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<\/a><\/p>\nTable of Contents<\/strong><\/p>\n <\/a> <\/p>\n <\/strong><\/p>\n Take BMW and Brilliance Auto Group, for example. They partnered to produce BMW vehicles in China, helping BMW expand in a highly regulated market while Brilliance gained access to BMW\u2019s engineering expertise.<\/p>\n Or, Google and NASA \u2014 collaborating on AI and quantum computing at NASA\u2019s Ames Research Center to push space exploration and data analysis forward.<\/p>\n Every joint venture is built on a contract that spells out how things work. Think: Who\u2019s contributing what, how decisions get made, and how profits (or losses) are split. Some agreements are simple, just covering the basics, while others go deep into financing structures and decision-making authority.<\/p>\n Pro tip: <\/strong>I\u2019ve learned that clear governance is everything. Who has the final say? How will disputes be handled? Sorting these out upfront keeps things running smoothly and avoids unnecessary power struggles.<\/p>\n When growth feels risky, I get why companies look at joint ventures as the smarter bet. Instead of taking on the cost and complexity of a full acquisition or building from the ground up, they team up simply because it\u2019s just more practical at times.<\/p>\n Right now, 60% of companies<\/a> say JVs hold up better in economic downturns, and 58% see them as a safer bet than mergers and acquisitions (M&A), especially given today\u2019s geopolitical climate. And I see the appeal.<\/p>\n A strong JV can help businesses:<\/p>\n It\u2019s less about ownership and more about strategic advantage \u2014 because the right partnership can get you further faster.<\/p>\n <\/a> <\/p>\n <\/strong><\/p>\n I\u2019ve seen joint ventures work wonders when done right. They help businesses cut costs, boost efficiency, and share risks. But not all joint ventures are created equal. There are four main types.<\/p>\n A project-based joint venture has two or more parties working on a specific project. This agreement is usually temporary, lasting until the project\u2019s completion.<\/p>\n One of my favorite examples? NASA and Boeing<\/a> teaming up to develop a new type of sustainable airplane, the X-66. NASA\u2019s goal<\/a> is to reach net-zero carbon emissions in aviation by 2050, and developing the X-66 with Boeing is the first important step in this project.<\/p>\n Project-based joint ventures can also include:<\/p>\n Pro tip: <\/strong>I always recommend doing some deep due diligence before committing. Make sure you and your potential partner align on company culture, decision-making, and operational capacity. Misalignment here can be a dealbreaker later. Use HubSpot\u2019s Free Business Startup Kit<\/a> to align you and your cofounder\u2019s vision \u2014 and even pitch your new venture to investors.<\/p>\n A functional-based joint venture is a long-term collaboration where two or more parties share resources to support each other\u2019s operations. Unlike project-based ventures, this one keeps going as long as it works for both sides.<\/p>\n Say I own a bakery. To expand my reach, I might partner with a local coffee shop. They sell my pastries, I promote their coffee beans, and suddenly, we\u2019re both growing.<\/p>\n Microsoft and OpenAI<\/a>, for example, began working together in 2023. Microsoft provides cloud computing infrastructure through Azure while OpenAI develops AI models that Microsoft has exclusive access to. They share the revenue they jointly produce and plan to expand their partnership with new projects in 2025.<\/p>\n Source<\/em><\/a><\/p>\n A vertical joint venture takes place between buyers and suppliers \u2014 usually when a traditional supplier-buyer relationship doesn\u2019t maximize benefits. This type of joint venture helps create economies of scale and cut costs for both parties.<\/p>\n One recent example I found fascinating was Honda and LG Energy Solutions<\/a> investing $4.4B in an Ohio battery plant. Honda gets a steady supply of high-quality battery modules, while LG secures a long-term manufacturing partner.<\/p>\n A horizontal joint venture happens when two companies in the same industry team up to gain a competitive edge. The twist? They may also be competitors.<\/p>\n For instance, semiconductor producers Intel and UMC<\/a> formed a joint venture in 2024 to collaborate on advanced chip production. They are at the same level of the industry but Intel provides cutting-edge chip design expertise and access to U.S. government incentives (e.g., CHIPS Act funding) while UMC, a Taiwanese company, provides manufacturing expertise in mature node production, helping Intel scale up older chip manufacturing. Moreover, this international partnership aims to help avoid future supply chain disruptions.