A joint venture (often abbreviated JV) 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 Sony Ericsson joint venture. This is in contrast to a strategic alliance, which involves no equity stake by the participants, and is a much less rigid arrangement. Ownership equity, commonly known simply as equity, also risk or liable capital, is a financial term for the difference between a companys assets and liabilities -- that is, the value that accrues to the owners (sole proprietor, partners, or shareholders). ... In business, revenue is the amount of money that a company actually receives from its activities, mostly from sales of products and/or services to customers. ... In accounting, an expense is a general term for an outgoing payment made by a business or individual. ... For an arrangement of Sony Ericsson products, see list of Sony Ericsson products Sony Ericsson is a joint venture established in 2001 by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones. ... A Strategic Alliance is a formal relationship formed between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations. ...

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. For other uses, see Corporation (disambiguation). ... This article is about a U.S.-specific corporate form; for a general discussion of entities with limited liability, see corporation. ... A partnership is a type of business entity in which partners share with each other the profits or losses of the business undertaking in which all have invested. ... “Taxes” redirects here. ... Not to be confused with torte, an iced cake. ...

[edit] 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 JVs involving government partners have higher incidence of failure (private firms seem to be better equipped to supply key skills, marketing networks etc.) Furthermore, JVs have shown to fail miserably under highly volatile demand and rapid changes in product technology.^{[citation needed]}

Some countries, such as the People's Republic of China and to some extent India, 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.

Majority of joint ventures fail in Asia due to cultural differences, as was the case with the alliance between Renault, a French car company, and Nissan. Joint ventures fail due to various reasons, including the lack of communication and the distribution of power between management. JV For the author, see Mary Renault. ...

[edit] Reasons for forming a joint venture

Internal reasons

1. Build on company's strengths
2. Spreading costs and risks
3. Improving access to financial resources
4. Economies of scale and advantages of size
5. Access to new technologies and customers
6. Access to innovative managerial practices

Competitive goals The increase in output from Q to Q2 causes a decrease in the average cost of each unit from C to C1. ...

1. Influencing structural evolution of the industry
2. Pre-empting competition
3. Defensive response to blurring industry boundaries
4. Creation of stronger competitive units
5. Speed to market
6. Improved agility

Strategic goals

1. Synergies
2. Transfer of technology/skills
3. Diversification

[edit] Examples

• One1mobile between One1 and Netalizer
• AutoAlliance International between Ford Motor Company and Mazda
• Cingular between SBC (now AT&T Inc.) and BellSouth
• Bank DnB NORD between DnB NOR and NORD/LB.
• Equilon between Texaco and Royal Dutch Shell
• Strategic Alliance between Northwest Airlines and KLM Royal Dutch Airlines
• LG.Philips Components between LG Group and Royal Philips Electronics
• NUMMI between General Motors and Toyota
• Penske Truck Leasing between GE and the Penske Corporation
• Sony Ericsson between Sony and Ericsson
• TNK-BP between BP and TNK (Tyumen Oil Co.)
• Verizon Wireless between Verizon Communications and Vodafone
• CW Television Network between CBS Corporation and Time Warner
• The Baseball Network between ABC, NBC, and Major League Baseball
• The Prime Time Entertainment Network from the Prime Time Consortium, a joint venture between Warner Bros. Domestic Television and the Chris-Craft group of independent stations.
• The XFL between NBC and World Wrestling Entertainment
• The Nokia Siemens Networks between Nokia and Siemens AG
• The Balfour Beatty Skanska JV between construction contractors Balfour Beatty and Skanska
• Shell-Mex and BP between Royal Dutch Shell and British Petroleum (1931-1975)

