Strategic Joint Venture

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. 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 >>
  4. What is the difference between the equity method and the proportional consolidation ...

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    Learn about some of the ways in which the U.S. government and the Securities and Exchange Commission regulate venture capital. Read Answer >>
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