Tag: business studies

The low cost of production for an international company is due to low cost of material and labour and technically qualified workforce. The international partner thus gets the products of required quality and specifications at a much lower cost than what is prevailing in the home country. 

A joint venture is an arrangement in which two or more companies or parties join forces to engage in a specific business activity. The most common reasons for businesses to decide to enter into a joint venture include gaining access to new markets, increasing market power, and sharing resources.

All joint ventures in India require government approval if a foreign partner or a NRI is involved. The approval can be obtained either from the Reserve bank of India or Foreign Investment Promotion Board depending upon particular circumstances. 

When an Indian company joint with a foreign company it is benefited with the increased financial and human resources. Also advanced technology adds to effeciency and effectiveness. Established brand name also saves a lot of investment. 

A joint venture is a strategic alliance where two or more parties, usually businesses, form a partnership to share markets, intellectual property, assets, knowledge, and, of course, profits. A joint venture differs from a merger in the sense that there is no transfer of ownership in the deal.

A joint venture is a strategic alliance where two or more parties, usually businesses, form a partnership to share markets, intellectual property, assets, knowledge, and, of course, profits. A joint venture differs from a merger in the sense that there is no transfer of ownership in the deal since the joint venture is not a legal entity, it does not enter into contracts, hire employees, or have its own tax liabilities. These activities and obligations are handled through the co-venturers directly and are governed by contract law.

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. A lot of investment is saved in this process of using the established brand name.

Jaugar & Land Rover are  British multinational car manufacturer brand headquartered in Whitley, England is owned by the Indian company Tata Motors since 2008. On June 2, 2008, the sale to Tata was completed at a cost of 1.7 billion pounds. A new assembly plant was also opened at Pune in April 2011.

It is becoming increasingly common for companies to create joint ventures with other companies and form strategic alliances with them. The reasons for these alliances may be complementary capabilities and resources such as distribution channels, technology or finance. 

Joint ventures has various benefits. Joining hands with another adds too existing resources and capacity to grow and expand more quickly and efficiently. It also opens up a vast growing market and distribution channels. Advanced technology also adds to the effeciency and effectiveness.