Joint Venture is a term for combining two or more enterprises or entrepreneurs, in which both parties share the profit and loss, and participate together on the management of the joint venture company.
Joint venture in practice: Joint Venture is a good way of common entrepreneurship of more companies without having to merge or acquisite. It is a partnership for joint ventures, often for a limited period of time with a specific objective at which time the joint venture is terminated. Joint Venture is usually implemented by allocating a specific part (usually human resources, production capacity, distribution network and know-how) from partner companies in the joint venture.
Joint Venture is usually founded by partners from the same field in order to strengthen their position in the market, create new products or services using a shared know-how, or by using a common capital.
Joint Venture may be established under the franchise agreement - a joint venture is established by franchisor with a local operator who knows the local market well.
Sony Ericsson has been an example of Joint-Venture.
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