When anyone starts a specific business or some type of mega project he needs some assistance and shareholders an equal stake. This JV full form is all about the business strategy. You can say that it is a sharing of business and projects with equal benefits and losses. Business is the kind of exchange of something to get profits in shape of money and this system was operating the world since the stone age of human. In this article we I will demonstrate the full form of JV and guide you with the different strategies of doing business and the main focus will be on Jv
Information about JV Full form
The full form of JV is Joint Venture. It is some type of business organization in which two parties shared their investment, governance and earn equal profits and losses. You can say that two owners of one organization to hold the business well. There are major four reasons due to the companies adopt the method of a Joint venture.
- For the assessment of the new type of markets specifically those markets which required big investments and give big profits and emerge in the public as a new market.
- Companies adopt the method of Joint venture to obtain the maximum efficiency in the project by sharing their different scales and operation facilities. Due to the joining of operations of two firms, there will be maximum positive results obtained in a specific project.
- This method is also being adopted for sharing of investments and losses risks in a specific project. Companies in a joint venture earn the equal or fixed profits and losses after the completion of the projects.
- The major benefit of the joint venture is the access of personal skills and abilities to handle a specific project between two companies because in joint venture two companies join their employee forces and use their efficiency of work for the success of a project in this way project will become a remarkable piece of work.
Joint venture is a program who unite the small and big industries to accomplish a specific project for instance a small company of software has the higher capabilities to make advanced and market based software while other international or multinational company which has the ability to make the best hardware to run that software then they will make a joint venture and complete the project for the accomplishment of that software and avail that software to the public for use. Simply you can say that Joint venture is a partnership of two individuals or companies for completion of a specific project or to do business. It is the best way to combine the investment or resources, to share the expertise about the specific matter and it is the best way to save money and to prevent money losses in the future. Some major joint ventures of the world are Hulu, Sony Ericsson, Miller Coors and Dow Corning. They are the major joint ventures in this present century while Dow Corning was in the past. Now after the full form and some explanation about JV now we discuss some other important aspects about this system.
Processes Include in the JV
There are different processes are involved when two companies think to enter in a joint venture program and these processes are necessary to do for a successful project completion. Every step has a significant importance regarding the joint venture. Important processes are given below with a brief demonstration.
1- Business Strategy
The first process in a joint venture is to make a business strategy which is better for both parties and should be according to the law and regulations of the market. It should have an innovative idea so the project will perform better than other companies in the competition.
2- Decision about JV
As the full form of JV described that it is a venture (both have the same losses risks and profits). This is the main step to choose whether your project needs a joint venture or it will be better in a single acquisition. If your company has enough resources that it can meet the initial requirements of the project and you have enough experienced employees to get the project done then you have can run your project without the JV but often companies lack some expertise regarding specific projects so this is the major step to determine that whether your company needs a joint venture or not. There are many benefits to go in a venture while going alone for mega projects will be more risky than in venture.
3- Screening of JV Partner
This step has a significant importance because if your partner in the venture has some previous reputation regarding the projects and you have selected that partner it will put some great impact on your project. Selection of partner will be a more important decision because it will decide the fate of your project and its success in the future. Your partner in the venture should have expertise in that particular project. Some other considerations have also been followed by the screeners.
Once you have selected your partner in the venture you have to make some paperwork regarding the different deals. These deals are about the investments schemes, governance strategies, operating of different departments inside a project. The hiring of some experienced persons and many more things have to buy both companies in terms of dealing. Dealing is also about the profits and risk issues.
5- Terms and Conditions about the Project
When a project started by both companies in a venture then before the starting of a project there will be a chapter of terms and conditions upon which either companies or partner in that specific venture have to agree upon some conditions proposed by the partners.
6- Launch of Joint Venture
When all the dealings are done by both partners in that venture then the launching of that project and venture will proceed. This step has the place after all the dealings, selection procedure regarding the project.
When the specific purpose of a venture has completed then the terminating of that venture comes into exists according to terms and conditions decided earlier.