What role does joint venture play in international business?

A joint venture can ensure the success of smaller projects for those that are just starting in the business world or for established corporations. Since the cost of starting new projects is generally high, a joint venture allows both parties to share the burden of the project as well as the resulting profits.

Why joint ventures are attractive in international market?

The key advantages of international joint ventures include: International joint venture provides access to local reputation, know-how, distribution channels, consumer market, knowledge of the local marketplace, local production facilities or government contracts, among others.

Why do companies do joint ventures?

A joint venture affords each party access to the resources of the other participant(s) without having to spend excessive amounts of capital. Each company is able to maintain its own identity and can easily return to normal business operations once the joint venture is complete.

Why are joint ventures attractive?

Joint ventures are not only used to access new markets, they also allow partners to capitalize on their expertise and know-how while relying on shared resources for the benefits of the group. …

Why do companies use joint ventures?

What is an example of international joint venture?

Another popular example for the successful international joint venture is Sony Ericsson. The joint venture of this company was establishes on October 2001, it is the joint venture between Japanese Sony Corporation and the Swedish telecom communications company Ericsson to make mobile phones and smart phones.

What is an example of a successful joint venture?

The definition of a joint venture is a business deal in which two or more people combine their expertise and share the risk, profits and liabilities. An example of a joint venture is a school district and a city park commission coming together to develop a summer recreation program.

What are the types of joint venture agreements?

The type and nature of joint ventures depend on the agreement signed among the parties, and the legal framework governing joint ventures vary from country to country. Insider and Outsider Joint Ventures. The two basic joint venture types are insider joint venture and the outsider joint venture.

What is joint venture strategy?

Updated Jun 17, 2019. A strategic joint venture is a business agreement between two companies who make the active decision to work together, with a collective aim of achieving a specific set of goals and increase their respective bottom lines.