Joint Venture

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

  • increased captivity

  • access to greater resources