Joint Venture 7 Tips to get your Joint Venture Project Started

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Joint venture, we have all heard of this term one time or another,
but what exactly is a joint venture? In lay-mans terms a joint
venture is wherein two or more parties build a relationship, they
enter into some agreement to work towards a common goal.

Although they have the same goals these parties remain separate and
distinct from each other. Joint ventures take place across most
industries where companies may combine forces for a specific project
but may even be competitors for others.

A joint venture is truly a great and proven way to access millions of

potential partnerships across countries. Moreover joint venture is
indeed a great way to combine efforts, resources, and ideas which
will eventually increase sales for both sides of the party.

The sales of your online business are more likely to increase with an
increase in the number of people you reach through your joint venture
effort.

If you are an online entrepreneur and you are looking for new
strategies to make your business a success, a joint venture may be in
the cards and just the thing to create that success.

Keep in mind that joint ventures are business partnerships that

require cooperation and trust. However, they do not have to be
permanent nor does a business owner need to share all his or her
secrets to take advantage of a joint venture partnership.

Here are some advantages a joint venture brings to your online

business:

1. Joint venture enables you to access bigger markets. A

strategic joint venture partnership can provide access to larger
customer bases and geographical markets.

Say for example you are running an online business that specializes
in promotional items like shirts, coffee mugs, pens, and other
merchandise with company logos. By forming a joint venture with a
business consultant who has a wide-range of business contact network,
you can supply them with unique promotional items and gain access to
a large catalogue mailing list.

There is a huge marketing possibility with a joint venture. Since

marketing and promotion are always something you need to focus on for
your business, getting otherwise inaccessible market taps can help
your business grow.

2. Joint ventures give your business longer marketing efforts .

The beauty of a joint venture is that not only will it enable you to
access a larger market it also gives you a chance to extend your
marketing efforts.

If you are just starting up your online business then you may not
have the budget yet for advertisements, however if you are part of a
strategic joint venture you would be able to gain new marketing
channels. Additionally, a joint venture strategy may give you more
direct access to decision makers.

3. Joint venture gives you access to new resources /

technology. Every online entrepreneur dreams of expanding his
business with the use of technology.

However have you ever thought of rather than trying to obtain venture
capital for technology expansion, a joint venture is more appropriate
and practical. When you loan money from the back or borrow from
someone else, you have the obligation to pay it back before you
recognize any considerable profit.

But if we use the resources and technology already utilized by a

joint venture partner, you could build business and raise revenues
faster by sharing the profits.

4. Joint venture gives you access to a bigger and longer

prospect list. As of the moment how big is your current opt-in list?

Is there any way that you can expand and make your list grow? If you
have a bigger opt-in list will that mean you get bigger chances of
increasing your profits?

A joint venture has the ability to broaden and grow your opt-in list
in a lot of ways. If you are list leveraging with a partner, then
anyone who responds visits your website, or makes a purchase is added
to your opt-in list.

Doing cross promotions have the same list building capabilities. Say
for example you went ahead and posted an ad for your partner in your
newsletter and they post an ad for you, then eventually everyone on
their list that responds to your ad is now on your opt-in list.

5. Joint ventures promote better customer relationships. As an

entrepreneur your credibility is important, and in offering your
customers a new opportunity, a new product, or a new service with a
reputable partner gives you instant credibility.

Your customers also see you as someone that thinks about his
customers and takes the time and effort to find and present quality
opportunities to them.

When you offer your customers an excellent product or service, you

not only increase your credibility with them, you increase the
likelihood that they are going to buy from you again.

6. A joint venture presents you with an opportunity to gain

capacity and expertise. When you enter into a joint venture always
remember that you should be able to gain as much from the other
company as they can from you. This is one of the biggest advantages
of a joint venture that should not be overlooked.

7. When you enter a joint venture any risk that you might get
into is shared by you and the other party . Since the liability is
shared there is less pressure on your part, and likewise the other
group as well.

Also the flexibility in a joint venture can make your life a lot
easier. Like what I have said earlier a joint venture is good for as
long as your contract stands.

The life span of the agreement can be just enough to cover what you
want as a joint venture is not a life time partnership. A joint
venture is joining forces for one particular project and not putting
two companies together forever and ever.

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venture.html

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Business Services Industry

International Joint Ventures with Pacific Rim Partners

The joint venture with a company in Japan or China is an attractive

way for an American company to enter those markets. The technical
nature of this type of agreement, however, demands in-depth knowledge
of the legal and social issues involved.

