Strategic Joint Venture


DEFINITION of 'Strategic Joint Venture'

A business agreement between two different companies to work together to achieve specific goals. Unlike a merger or acquisition, a strategic joint venture does not have to be permanent, and it offers companies the benefits of maintaining their independence and identities as individual companies while offsetting one or more weaknesses with another company's strengths.

A strategic joint venture may also be called a "strategic partnership."

BREAKING DOWN 'Strategic Joint Venture'

There are a number of reasons why two companies might choose to enter such an arrangement. Strategic joint ventures allow companies to pursue larger opportunities than they could alone, establish a presence in a foreign country or gain a competitive advantage in a particular market. They can also help companies to lower costs, gain access to another company's technology, increase revenues, increase their customer base or expand product distribution, among other possibilities.

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