Much like any other business endeavour, joint ventures have advantages and drawbacks. This post will list the here most notable ones.

For years, joint ventures in international business have actually culminated in mutually advantageous outcomes, and entities such as Geely and Concordium's recent joint venture is a fine example on this. There are many reasons companies go into joint ventures but possibly the most essential of which is to leverage resources and gain access to expertise that one company may be missing out on. For example, one business might have exceptional marketing and distribution channels but lacks a streamlined production center. By partnering with a business that has a well-established manufacturing process, both entities benefit considerably. Another reason why JVs are popular is the reality that businesses share expenses and risks when starting a joint venture. This makes the partnership more appealing as both entities would share the expense of labour and advertising, and they both benefit from lower production costs per unit by leveraging their capabilities and integrating expertise.

Business expansion is an auspicious objective that any entrepreneur thinks about at some time during their professional career, nevertheless, it can be an extremely stressful and pricey process. It is for these factors that some entrepreneurs opt for joint ventures when attempting to break into new markets and territories. Launching a world-class joint venture such as Telkom Indonesia and Telstra's joint venture can considerably increase the possibilities of success as partners pool their resources and connections in an effort to increase efficiency. For instance, a company wishing to expand its distribution to new markets and territories can gain from partnering with regional players. This way, it can gain from an already existing local distribution network, not to mention having access to understanding and proficiency on the target audience. Beyond this, policies in particular jurisdictions limit access to foreign businesses, suggesting 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 spans various sectors and businesses around the world, some of which have actually culminated in the creation of the world's most successful companies. That stated, there are various types of joint ventures and picking the best 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 kind of partnership that brings together two entities from various backgrounds to reach a shared goal. This could be a JV in between an industrial entity and an academic institution or short-term partnership between a business owner and a federal government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are likewise another popular means for expansion as these bring together two entities that co-exist in the exact same supply chain like buyers and suppliers, and they offer increased development opportunities for both parties involved.