business objective.


economic activity together.  The parties agree to create a new entity by both
contributing equity, and they then share in the revenues, expenses, and control
of the enterprise.  The venture can be for one specific project only, or a
continuing business relationship such as the CK-Auctions Joint Venture.  This is
in contrast to a strategic alliance, which involves no equity stake by the
participants, and is a much less a rigid arrangement.


organization in the Midwest initiated a joint venture whose mission is to develop
and service client tracking software for human service organizations. The five
partners all sit on the joint venture corporation's board, and together have been
able to provide the community with a much-needed resource.


entity.  Therefore, a joint venture may be a corporation, limited liability company,
partnership or other legal structure, depending on a number of considerations
such as tax and tort liability.





cooperations between a local and foreign company (about 3/4 are international).
 A joint venture is often seen as a very viable business alternative in this sector,
as the companies can complement their skill sets while it offers the foreign
company a geographic presence. Studies show a failure rate of 30-61%, and
that 60% failed to start or faded away within 5 years. (Osborn, 2003) It is also
known that Joint ventures in low-developed countries show a greater instability,
and that Joint Ventures (JVs) involving government partners have higher
incidence of failure (private firms seem to be better equipped to supply key
skills, marketing networks etc.)  Furthermore, Joint Ventures have shown to fail
miserably under highly volatile demand and rapid changes in product technology.


companies to form joint ventures with domestic firms in order to enter a market.
This requirement often forces technology transfers and managerial control to the
domestic partner.





Spreading costs and risks
Improving access to financial resources
Economies of scale and advantages of size
Access to new technologies and customers
Access to innovative managerial practices



Influencing structural evolution of the industry
Preempting competition
Defensive response to blurring industry boundaries
Creation of stronger competitive units
Speed to market
Improved agility



Synergies
Transfer of technology/skills
Diversification
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It is an agreement between two or more businesses to mutually accomplish a
A joint venture is an entity formed between two or more parties to undertake
Organizations can also form joint ventures, for example, a child welfare
The phrase generally refers to the purpose of the entity and not to a type of
When are joint ventures used?
Joint ventures are common in the oil and gas industry, and are often
Some countries, such as the People's Republic of China, require foreign
Reasons for forming a joint venture :
Internal reasons :
Competitive goals :
Strategic goals :
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