it is understood by joint venture the economic association between two companies, which may or may not be in the same industry, during a specific and limited period. This partnership can operate in a variety of ways, running for logistical, industrial, commercial, technological and other purposes. In many cases, the joint venture works to expand the consumer market of large multinationals without requiring a large investment in infrastructure and transport.
A joint venture is also often called a economic cooperation and its difference in relation to other associations is that the companies involved do not lose their legal personality. If company A, for example, enters into a joint venture with company B, they do not merge, that is, both continue to exist independently, with their own administrative and economic bodies. In other forms of partnership, such as trusts, companies merge or pool their capital, which does not occur in the joint venture.
One joint venture example well known in Brazil was the
autolatina - one economic cooperation between Volkswagen and Ford between 1987 and 1996. In this cooperation, the cost of assembly, production and marketing was shared, as well as partnerships aimed at strengthening both brands in the country.Another classic example was the Playtronic, a joint venture between Nintendo, Gradiente and Estrela do Brasil that ensured the success of all these brands in the national market. At the end of this partnership in 2000, Nintendo games became more expensive (because they had to be imported), the technical assistance decreased and all the language of the games and supports was no longer available on Portuguese.
At advantages of the joint venture are notable: lower production costs; expansion of brands in remote locations without the need for the physical presence of companies; acquisition of techniques, knowledge and technologies; lessening competition or lessening its effects; expansion of markets; improvement in the quality of products and services, among others.
At China, the practice of joint venture is quite widespread. This is because the Chinese government requires multinational companies that set up in their country to carry out such cooperation with national companies, with the aim of not weakening the national market and preventing foreign capital from becoming harm. As the benefits of the Chinese industrial market are very interesting for investors, these partnerships are then widely carried out, which increases the production and export of products industrialized.
By Me. Rodolfo Alves Pena
Source: Brazil School - https://brasilescola.uol.com.br/geografia/joint-venture.htm