What does Join Venture mean?

A joint venture is a cooperation of several independent enterprises aimed at achieving a specific goal or conducting a selected activity. All members of such a group share the profits and costs of doing business. An example of a joint venture is Sony Ericsson. Sony is a company operating in the multimedia industry and Ericsson is operating in the telecommunications industry. The cooperation brought many benefits and savings.

Advantages of starting a joint venture

1. synergy of companies - companies complement each other, thanks to which the project is cheaper and develops faster;

2. risk prevention - the risk is distributed among all companies, it is easier to solve problems;

3. access to the capital market of each of the founders of the joint venture;

4. it is easier to survive big changes on the market when you are in a group.

Disadvantages of a Joint Venture

1. the desire to dominate one of the shelves over the others;

2. the possibility of internal conflicts in the event of a different vision of the company's development;

3. different work culture in the case of companies from several countries.