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Joint Ventures

For the Future Joint Venture Partner

Thank you for your interest in doing a Joint Venture with JustCakeToppers.com. If you
are an established business and would like to start selling our product(s) or service(s)
on your already designed commercial website or if you prefer our company to sell your
product(s) or service(s) on one of our websites you can fill out our Joint Venture Form.
As an additional option if you prefer we can also sell your product(s) on eBay through
our account. All products or services must be related in some way to our site but not
competing in any way.

What is a Joint Venture ?

It is an agreement between two or more businesses to mutually accomplish a business
objective.

A joint venture is an entity formed between two or more parties to undertake economic
activity together. The parties agree to create a new entity by both contributing equity,
and they then share in the revenues, expenses, and control of the enterprise. The
venture can be for one specific project only, or a continuing business relationship such
as the CK-Auctions Joint Venture. This is in contrast to a strategic alliance, which
involves no equity stake by the participants, and is a much less a rigid arrangement.

Organizations can also form joint ventures, for example, a child welfare organization in
the Midwest initiated a joint venture whose mission is to develop and service client
tracking software for human service organizations. The five partners all sit on the joint
venture corporation's board, and together have been able to provide the community
with a much-needed resource.

The phrase generally refers to the purpose of the entity and not to a type of entity.
Therefore, a joint venture may be a corporation, limited liability company, partnership or
other legal structure, depending on a number of considerations such as tax and tort
liability.

When are joint ventures used ?

Joint ventures are common in the oil and gas industry, and are often cooperations
between a local and foreign company (about 3/4 are international). A joint venture is
often seen as a very viable business alternative in this sector, as the companies can
complement their skill sets while it offers the foreign company a geographic presence.
Studies show a failure rate of 30-61%, and that 60% failed to start or faded away within
5 years. (Osborn, 2003) It is also known that Joint ventures in low-developed countries
show a greater instability, and that Joint Ventures (JVs) involving government partners
have higher incidence of failure (private firms seem to be better equipped to supply key
skills, marketing networks etc.) Furthermore, Joint Ventures have shown to fail
miserably under highly volatile demand and rapid changes in product technology.

Some countries, such as the People's Republic of China, require foreign companies to
form joint ventures with domestic firms in order to enter a market. This requirement
often forces technology transfers and managerial control to the domestic partner.

Reasons for forming a joint venture :

Internal reasons :

-Spreading costs and risks
-Improving access to financial resources
-Economies of scale and advantages of size
-Access to new technologies and customers
-Access to innovative managerial practices

Competitive goals :

-Influencing structural evolution of the industry
-Preempting competition
-Defensive response to blurring industry boundaries
-Creation of stronger competitive units
-Speed to market
-Improved agility

Strategic goals :

-Synergies
-Transfer of technology/skills
-Diversification

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*Provided by Wikipedia, the free encyclopedia