Why strategic alliances are necessary to company growth
Why strategic alliances are necessary to company growth
Blog Article
Knowing when to embark on a joint venture and who to do it with is vital. A lot more about this below.
Business expansion is an auspicious objective that any entrepreneur thinks about at some point throughout their professional career, however, it can be a very demanding and expensive check here process. It is for these factors that some business owners opt for joint ventures when trying to break into new markets and territories. Launching a world-class joint venture such as Telkom Indonesia and Telstra's joint venture can greatly increase the possibilities of success as partners pool their resources and connections in an attempt to maximise effectiveness. For instance, a company wishing to broaden its distribution to brand-new markets and areas can gain from partnering with local businesses. In this manner, it can gain from a currently existing local distribution network, not to mention having access to knowledge and proficiency on the target market. Beyond this, guidelines in particular jurisdictions restrict access to foreign businesses, meaning that a JV arrangement with a regional entity would be the only method to gain access.
For years, joint ventures in international business have culminated in equally advantageous results, and entities such as Geely and Concordium's recent joint venture is a good example on this. There are numerous reasons why companies enter joint ventures however potentially the most essential of which is to take advantage of resources and gain access to knowledge that one company may be missing. For instance, one company might have outstanding marketing and circulation channels however lacks a streamlined manufacturing hub. By partnering with a company that has a reputable manufacturing process, both entities benefit significantly. Another reason JVs are popular is the reality that companies share costs and risks when embarking on a joint venture. This makes the collaboration more appealing as both parties would share the cost of labour and advertising, and they both take advantage of lower production costs per unit by leveraging their capabilities and integrating knowledge.
There's a long list of joint ventures that spans different sectors and companies across the globe, some of which have culminated in the development of the world's most prosperous companies. That said, there are various types of joint ventures and picking the best one significantly depends upon the goals of the entities included and the nature of their respective organisations. For instance, project-based joint ventures are a kind of collaboration that combines 2 entities from various backgrounds to reach a common objective. This could be a JV in between a business entity and a university or short-term partnership between a business person and a federal government such as Farhad Azima and Ras Al Khaimah's joint venture. Vertical joint ventures are also another popular vehicle for growth as these combine 2 entities that co-exist in the very same supply chain like buyers and vendors, and they offer increased development opportunities for both parties involved.
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