A joint venture is a legal term that describes the relationship between two or more parties engaging into an agreement to work towards the same strategic outcome while remaining separate entities. It is a theme that is becoming more common between Business Executives and corporations who look to use the strategy to create joint ventures alliances with strategic partners in their chosen industry.
By pooling individual resources together, corporations are able to increase the growth of their business, gain market share and most importantly drive the bottom line much faster.
Strategic Alliances were the Key Element for Toshiba’s Corporate Strategy. In the early 90’s Toshiba signed a co-production agreement for light bulb filaments with GE. Jack Welch, the legendary former CEO of GE. After signing that deal, Toshiba continued their surge by creating strategic alliances across their range of products with partners including Apple Computers, Ericsson, GE, IBM, Microsoft, Motorola, National Semi Conductor, Samsung, Siemens, Sun Microsystems and Thomson.
Toshiba firmly believed that growing their brand into one of the leading players in the electronic industry would not have been possible without the support of their strategic partners within the industry.
“A single company cannot dominate any technology or business by itself” (Mr. Sakaida, President & CEO)
This is only one example of how corporations all around the world are using joint venture partnerships as part of their corporate strategy to success within their chosen industry.
It is a common theme between most well-trusted brands in the world, and if you ask any corporate advisor, CEO or Business Executive he or she will explain to you why it is an absolute must to form alliances with key parties in your industry.
Companies who are not proactive in their attempt to secure joint venture partners may run the risk of giving competitors the opportunity to build those relationships instead, which could be quite detrimental to the success of their organisation.
Creating a successful joint venture relationship requires a great deal of study and due- diligence. There are several aspects an organisation needs to assess before engaging into any joint venture agreement. It is recommended to engage both a brand specialist and corporate advisor to ensure a successful relationship is established.