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Joint ventures are a way for organizations to overcome challenges and generate revenue in a risky market.
A joint venture is a business agreement between two or more parties to achieve a common aim. When two or more people agree to form a temporary partnership, it can also be considered a joint venture. Partners are known as co-ventures and they share their resources and skills to achieve their goals. They share management, ownership, profits and risks. There are many successful joint ventures examples worldwide that generate huge annual revenues.
Features And Benefits of Joint Ventures
Joint ventures have specific objectives and are sometimes time-bound. Some benefits of a joint venture are:
- Organizations pursue joint ventures to access new emerging markets, share risks of investment in a project, combine operations and assets to gain scale efficiencies or to access capabilities and skills
- Considering examples of joint venture, it differs from a partnership, as partnerships are not limited to one specific objective
- Successful joint ventures examples show such business agreements center on acquisition of resources without heavy spending
- Co-ventures don’t have to set up a new business. Examples of joint venture have shown that organizations keep their autonomy and unique identity
- International joint venture examples are proof that organizations can expand into a new geographic market, target a certain audience, improve market strategies and gain expertise by pooling their resources
Joint ventures create synergies and give organizations a cost advantage. They have carefully constructed agreements and documents that define conditions of the alliance.
Examples Of Successful Joint Ventures
Domestic and international joint venture examples have revealed the extent of flexibility, exposure and scalability involved in such associations. When asked to give an example of joint venture, it’s possible to find many with the right strategies, compatible partners and strong management. Here are some successful joint ventures examples:
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VICTUS Networks
Among examples of joint ventures between domestic organizations, this is a success story. Two domestic rivals, Wind Hellas and Vodafone Greece, created VICTUS Networks to profit both organizations. Vodafone employs over 250 engineering staff for VICTUS Networks, while Wind Hellas took the responsibility of investing over 150 million euros into equipment and construction for the network operations venture.
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Telkomtelstra
Australia’s Telstra and the largest Indonesian telecommunications provider, Telkom Indonesia, joined hands to start Telkomtelstra in 2014. Telkomtelstra won the Stevie Awards in 2016 and is one of the most successful international joint venture examples.
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Saudi Butanol Company (SABUCO)
If you must give an example of joint venture that generates massive revenues, then Saudi Butanol Company might well be on top. Saudi Kayan Co., Saudi Arabian Amiantit Company (SAAC) and Sadara Chemicals Co. established SABUCO as a mixed limited liability organization, with each having 33.3% ownership. SABUCO was founded to operate and manage the world’s largest n-butanol plant, as well as manage distribution.
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Sony Ericsson
Japan’s Sony and Sweden’s Ericsson entered an association which became one of the examples of joint venture that was extremely successful. The two organizations started a joint venture in 2001, with equal share in profit, to manufacture phones and other gadgets. In 2011, Sony bought its partner out.
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Caradigm
Caradigm is a health IT organization started by General Electric and Microsoft Corporation in 2011. The aim was to provide healthcare setups that will improve the business of healthcare and patients’ experience. Caradigm brings together clinical applications and technology, which converts it into intelligence to help healthcare providers.
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HULU
This is one of the examples of joint venture that became a huge success. NBC Universal Television Group and Disney ABC Television Group started a joint venture in 2008 known as HULU. The objective was to create a video streaming website or application to stream high quality content on mobiles, laptops and PCs.
Two or more organizations can choose to enter an agreement for a limited time, which can help them diversify the product line, get competitive and make profits. Joint ventures have gained importance in the market especially because the parties can choose to liquidate and end the venture if the aim is met or if the contract expires. The agreement is the backbone of a joint venture as conditions for alliance decide the profit, risk and flexibility for the organizations.
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Explore Harappa Diaries to learn more about topics such as Advantage Of Joint Venture, Strategic Workforce Planning, Importance Of Business Level Strategy and Skills Gap Analysis that will help organizations tap into employee potential.
