Introduction to Business: External growth. ✔️ Flashcards
What is a joint venture
A commercial agreement between two or more businesses who agree to cooperate in order to meet a certain objective
What is a strategic alliance
An arrangement between two companies to undertake a mutually beneficial task while both retain their independence
Impact and importance of joint ventures to a business and its stakeholders
Diversification: Joint ventures can help businesses diversify their operations by entering new markets or industries, which can reduce risk and increase opportunities for growth.
Increased resources: Joint ventures can provide businesses with access to additional resources, such as capital, technology, and intellectual property, which can help them to develop and implement new products or services more quickly and efficiently.
Shared risk: Joint ventures allow businesses to share the risks and costs associated with developing and launching new products or services, which can help to reduce financial risk and increase the chances of success.
Access to new markets: Joint ventures can provide businesses with access to new markets or distribution channels, which can help them to expand their customer base and increase their revenue.
Knowledge and expertise sharing: Joint ventures provide an opportunity for businesses to learn from each other and share knowledge and expertise, which can lead to improved operations and better decision-making.
Impact and importance of a strategic alliance to a business and its stakeholders
Increased market share: A strategic alliance can provide access to new markets, customers, and distribution channels, which can increase a business’s market share and revenue.
Shared resources: Strategic alliances can provide access to additional resources, such as technology, expertise, and capital, which can help businesses to develop new products or services and enter new markets more quickly and efficiently.
Cost savings: Strategic alliances can lead to cost savings through shared expenses and economies of scale, which can benefit both the business and its stakeholders.
Reduced risk: Strategic alliances can help businesses to share risk and reduce the costs and uncertainty associated with developing new products or entering new markets.
