Joint Venture: why venture?

The key word here is leverage.

There is power in numbers ,especially in the business world .One of the most effective and powerful tools is the Joint Venture.

Joint Venture is a business entity or arrangement where two or more companies team up or combine resources on a project or service
for the purpose of expanding their business ,market reach thereby creating a more powerful market presence.

Via a Joint Venture, firms leverage on the strengths of each other to increase productivity at reduced cost.

Case Study
An informal setting : When a make-up artist , a photographer,a designer team-up for a photoshoot. Here, the professionals leveraged on the skillset of the others. Also,the expenses will be reduced compared to the photographer hiring the other two parties (make-up artist and designer) and vice-versa.

In a formal setting e.g : Sony -Erricson

5 benefits of a Joint Venture.

1)Sharing of Capital
2)Sharing of Intellectual Capital
3)Sharing of facilities
4)Sharing of personnel
5)Sharing of physical equipment/facilities.