Features, Merits and Demerits of Joint Venture Video Lecture | Business Studies (BST) Class 11 - Commerce

now coming to joint venture now what is
a joint venture joint venture as the
name suggests joint is combined venture
is doing a project so pooling of
resources and expertise by two or more
business enterprises to achieve a
particular goal is called as a joint
venture examples would be Tata AIG
insurance Tata a company AIG insurance
in Sweden only it could take up Nash
comp should Rukia kotak mahindra TK this
is also a joint venture right now how
does one set up a joint venture why does
the one first let's answer this question
that why does one go for a joint venture
at all okay now we all know that no one
is self-sufficient fine one company a
may be good at certain things
Company B may be good at certain things
fine now if a you know is able to
identify certain characteristics or
certain qualities in Company B which air
does not have so if both of them they
join hands together they'll become a
complete package fine so that is the
reason why they go in for a joint
venture fine now how to set up a joint
venture there are three Veysel we can
say to go about it number one being a
local company buys a share in the
foreign company tk8 local Indian company
in a foreign company may throw us a
share by colour that's a joint venture a
foreign company buys a share in the
local company right or a local company
and a foreign company that together
start to they together think or they
together start up a new venture that's
also a joint venture right now what are
the merits of a joint venture
number one it increases resources and
production capacity obviously when two
entities when two organizations are
joining hands together owned owned okay
capital resources and other resources
they are clubbed together so the
resource pool increases fine and so does
the production capacity right next
access to new markets when two
organizations are joining their hands
together they get an access to each
other's markets there the market expands
then market X
turns it says business firms enter into
joint ventures to explore new markets
multinational companies they get access
to vast Indian markets when their
products reach saturation point in their
own country they start to look for a
market for their product in other
countries where that kind of a product
is still not there or has been
introduced right then access to latest
technology fine if it is a joint venture
between a multinational corporation and
an Indian company definitely Indian
company will be benefited by the latest
technology that the MNC is going to
bring along with it right then
innovations they together are known for
making innovations they are if they are
known for introducing new products or
for introducing existing products with
new uses right then low cost of
production low cost of production Casio
Thea a Gurkha again Bihar key company
India may occupant venture courtesy here
so in India they get labor at a very
very low cost fine and also the other
raw material is available at a lower
cost as compared to their own country so
as a result of which the cost of
production comes down right then
established a proper brand name fine if
again if a US company is trying to enter
India fine let us take an example of
Tata AIG insurance fine data is an
already established brand name fine if a
brand is already established in India
and along with that some other brand
also comes and join in so it will not
have to you know spend the time money
energy in developing a brand
you