Definition

Joint ventures

Joint ventures refer to commercial companies created and operated for the benefit of the co-owners; usually two or more separate companies that from the venture.

A joint venture is an entity created when two or more firms pool a portion of their resources to create a separate, jointly owned organization. An example is Beverage Partners Worldwide, which is a joint venture between Coca-Cola and Nestle that was created in 2001. The joint venture markets ready-to drink chilled teas based on green tea and black tea in more than 40 countries worldwide.

A common reason to form a joint venture is to gain access to a foreign market. In this cases, the joint venture typically consists of the firm trying to reach a foreign market and one or more local partners.

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