What are Joint Ventures and who needs them?

Joint Ventures are entities formed between two or more parties in order to undertake economic activity together, kind of like a partnership. Here both or all parties have to agree to contribute equity and share revenue, expenses and pretty much control of the business.

Now why are Joint Ventures so popular? Well if you know what you are doing, then you can be as big as Sony Ericsson. See, Sony Corporation, which is Japanese, and Ericsson, which is Swedish, decided to put their best feet forward and together establish a joint venture. Sony had consumer electronics expertise and Ericsson had technological leadership in the communication sector, equaling great business which we all see.

That isn’t the only reason Joint Ventures are made. Companies go in to Joint Ventures for many reasons from financial reasons to avoiding risk. Here are some other reasons companies go in to joint ventures:

1. Internal reasons – It’s impossible to have a perfect business, so sometimes it’s better for a company to join another in order to build on its strengths and have fewer weaknesses. A Joint Venture is also good for spreading costs and risks, so everything is not on you. It can help you in getting access to financial resources, expansion, new technology and customers.

2. Competition – You can completely evolve the way things are done so you’re more in the market and you have a larger standing. Instead of having on team, it’s like you’re playing with two. You can use each others expertise to come up with better services or products just like Sony Ericsson.

3. Strategy – Simply a company strategy for concerns with synergies, transfer of technology or skills and diversification.

Joint Ventures are not only for the big boys, it can be between small businesses as well. All that matters is that the two parties fill in each others empty spaces, like a marriage, and when you do things right then you can grow old together.

Here's to your success
Rivers Corbett
MyInternetBiz

"Award Winning Entrepreneur, and Joint Venture Specialist, Rivers Corbett offers an exclusive and exciting opportunity to a limited number of entrepreneurs who are looking to steer clear of the typical ''Get Rich Quick'' hype and build a solid business of * lasting *significance. Click on http://myinternetbiz.ca for more information.