What are the motives for a joint venture explain with an example of a joint venture?

As there are good business and accounting reasons to create a joint venture with acompany that has complementary capabilities and resources, such as distributionchannels, technology, or finance, joint ventures are becoming an increasingly commonway for companies to form strategic alliances. In a joint venture, two or more "parent"companies agree to share capital, technology, human resources, risks and rewards in aformation of a new entity under shared control. Broadly, the important reasons forforming a joint venture can be presented below:

Internal Reasons to Form a JVSpreading Costs:

You and a JV partner can share costs associated withmarketing, product development, and other expenses, reducing your financialburden.

Opening Access to Financial Resources:

Together you and a JV partner mighthave better credit or more assets to access bigger resources for loans and grantsthan you could obtain on your own.

Connection to Technological Resources:

You might want access to technological resources you couldn't afford on your own, or vice versa. Sharing innovative and proprietary technology can improve products, as well as your own understanding of technological processes.

Improving Access to New Markets:

You and a JV partner can combine customer contacts and together even form a joint product that accesses new markets.

Help Economies of Scale:

Together you and a JV partner can develop products or services that reduce total overall production expenses. Bring your product to market cheaper where the customer can enjoy the cost savings.

External Reasons to Form a JV

Develop Stronger Innovative Product:

Together you and a JV partner may be able to share ideas to develop a product that is more competitive in your industry.

Improve Speed to Market:

With shared access to financial, technological, and distribution resources, you and a JV partner can get your joint product to market faster and more efficiently.Strategic Move Against Competition: A JV may be able to better compete against another industry leader through the combination of markets, technology, and innovation.

Strategic Reasons

Synergistic Reasons:

You may find a JV partner with whom you can create synergy, which produces a greater result together than doing it on your own.

Share and Improve Technology and Skills:

Two innovative companies can share technology to improve upon each other's ideas and skills.Diversification -

There could be many diversification reasons: access to diverse markets, development of diverse products, diversify the innovative working force,