Joint ventures may mean many things, depending upon the context we are using it in. But in a broader sense, a joint venture is the pooling of resources and expertise by two or more businesses, to achieve a particular goal. The risks and rewards of the business are also shared. It is becoming increasingly common for companies to create joint ventures with other businesses/companies and form strategic alliances with them. The reasons behind the joint venture often include business expansion, development of new products or moving into new markets, particularly in another country. Business can achieve unexpected gains through joint ventures with a partner. The major benefits of joint venture are as follows:

Established brand name: When two businesses enter into a joint venture one of the parties benefits from the other’s goodwill which has already been established in the market. There is a ready market waiting for the product to be launched. A lot of investment is saved in the process.

Low cost of production: The international partner thus, gets the products of required quality and a stipulation at a much lower cost than what is prevailing in the home country.

Increased resources and capacity: Joining hands with another or teaming up adds to existing resources and capacity enabling the joint venture company to grow and expand more quickly and efficiently.

Access to technology: Advanced techniques of production leading to superior quality products saves a lot of time, energy and investment as they do not have to develop their own technology.

Innovation: Joint ventures allow business to come up with something new and creative for the same market. Especially foreign partners can come up with innovative products because of new ideas and technology.