In the case of cooperation in the form of a joint venture, companies generally pursue the same interests. What are the advantages and disadvantages of a joint venture? Let's take a closer look at the advantages and disadvantages below. They are therefore not always the ideal form of cooperation. However, joint ventures also have weaknesses. This creates competitive advantages and synergy effects. In principle, a joint venture bundles the strengths of the founding companies. Already in the post-war period, US companies in particular took advantage of cooperation with foreign companies to expand their trade borders. Depending on the extent of the cooperation, it even has the potential to influence the development of an entire industry. These can be, for example, the following factors:įor example, a joint venture can open up access to new markets. Furthermore, a joint venture makes sense if the partners have specific resources that can be easily combined. This form of cooperation is most frequently chosen in order to divide the entrepreneurial risk between two or more partners. When is a joint venture a good solution?Ĭompanies decide to set up a joint venture for various reasons. In principle, however, a joint venture is autonomous and not obliged to follow the instructions of the founding partners. In most cases, the level of capital participation at the time of incorporation influences the decision-making authority of the individual partners. This legally independent company is always founded and managed by two or more independent companies. The partners also jointly perceive the management of the company.Ī joint venture may also be described as a joint venture. They jointly bear the financial risk of their investment. In connection with companies, joint venture means a cooperation in which the partners participate with their own capital. In principle, the meaning of the term joint venture is already revealed by a simple translation (joint = joint, venture = risk). On this page you can find out what the term means, when it makes sense to work together in this way and what other details you should know.
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