Joint ventures take place between two or more companies ready to tackle and achieve a specific task or tasks together in uniformity. www.corporatefinanceinstitute.com states that a joint venture (JV) is a commercial enterprise in which two or more organizations combine their resources to gain a tactical and strategic edge in the market. Companies often enter into joint ventures to pursue specific projects. The joint venture may be a new project with similar products or services, or it may involve creating an entirely new firm with different core business activities.
Companies are veering towards joint ventures with companies that are futuristic and digital hybrids in their industries because they already know the set-up is full of growth and wins. Times are changing, the world has transformed and continues to transform into a digital sphere, so much so that businesses and individuals alike are forced to come to terms with this and dance to the tune. Understanding digital transformation is one of the aspects that every business or company needs to be well aware of, despite the industry and field they are in. Businesses are looking forward to joining hands with companies that disrupt norms and do things in a new and fresh way.
According to www.corporatefinanceconstitute.com one of the reasons for forming a joint venture is also to avoid competition and pricing pressure. Through collaboration with other companies, businesses can sometimes effectively erect barriers for competitors that make it difficult for them to penetrate the marketplace. So collaboration can lift those companies struggling, impacting them positively and helping them achieve their goals, hence steering them to success. Joint ventures can also help unlock hidden potential that would have never surfaced had the other company not come in. Collaborations and partnerships hold so much power, and shouldn’t be underestimated.
Some companies come in to bridge that gap and play their part in a diverse way developing and implementing initiatives that can work for businesses, not particularly working towards a certain project or task together. According to the Chief Executive Officer and Founder of The Transformation Legacy, Sibusiso Raphekwane, we design customized and result-driven businesses that respond to industry needs and create new markets.
This demonstrates that if companies come together, and each company plays their part very well, they are setting each other up for success, by fulfilling their mandates yet working for a positive cause and purpose, not for the mere fact of making a profit alone. Do your part as an individual as well.