What is a '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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RELATED FAQS
  1. What are the primary advantages of forming a joint venture?

    Learn how the advantages of entering into a joint venture make the business strategy an alternative to mergers and acquisitions ... Read Answer >>
  2. What are the primary disadvantages of forming a joint venture?

    Learn the disadvantages to forming and maintaining a joint venture partnership, including factors business owners should ... Read Answer >>
  3. Do joint ventures need an exit strategy?

    Understand why an exit strategy is important for a business partnership such as a joint venture, and learn the options partners ... Read Answer >>
  4. How are joint ventures regulated in the United States?

    Learn how joint ventures are governed in the United States, and discover why tort law is so important for upholding the contracts ... Read Answer >>
  5. What is the difference between the equity method and the proportional consolidation ...

    Discover the differences between the equity method and the proportional consolidation method of joint venture accounting, ... Read Answer >>
  6. What's the difference between general, limited and joined venture partnerships?

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