The Four Key Differences Between Project-Based Partnerships And Equity Joint Partnerships

-A partnership is an organizational form that contains two or more people who are able to be joined together legally in order to share the management duties and make profit from the business.

Joint Stock Companies- A Joint Stock Company is a company that has stocks that are available to be shared by different shareholders. Joint Stock Companies were formed around the 1600s by the English parliament after the amount of money spent in the battle against the Spanish for North America. This made it possible to gather money to colonize.

Joint venture is an agreement between two or more parties to gather or pool resources together so as to accomplish a specified goal. The main objective is to implement a new business idea or project. The venture is a separate entity from the participants and their businesses. However proceeds, losses and costs incurred from the activities of the venture, the participants are responsible.

Joint-Stock Company: A business with transferable shares and shareholders having little to no liability for their debts. a business that sought to separate that of legal existence and the sharing of ownership between the shareholders.

Joint-stock company: Joint-stock companies are companies made up of shareholders, who all invest in this company and receives some of the profits and debts. Joint-stock companies opposed the strict, traditional European economic standards which revolved around just prices, where profiting was looked down upon, and reciprocity, in which trade was for mutual benefit. However, this created problems, where investors were more and more determined to acquire more shares, creating more tension between social classes, as the rich became richer and the poor became poorer.

A foreign investor may enter into a joint venture by combining with a national of a host country to create a new entity or by acquiring a portion of an existing local entity.

When the companies joining create a separate organization to create their product, the enterprise is called a joint venture.

Equity-based alliances include co-marketing, research and development, contracts, turnkey products, strategic suppliers, strategic distributors, and licensing/franchising.

Last but not least, having a cross-border strategic alliance with a partner will help to bring unique resources, skills, and personnel when working together. Because B/E Aerospace already has its operations in the global market, this method works when the company learns how to develop new core competencies and new capabilities from its global partner(s). However, the challenges of a cooperative strategic alliance lay between the differences of the organizational culture and the partner’s culture. The very first stage of strategic alliances is to choose the right partner based on the foundation of trust and honesty. Complex laws, regulations, and initiatives can be hard to mutually benefit both partners.

Joint venture can help Saudi Group in diversifying its business activities. Milton R. Stewart; Ryan D. Maughn (2011) pointed out “Efficient and cost effective ways to enter foreign markets that allow companies to share risks and exploit synergies with partner companies continue to drive businesses toward international joint ventures, it can provide access to unique business opportunities and new geographic markets that may not otherwise be available, especially to smaller and medium sized businesses”. Business diversification can avoid Saudi Group depends on profit contribution from local business activities only, profit from international entry can help in expanding the local business activities. Joint venture is able to resolve both long and short-term problem and effectively deal with the weaknesses and thread of Saudi

While trying to establish international operations, companies are faced with

“A joint venture is a legal organization that takes the form of a short term partnership in which the persons jointly undertake a transaction for mutual profit. Generally each person contributes assets and share risks. Joint ventures are also widely used by companies to gain entrance into foreign markets.” (Cornell University Law School) In way to engage ones customers with new stuff, joint venture has become paramount in satisfying customers with variety and also infuse modernization and advance technology. An example is the introduction of the popular video streaming website “HULU” created by a joint venture in the year 2008 by NBC Universal Television Group, Fox Broadcasting Company and the Disney –ABC Television Group. This venture

Once an organization has decided to expand into the global marketplace, it must select a method of market entry. Companies may choose from five general options: (1) exporting, (2) franchising, (3) a strategic alliance, (4) a joint venture, and (5) direct investment. Deciding which option is right for an organization is based upon the level of financial commitment, risk,

Strategic Orientation: This takes into consideration the motivation behind an organization’s partnership with other organizations. This helps other participating organizations to anticipate and respond to the way their partners behave. Under strategic orientation, there are three types of partnerships, namely; opportunistic partnership, resource dependency partnership and stakeholder partnerships (Novick, Morrows & Mays,

When investing some companies may not wish to gain control of another entity (Associates) or may find it difficult to do so, in this case collaboration becomes the best solution (Joint venture), some may wish to gain control and as such operations or a business is purchased as a form of investment (subsidiary).