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.

Share it:  Cite

More from this Section

  • Boundary less organization
    Another contemporary organizational design is the boundary less organization, which is ...
  • Effectiveness
    Effectiveness is often described as “doing the right things” – ...
  • Horizontal boundaries
    Rules of communication, access, and protocol for dealing with different departments or ...
  • Barriers to Entry
    Barriers to Entry are the obstacles that a firm must overcome to enter an industry. The ...
  • Decentralized business
    Decentralized business is an organization in which a significant amount to the authority ...