Joint Venture

Topics: Risk, Ford Motor Company, Joint venture Pages: 2 (569 words) Published: January 6, 2011
The Advantages and Disadvantages of Entering a Joint Venture Entering a joint venture is a complex, and sometimes, time consuming process. As any type business structure, it holds a good opportunity for anyone to grow and make money fast; but just like any other business type, joint venture also holds threat to anyone who wants to enter. Discussed below are the advantages and disadvantages of entering a joint venture. Advantages of Entering a Joint Venture:

• Accessing additional financial resources – Asset sharing is one of the best advantages about joint venture. Since, you are able to use larger funds to facilitate the production and operation of projects and products, you facilitate growth. In other words, you increase profit margin and increase your revenue potential. • Sharing the economic risk with co-venturer – It pays to have someone sharing the responsibility with you in case you end up in deep troubles. This is also true with joint venture. Since you are sharing assets, the risk of losing a great deal of money is divided to both parties. • Widening economic scope fast – Building reputation is often difficult, not to mention time consuming and expansive. At a joint venture, you are able to widen your economic scope without spending too much money and waiting for a long time. • Tapping newer methods, technology, and approach you do not have – In order to grow and expand, you need resources in the forms of methods, technology, and approach. For that matter, it would help a lot if you will be able to partner with an entity that presently has the things you don’t and the things you need. Joint venture opens up the venue for such need. • Building relationship with vital contacts – Aside from economic territory, another advantage of joint venture is the ability to give you business relationships with vital contacts. This is just like automatically befriending your partner’s influential friend that can give you access to lots of things such as business...
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