With frantic competition in today's international marketplace, many

American companies are turning to the joint venture as a proven
method of attracting capital, technology, and new markets. This
article will examine international joint ventures involving American,
Japanese, and Chinese companies. In addition to the legal aspects, it
will also address some of the cultural issues involved, with
particular emphasis on the role of the lawyer in structuring and
negotiating the joint venture.

THE RATIONALE FOR THE INTERNATIONAL JOINT VENTURE

The underlying reasons for the international joint venture go beyond

survival in the international marketplace or even an interest in
pursuing growth opportunities. The joint venture may be the only
means of gaining market access to countries whose nontariff barriers
and import restrictions make direct exporting difficult if not
impossible. An American company may wish to gain access to materials
of strategic importance or to secure a supply of components at
cheaper prices and from more reliable suppliers than currently
available. China and Japan are well known for posing governmental
restrictions on foreign investment. This makes joint ventures a
viable option for penetrating these markets. In the same vein,
especially with respect to China, the international joint venture
provides an opportunity for an American company to market directly to
the Chinese government through local partners. With the growing
number of Japanese original equipment manufacturers located in the
United States, a joint venture with a Japanese auto components
supplier often provides the American with an opportunity to sell to
the OEM.

The international joint venture also represents an opportunity for

the American partner to acquire technology and marketing expertise,
as well as to improve managerial and sales capabilities. And an
international joint venture, especially with the Japanese, can
minimize risks by allowing both partners to share expenses. An
emerging trend has been for small and medium-sized partners to
combine talents and resources, allowing economies of scale in
manufacturing, distribution, and research and development. The
international joint venture involving potential competitors allows
each partner to forge strategic alliances and international marketing
plans designed to increase market share and prevent in-roads in their
own markets or future markets. Finally, the international joint
venture can help both partners bring new technology to market more
quickly and penetrate distribution channels in new markets that might
otherwise be closed.

These examples are discussed here not because the international joint
venture with Japan or China is an inappropriate strategic decision.
They are instead to serve as reminders to the American company
contemplating a joint venture to carefully evaluate long-term
consequences in relation to its objectives.

STRUCTURING THE INTERNATIONAL JOINT VENTURE

There is no clearly accepted definition of a joint venture. The

common understanding of the term is that it is a form of association
between two or more individuals or businesses to accomplish certain
business objectives. The true joint venture consists of three
essential elements: a separate legal entity; joint ownership of the
legal entity by the joint venture partners; and joint management by
the partners of the separate legal entity.

The joint venture is a flexible method of association that can be

utilized in a variety of situations. Because of its somewhat
amorphous nature, the joint venture has become a catchall term to
describe all cooperative business arrangements (except the corporate
acquisition) involving foreign companies. An effective international
joint venture requires the partners to agree as to their fundamental
objectives; to provide specifically for the necessary transfer of
technology, proprietary rights, or resources that are expected to
occur naturally in a joint venture context; and to develop
appropriate strategies as well as business and legal structures. As
with an acquisition, there is always a second layer of law to
consider that only adds to the complexity of the analysis from a
lawyer's perspective.

The objective of the lawyer in negotiating and structuring a joint

venture is to determine the legal arrangement which best satisfies
the venture partners. Obviously, one cannot expect to find a
structure that will satisfy all of the objectives of the partners. By
analyzing a situation carefully and in detail, however, the
experienced lawyer can develop an optimal joint venture plan.

Joint ventures between American and Japanese companies have many

similarities with joint ventures between American and Chinese
companies, although the arrangement in the latter case is with a
foreign government. Notwithstanding the similarities, there are some
notable differences when a private company enters into a joint
venture with a foreign government. First, the negotiations tend to be
much more difficult, because governmental bureaucracies are
frequently concerned with issues unrelated to the fundamental
business concerns of the joint venture. Secondly, joint ventures with
governmental entities inherently involve multiple levels of approvals
and consents. Third, there tends to be much less flexibility on the
part of a sovereign state. Fourth, dealing with a foreign government
can be something of a mixed blessing. For example, it may be possible
to obtain concessions and agreements which could not be obtained from
an independent individual or business entity. However, the American
company is also much more subject to unilateral negotiation by the
sovereign state and will have limited recourse in the event of a
breach of the joint venture agreement because of the doctrine of
sovereign immunity. Thus, American companies considering a joint
venture with the Chinese need to weigh carefully these risks and plan
for them in an effective manner.

Strategy, structure, and performance of MNCs in China

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