce total overall production expenses. Bring your product to market cheaper where the customer can enjoy the cost savings.
External Reasons to Form a JV
Develop Stronger Innovative Product:
Together you and a JV partner may be able to share ideas to develop a product that is more competitive in your industry.
Improve Speed to Market:
With shared access to financial, technological, and distribution resources, you and a JV partner can get your joint product to market faster and more efficiently.Strategic Move Against Competition: A JV may be able to better compete against another industry leader through the combination of markets, technology, and innovation.
Strategic Reasons
Synergistic Reasons:
You may find a JV partner with whom you can create synergy, which produces a greater result together than doing it on your own.
Share and Improve Technology and Skills:
Two innovative companies can share technology to improve upon each other's ideas and skills.Diversification -
There could be many diversification reasons: access to diverse markets, development of diverse products, diversify the innovative working force,
Wiki User
∙ 11y ago
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Where does the joint venture meet the needs of both the parteners where does it fall short?
At the joint
What is difference between joint venture and subsidiary?
If you have control over an entity, that entity is your subsidiary. Control means that you make the strategic decisions of that subsidiary. If you and another party(parties) share joint control over an entity, that entity is a joint venture of the parties that control it. "Joint control" is usually governed by a contractual arrangement and would mean that the unanimous consent of the parties controlling it is necessary to make strategic decisions.
About Cross border of joint venture with advantages?
A Joint Venture (JV) can be broadly defined as a business structure in which two or more parties jointly set up a new company by observe in their resources and technical expertise in order to achieve a desired goal. here they get good profits at the end
What are the Methods of foreign direct investment?
(i) Through international trade (ii) through licensing (iii) through joint venture ect
When A domestic firm and a foreign firm sharing the cost of developing new products or building production facilities in a foreign country constitute what?
Joint Venture
How are joint venture entities taxed?
In order to know how joint ventures are taxed it depends on the type of joint venture formed. There are joint venture companies and just a partnership without forming a legal company. Any, attorney or law website can explain this further. Out-law.com is a good place to start.
Which are the top 10 joint venture companies in the world?
joint venture companies
What types of joint venture are there?
The four types of joint venture are licensing, contract manufacturing, management contracting, and joint ownership
What is the difference between a joint venture partner and subcontractor?
subcontractor join to main contractor to form joint venture but that venture is not partnership
When was Joint Venture - album - created?
Joint Venture - album - was created on 2005-11-15.
What is buyback joint venture?
joint venture, each partner provides inputs and absorbs outputs
Can you sell your portion and be out of a joint venture?
Possibly. It depends, in part, upon the structure of the venture. For example, in a partnership, you may need unanimous consent of the other partners before offering your portion outside of the partnership itself. If the joint venture is merely a contractual relationship between two companies, the contract will often prevent either member of the joint venture from disposing of its interest without the consent of the other member.
When was Wahaha Joint Venture Company created?
Wahaha Joint Venture Company was created on 1996-03-28.
What is the difference between merger and joint venture?
The Joint Venture is temporary partnering and alliance but Merger is permanently combination.
Advantages of joint-venture over partnership?
If taxed as a partnership why is a joint venture different. why is it not considered a partnership too Can a member of the joint venture spend whatever they want without consulting the other member
What are the few examples of joint ventures in Kenya?
An example of a joint venture in Kenya is telecommunications jobs being sent to Kenya to reduce the overall overhead of a business.
Global One was a joint venture of what companies?
Global One, a joint venture of Deutsche Telekom, France Telecom, and Sprint.
