Why strategic alliances are important to business growth
Why strategic alliances are important to business growth
Blog Article
Joint ventures can be beneficial to businesses aiming to broaden to new markets and territories. Keep on reading to get more information.
Business expansion is an ambitious objective that any entrepreneur considers at some time throughout their career, nevertheless, it can be a check here really stressful and costly process. It is for these reasons that some business people opt for joint ventures when attempting to get into new markets and areas. Launching a world-class joint venture such as Telkom Indonesia and Telstra's joint venture can greatly increase the chances of success as partners pool their resources and connections in an drive to maximise performance. For instance, a business wanting to expand its distribution to new markets and areas can take advantage of partnering with local businesses. This way, it can gain from an already existing local distribution network, not to mention having access to knowledge and expertise on the target audience. Beyond this, policies in certain jurisdictions restrict access to foreign businesses, meaning that a JV agreement with a local entity would be the only method to gain admittance.
There's a long list of joint ventures that covers different sectors and businesses across the globe, a few of which have actually culminated in the creation of the world's most successful businesses. That said, there are different types of joint ventures and selecting the ideal one greatly depends upon the goals of the entities included and the nature of their respective organisations. For instance, project-based joint ventures are a type of collaboration that brings together two entities from various backgrounds to reach a shared objective. This could be a JV in between an industrial entity and a university or short-term collaboration between an entrepreneur and a federal 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 two entities that co-exist in the same supply chain like buyers and suppliers, and they provide increased development opportunities for both parties.
For years, joint ventures in international business have actually culminated in mutually beneficial outcomes, and entities such as Geely and Concordium's recent joint venture is a fine example on this. There are many reasons why companies go into joint ventures but possibly the most important of which is to take advantage of resources and gain access to proficiency that one company may be missing out on. For instance, one business might have exceptional marketing and circulation channels however lacks a streamlined manufacturing center. By partnering with a company that has a well-established manufacturing process, both entities benefit considerably. Another reason why JVs are popular is the truth that businesses share expenses and risks when embarking on a joint venture. This makes the collaboration more appealing as both parties would share the cost of labour and marketing, and they both take advantage of lower production costs per unit by leveraging their capabilities and integrating knowledge.
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