have you heard of… joint venture? If you are not familiar with this type of business, you must be aware that it is very common in the market and favors the companies that choose to do it. Also known by the acronym JV, it is the merger of two or more large business entities made up of individuals, corporations, or even government entities.
That objective The main objective of the joint venture is to combine resources and capital to operate a business unit with common interests in ownership, management and distribution of profits and any losses. With technology and globalization in the 21st century, the phenomenon spread quickly and attracted the interest of big brands.
But that’s not one trend exactly up to date. In a 2004 Harvard Business Review article, consultants James Bamford, David Ernst, and David Fubini of McKinsey & Company, one of the most respected management consulting firms in the world, say that at the time, more than $350 billion in profits from the Joint -Venture company in the last five years.
3 examples of joint venture companies
In the world several large companies are linked to different goals by the joint venture. Check out three famous examples below:
1.Nokia and Siemens
In 2006, the German Siemens and the Finnish Nokia, two giants of the global mobile, announced the formation of a joint venture called Nokia Siemens Networks, based in Espoo in Helsinki, Finland. The idea came from other business organizations in the field (see another example below). The official launch took place in February 2007. This company is the fourth most profitable company in the world among manufacturers of telecommunications equipment.
2. Sony Ericsson
Sony Ericsson, one of the most famous joint venture companies in the world, is a merger of Sony and the Swedish manufacturer Ericsson telecommunications equipment. The Swedish company used chips manufactured by Phillips, but a fire in March 2000 destroyed its facilities. Faced with mounting difficulties, the company secured a partnership with Sony in 2012 and relocated its headquarters from Lund, Sweden to Japan.
The largest company in medication in the world, Pfizer joined forces with a Chinese pharmaceutical company, Zhejiang Hisun, and formed a joint venture based in the city of Hangzhou. The company’s merger came after Pfizer noticed a drop in sales, and also to identify the potential of the Chinese market: according to the company, by the end of 2015 the country will be the second largest drug market in the world.