Why strategic alliances are vital to business growth
Why strategic alliances are vital to business growth
Blog Article
Joint ventures can be beneficial to organisations wanting to broaden to new markets and territories. Continue reading for more information.
Company growth is an ambitious objective that any business owner thinks about at some point during their career, however, it can be an extremely demanding and costly process. It is for these reasons that some entrepreneurs choose joint ventures when trying to get into new markets and territories. Launching a world-class joint venture such as Telkom Indonesia and Telstra's joint venture can greatly increase the possibilities of success as partners pool their resources and connections in an effort to increase efficiency. For instance, a company wishing to broaden its distribution to new markets and territories can benefit from partnering with regional players. This way, it can gain from an already existing local distribution network, not to mention having access to knowledge and know-how on the target audience. Beyond this, regulations in particular jurisdictions restrict access to foreign companies, indicating that a JV contract with a local entity would be the only way to gain access.
There's a long list of joint ventures that covers different sectors and companies across the globe, some of which have culminated in the development of the world's most successful businesses. That stated, there are various types of joint ventures and choosing the best one greatly depends upon the objectives of the entities involved and the nature of their respective organisations. For example, project-based joint ventures are a kind of collaboration that combines 2 entities from different backgrounds to reach a shared goal. This could be a JV in between a business entity and an academic institution or short-term partnership between a businessman and a federal government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are also another popular vehicle for expansion as these unite 2 entities that co-exist in the same supply chain like buyers and suppliers, and they offer increased development chances for both parties.
For years, joint ventures in international business have actually culminated in equally beneficial outcomes, and entities such as Geely and Concordium's recent joint venture is a fine example on this. There are many reasons businesses enter joint ventures however potentially the most crucial of which is to leverage resources and access competence that one business may be missing. For example, one business may have outstanding marketing and circulation channels but lacks a structured manufacturing center. By partnering with a business that has a well-established production process, both entities benefit greatly. Another reason JVs are popular is the truth that businesses share costs and risks when starting a joint venture. This makes the collaboration more appealing as both entities would share the expense of labour and advertising, and they both benefit from lower production expenses per unit by leveraging website their abilities and integrating expertise.
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