Joint ventures are about give and take. Businesses agree to share the risks and rewards of a project or venture, injecting any combination of resources from each company to deliver the desired results.
If done right the benefits can be huge. Imagine the small startup with a unique, world changing idea. On its own the company may have a hard time pushing their ambitious idea forward. By teaming up with a company that can offer - lets say - established distribution networks, management talent and marketing expertise, a once unachievable target is within reach.
Of course joint ventures aren’t just for companies with big ideas. Any business that wants to do something but lacks the skills or resources to do it well should consider the approach. If a project or task is beyond your reach - in terms of resource, finance, capacity or competency - the benefits of joint ventures may outweigh the costs.
The latest high-profile joint venture in the technology world hopes to change the face of digital media. Five companies - NBC, News Corp., AOL, Yahoo and MSN - are together preparing to launch a new web-based video service that hopes to dominate the online video space. In such a fiercely competitive and dynamic market, the focus here is likely to be on sharing skills, knowledge and customers, over and above the need to manage risk or cost.
In both cases - the small startup and the big five - the challenge is the same. All the companies involved must be happy to work together and feel they are getting as much as they are giving. Finding a partner or partners you can get along with is crucial, as is ironing out the detail to ensure all parties are content and working to the same objectives.
The joint venture challenge is therefore largely about why, who and how. If you get these bits right, there are very real opportunities for growth and success through joint ventures.
Find out more about how to make a joint venture relationship work
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