Why strategic alliances are important to company growth
Why strategic alliances are important to company growth
Blog Article
Joint ventures can be beneficial to organisations seeking to expand to new markets and territories. Keep on reading to find out more.
There's a long list of joint ventures that spans various sectors and businesses around the world, a few of which have culminated in the development of the world's most successful companies. That stated, there are various types of joint ventures and selecting the right one significantly depends on the goals of the entities included and the nature of their respective organisations. For example, project-based joint ventures are a type of collaboration that unites two entities from various backgrounds to reach a shared objective. This could be a JV in between an industrial entity and an academic institution or short-term partnership in between a businessman and a government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are also another popular vehicle for expansion as these bring together two entities that co-exist in the exact same supply chain like buyers and vendors, and they provide increased growth chances for both parties.
For years, joint ventures in international business have culminated in equally helpful outcomes, and entities such as Geely and Concordium's recent joint venture is a good example on this. There are lots of reasons why companies go into joint ventures but potentially the most essential of which is to leverage resources and gain access to expertise that one business might be missing. For instance, one company might have outstanding marketing and circulation channels however does not have a structured production center. By partnering with a company that has a reputable manufacturing process, both entities benefit greatly. Another reason JVs are popular is the fact that businesses share expenses and risks when embarking on a joint venture. This makes the collaboration more enticing as both entities would share the expense of labour and marketing, and they both take advantage of lower production expenses per unit by leveraging their capabilities and integrating knowledge.
Company growth is an auspicious goal that any business owner thinks about at some time during their professional career, however, it can be a very difficult and costly procedure. It is for these reasons that some business owners choose joint ventures when trying to get into brand-new markets and areas. Launching a world-class joint venture such as Telkom Indonesia and Telstra's joint venture can greatly increase the opportunities 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 brand-new markets and areas can gain from partnering with regional businesses. By doing this, it can take advantage of an already existing regional distribution network, not to mention having access to knowledge and know-how on the target audience. Beyond this, policies in particular jurisdictions limit access to foreign businesses, implying that a JV agreement with a regional entity would be the only way to gain admittance.
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