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Companies know this too, and that is why many are considering joint ventures in this digital age. For instance, Crocs has successfully transitioned from its joint ventures with Post Malone, KFC, and Grateful Dead.
These relationships resulted in Crocs creating new inventions for their foam resin shoes, which significantly increased their sales. The joint venture with KFC alone drove almost 5.8 billion free media impressions.
When Crocs combined these impressions with its free pair for healthcare initiative amidst the coronavirus pandemic, it boosted sales by 15.7 per cent. That said, this is why it is essential to consider a joint venture strategy for your business.
1. You Get To Share Investments And Expenses
During the agreement, each part of the company joining the venture agrees to contribute a given amount of capital. This amount will vary based on the terms of the arrangement you have with the other company or companies.
Additionally, for every expense you experience, the organizations in the venture share their pool of resources. This means that once you get into a joint venture, you no longer have to strive to generate massive capital on your own or incur any costs entirely since it is distributed.
2. You Gain More Technical Expertise
The advantage of joining a joint venture is that, ultimately, each participating company comes with its set of specialized expertise. Therefore, in situations where you usually have to incur an extra cost of hiring or outsourcing expertise, you will already have it at your fingertips.
Besides, the more specialized individuals you have in your project, the more innovative you can be, and innovation is a crucial asset for any organization in the digital age. This also means that moving your business in any direction will be very aggressive.
3. You Can Penetrate New Markets Faster
This is especially true for an international joint venture. Here’s why:
Your new partner will have the upper hand concerning any logistics and required regulations because they understand the local market. Therefore, the process you take to enter this new market will be faster and much more informed.
Think about it, if your strategy is to join the new market on your own, you would have to incur a lot of extra cost on planning and researching. For instance, you’d have to pay a research firm to inform you of the local business regulations and requirements you must fulfil.
But with a joint venture, all this information is provided fast since the local organization benefits from the joint venture itself. This is especially useful since the digital world today is increasingly becoming a global enterprise.
4. You Have Access To Intellectual Property Gains
Your business will not succeed in today’s market if you do not keep advancing your technology. But creating advanced technology is a challenging endeavor to take on in-house. This is where joint ventures come in to shine:
When selecting your partner company, choose one that is rich in technology. Therefore, once you’ve settled on an arrangement, you’ll get access to the organization’s technical assets in-house. This will provoke crucial technological advancement for the development of your products or services.
Besides, the more you advance your technology, the easier it becomes to wade off your competition. An excellent joint venture will even prevent you from experiencing pricing pressure, making it easier to penetrate new markets.
Conclusion
Creating a partnership with another business can be complex. Nonetheless, it is imperative if you want to penetrate the global digital age in 2021. But whatever you do, ensure you have a bulletproof planning and communication process in place.
Disclaimer: This article contains sponsored marketing content. It is intended for promotional purposes and should not be considered as an endorsement or recommendation by our website. Readers are encouraged to conduct their own research and exercise their own judgment before making any decisions based on the information provided in this article.