AutoAlliance International (AAI) is the name of a joint venture automobile assembly firm co-owned by Ford Motor Company and Mazda Motor Corporation. ... “Ford” redirects here. ... This article or section does not cite any references or sources. ... Cingular Wireless is the largest United States mobile phone company, with headquarters in Atlanta, Georgia, United States. ... SBC Communications NYSE: SBC is an American telecommunications company based in San Antonio, Texas. ... AT&T Inc. ... BellSouth Corporation was an American telecommunications holding company based in Atlanta, Georgia. ... DnB NORD is a European bank group in Denmark, Estonia, Finland, Latvia, Lithuania and Poland. ... DnB NOR (OSE: DNBNOR) is Norways largest financial services group with total assets of more than NOK 1. ... NORD/LB head office in Hanover The NORD/LB (abbreviation for Norddeutsche Landesbank - Girozentrale) is a bank in Germany. ... Texaco is the name of an American oil company that was merged into Chevron Corporation in 2001. ... Royal Dutch Shell plc is a multinational oil company of British and Dutch origins. ... Northwest Airlines (NYSE: NWA), occasionally known as NWA, is an American airline headquartered in Eagan, Minnesota, near Minneapolis-St. ... KLM Tailfins KLM (in full: Koninklijke Luchtvaart Maatschappij, literally Royal Aviation Company; usual English: Royal Dutch Airlines) is a subsidiary of Air France-KLM. Before its merger with Air France, KLM was the national airline of the Netherlands. ... GoldStar logo, prominently used before the introduction of the LG logo LG Group is a large South Korean chaebol (conglomerate), which produces electronics (including domotics), mobile phones, and petrochemical products and operates subsidiaries like LG Electronics. ... Koninklijke Philips Electronics N.V. (Royal Dutch Philips Electronics Ltd. ... New United Motor Manufacturing, Inc. ... General Motors Corporation (NYSE: GM), also known as GM, is an American automobile maker with worldwide operations and brands including Buick, Cadillac, Chevrolet, GMC, Holden, Hummer, Opel, Pontiac, Saturn, Saab and Vauxhall. ... This article is about the automaker. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... Ge may refer to: Gê, a group of indigenous Brazilian tribes and their Ge languages Ge (Cyrillic) (Г, г), a letter of the Cyrillic alphabet Ge with upturn (Ґ, Ò‘), a letter of the Ukrainian alphabet Nikolai Ge, a Russian painter GÄ“, an ancient Chinese dagger-axe Ge (genus), a genus of butterflies Also... Penske Corporation is a Bloomfield Hills, Michigan-based company, with auto racing legend Roger Penske (Lehigh University Class of 1959) as Chairman, Rob Kurnick as President. ... For an arrangement of Sony Ericsson products, see list of Sony Ericsson products Sony Ericsson is a joint venture established in 2001 by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones. ... Sony Corporation ) is a Japanese multinational corporation and one of the worlds largest media conglomerates with revenue of $66. ... Ericsson () NASDAQ: ERIC. Founded in 1876, Ericsson is a leading provider of communications networks, related services and handset technology platforms. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... This article is about the energy corporation. ... Cellco Partnership, doing business as Verizon Wireless, is the largest American wireless company and largest wireless data provider, based on revenue. ... Verizon Communications, Inc. ... Vodafone Group Plc is a mobile network operator headquartered in Newbury, Berkshire, England, UK. It is the largest mobile telecommunications network company in the world by turnover and has a market value of about £84. ... The CW Television Network, or more casually The CW, is a new television network in the United States set to launch for the 2006-07 television season. ... CBS Corporation (NYSE: CBS) is an American media conglomerate focused on broadcasting, publishing, billboards, and television production, with most of its operations in the United States. ... Time Warner Inc. ... The Baseball Network was a short-lived television joint venture involving the American Broadcasting Company (ABC), the National Broadcasting Company (NBC), and Major League Baseball. ... The American Broadcasting Company (ABC) operates television and radio networks in the United States and is also shown on basic cable in Canada. ... This article is about the television network. ... MLB and Major Leagues redirect here. ... The Prime Time Entertainment Network (also known as PTEN) was a television network launched in 1993 by the Prime Time Consortium, a joint venture between Warner Bros. ... Warner Bros. ... Chris-Craft Industries is a privately held American manufacturer of civilian powerboats based in Sarasota, Florida. ... ‹ The template below is being considered for deletion. ... This article is about the television network. ... World Wrestling Entertainment, Inc. ... Nokia Siemens Networks (NSN) is a telecommunications solutions supplier which was created as the result of a merger (by means of a 50-50 joint venture) between Siemens AGs COM division (minus its Enterprise business unit) and Nokias Network Business Group. ... This article is about the telecommunications corporation. ... “Siemens” redirects here. ... Balfour Beatty plc (LSE: BBY) is a British based construction and civil engineering company based in central London. ... Work in progress on 30 St Mary Axe, one of Skanskas most high-profile contracts. ... -1... Royal Dutch Shell plc is a multinational oil company of British and Dutch origins. ... This article is about the corporation known as BP. See also BP (disambiguation) BP (formerly British Petroleum and briefly known as BP Amoco) (NYSE: BP) is a petroleum company headquartered in London, United Kingdom. ...

[edit] External links

• Cornell Law School's Joint Venture Info Page Contains legal information and relevant definitions regarding joint venture partnerships.
• Joint Venture Marketing on the Internet Definition and explanations of online Joint Ventures.
• Joint Venture Marketing Discussion Joint Venture Marketing networking community and discussion forum.