Joint Venture: A need for a growing company

A growing business needs expansion into new areas. The opportunities for growing business are always plentiful than the means to realise them. Business must decide what opportunities it wants to purse and what are the steps it has to take to realise that selected opportunity. One of the well known business strategies considered in such situation is joint venture.

A join venture, in which two companies combine as partners to found another independent company but jointly-owned third company is often the best way to enter a new market from that of either company. Joint-venture is also a good approach to bring two separate knowledge resources to bear on a new opportunity.

For example, in 1981 Maruti Udyog ( Now Maruti suzuki) was created as a Joint Venture between Indian Government and Suzuki to produce people car in India. The JV produced its first care within 13 months and released to the market. This example shows how technology was brought from another company to serve another market

A more recent example is that of Infosys and MortageFlex systems which have created a new JV. The JV or alliance focuses on support of US loan servicing, loan modification initiatives. Mortageflex systems is a leading origination and servicing technology solution supplier for the US mortgage industry. The right mix of service offerings, experience and technology of partners gives US lenders and servicers an opportunity to eliminate ramp-up fixed costs and staff for relatively short durations.