<\/p>\n Pro tip:<\/strong> I can\u2019t stress this enough \u2014 clear, frequent communication is non-negotiable in a joint venture, especially when working with a competitor. Transparency builds trust, and trust keeps the partnership running smoothly.<\/p>\n <\/a> <\/p>\n In early 2025, Telstra joined forces with Accenture<\/a> in a seven-year venture to push AI and data transformation forward \u2014 fast. The goal? To embed AI deep into Telstra\u2019s systems, improving network performance, customer experience, and efficiency across the board.<\/p>\n Source<\/em><\/a><\/p>\n With Accenture\u2019s AI expertise, Telstra gets access to cutting-edge tools and a stronger data infrastructure. Meanwhile, Accenture locks in a major telecom client, helping shape the AI-driven future of one of Australia\u2019s biggest providers. For Telstra, this means faster automation and smarter systems. For Accenture, it\u2019s a proving ground for its AI innovations.<\/p>\n By March 2025, Mitsubishi Corporation and Nissan are rolling out a joint venture<\/a> aimed at two big things: making autonomous driving more practical and turning EV batteries into scalable energy storage.<\/p>\n Nissan brings the EV and self-driving expertise, while Mitsubishi taps into its massive business network to commercialize these innovations in the market. Beyond an auto partnership, I see this as a bold move to tackle real-world problems, from urban congestion to sustainable energy storage.<\/p>\n Volkswagen and Rivian made it official<\/a> in late 2024, forming \u201cRivian and VW Group Technology, LLC\u201d \u2014 a venture dedicated to developing next-gen EV software and electrical architecture, with the first models slated to roll out in 2027.<\/p>\n Source<\/em><\/a><\/p>\n For Volkswagen, this means access to Rivian\u2019s cutting-edge tech to accelerate its EV roadmap. For Rivian, it\u2019s deep-pocketed support to expand its technology across more vehicles. With up to $5.8 billion on the table, this deal focuses on making EVs more accessible, affordable, and packed with smarter software.<\/p>\n At its core, this is a win-win: Volkswagen picks up the pace in the EV race, and Rivian cements itself as a leader in automotive tech.<\/p>\n <\/a> <\/p>\n I\u2019ve seen joint ventures unlock incredible opportunities \u2014 new markets, fresh expertise, and access to resources that would\u2019ve been out of reach solo. But they\u2019re not without their challenges.<\/p>\n Here\u2019s why I\u2019d consider a joint venture:<\/strong><\/p>\n Here are some reasons I may not:<\/strong><\/p>\n <\/a> <\/p>\n Joint ventures<\/a> can be a smart way to grow a business, but they\u2019re not always the right fit. If you\u2019re weighing your options, I recommend considering the following alternatives as well.<\/p>\n Strategic alliances are agreements between two or more companies that involve sharing resources, such as technology or personnel, to achieve a shared goal.<\/p>\n I like to think of a strategic alliance as teaming up without tying the knot. The key difference from a joint venture? You don\u2019t have to create a new legal entity. Each company stays independent while working together, which makes this a more flexible option if you want the benefits of collaboration without giving up control.<\/p>\n A partnership<\/a> is a formal agreement between two or more people to run a business together. It comes with some big perks \u2014 shared profits, access to more capital, and a bigger network \u2014 but it also requires trust. If one partner decides to leave, things can get complicated fast.<\/p>\n\n
Why Companies Form Joint Ventures<\/strong><\/h3>\n
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1. Project-Based Joint Venture<\/strong><\/h3>\n
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2. Functional-Based Joint Venture<\/strong><\/h3>\n
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<\/p>\n3. Vertical Joint Venture<\/strong><\/h3>\n
4. Horizontal Joint Venture<\/strong><\/h3>\n
Joint Venture Examples<\/strong><\/h2>\n
Telstra and Accenture<\/strong><\/h3>\n
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<\/p>\nMitsubishi Corporation and Nissan<\/strong><\/h3>\n
Volkswagen and Rivian<\/strong><\/h3>\n
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<\/p>\nThe Advantages and Disadvantages of a Joint Venture<\/strong><\/h2>\n
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Joint Venture Alternatives<\/strong><\/h2>\n
Strategic Alliances<\/strong><\/h3>\n
Partnerships<\/strong><\/h3>\n
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