January 17, 2016

Partnering across the businesses

There are lot of ways to develop partnership with businesses in local or international markets. Among them are international joint venture(JVC) and strategic alliance. In JVC new entity is formed being independent from parent companies interms of finance, management but they still have influence either according to their stake or according to agreement. But in strategic alliance two or more then two organizations agree to share respective capabilities to gain mutual objectives interms of reducing competition, working together to develop something bigger which independently can't be developed due to scracity of resorces. There is nothing like good or bad, but it all depend on circumstance that which model works best in order to achive mutual goals effectively. If partnership is done to promote products of each other, share financial risk, taking help to enter new markets, sharing skills and technology then startegic alliance would ne better choice. And if a company wants to enter a market where there is condition for international businesses to have local investor, then in that situation JVC is the only way to enter market. JVC is also suitable where companies with high experties do combined efforts to achieve mutual agreement by sharing financial risk inorder to achive economis of scale and reduce production cost as well.

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