By: Cameron Sivji, Royce Ferguson
Advantages and Disadvantages
Advantages of Joint Ventures
The firm benefits from a local partner’s knowledge of their host country’s competitive conditions, culture, language political system and business systems.
This is why most U.S. firms are involved in this alliance because when they can provide the host country with technological know-how, the local firm can provide marketing expertise and knowledge of the local market in return.
Another reason is because Joint Ventures will reduced political risk, a firm is subjected to lower risks of government interference such as its policies and regulations and nationalization because the local firm has some influence over the host government policies.
Joint ventures allow you to have access to new markets and distribution networks
access to greater resources