Why strategic alliances are vital to business growth

Why strategic alliances are vital to business growth

Blog Article

There are various joint venture methods, each suitable for a particular function. Here's all you need to know.

There's a long list of joint ventures that spans different sectors and companies around the world, some of which have culminated in the creation of the world's most successful businesses. more info That said, there are different types of joint ventures and choosing the right one considerably depends on the objectives of the entities included and the nature of their respective organisations. For example, project-based joint ventures are a type of partnership that brings together two entities from various backgrounds to reach a common objective. This could be a JV between a business entity and an academic institution or short-term partnership between a business person and a government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are also another popular means for growth as these bring together 2 entities that co-exist in the exact same supply chain like buyers and vendors, and they provide increased development chances for both parties involved.

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 numerous reasons why companies go into joint ventures however perhaps the most important of which is to take advantage of resources and gain access to knowledge that one company may be missing out on. For instance, one business may have exceptional marketing and circulation channels but does not have a streamlined production center. By partnering with a company that has a reputable manufacturing process, both entities benefit significantly. Another reason why JVs are popular is the truth that companies share expenses and risks when embarking on a joint venture. This makes the collaboration more attractive as both parties would share the expense of labour and marketing, and they both take advantage of lower production costs per unit by leveraging their capabilities and combining expertise.

Business growth is an auspicious objective that any business owner thinks about at some point during their career, however, it can be an extremely stressful and costly process. It is for these factors that some business owners 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 significantly increase the opportunities of success as partners pool their resources and connections in an drive to maximise efficiency. For instance, a business wishing to broaden its distribution to brand-new markets and areas can gain from partnering with local players. In this manner, it can benefit from a currently existing local distribution network, not to mention having access to understanding and expertise on the target audience. Beyond this, guidelines 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.

Report this page