![]() ![]() The purpose of a joint venture is to attain a competitive edge while minimizing risk. The parties have joint ownership and therefore share costs, losses, and profits. These parties are coming together and pooling their resources to complete a specific task. JV partners benefit from each other's expertise and resources (e.g. A joint venture (JV) is a business arrangement between two or more parties. Your best friend at a time like this may actually be a competitor. Unlike a merger, however, a JV is temporary and is often dissolved or sold on completion of the project that brought the partners together. Indeed, in some cases, this is a requirement of firms entering certain industries in some countries Potential Benefits of Using Joint Ventures as a Method of Growth A joint venture (JV) is an incorporated entity, in which each participating company is responsible for the entitys actions and debts. Joint ventures are often used as a method of one business entering international markets. The parties involved in a joint venture are usually looking to benefit from complementary strengths and resources brought to the venture, as well as sharing the risks and rewards involved. ![]() Usually this is a 50:50 share, although that doesn't have to be the case. Flexibility Short-term nature allows flexibility. Creating a JV provides an opportunity for the parties to benefit from one another’s expertise. Joint ventures are different from takeovers and mergers in that the risks and returns of the business formed as the joint venture are shared by the parties involved. ![]() But the disadvantage is that some contractors have put more efforts than others, thus leading to internal conflicts. A joint venture (JV) is a separate business entity created by two or more parties, involving shared ownership, returns and risks The advantage of this type of joint venture is that for the contractor entering in to the joint venture, each can complement the others skills. ![]()
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