Home > Glossary > Joint venture

Joint Venture

A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources to achieve a specific goal, often involving the development of a new product, market entry, or shared investment in a project. Each party retains its individual identity but shares the profits, losses, and control of the venture. Joint ventures are commonly used in large-scale projects where the cost, risk, or expertise required is too high for one party to bear alone.

Example

A U.S. technology company and a European automotive manufacturer form a joint venture to develop autonomous vehicle technology, sharing the costs, risks, and profits of the project.

Key points

• A business arrangement where two or more parties pool resources for a specific goal.

• Parties share profits, losses, and control while maintaining separate identities.

• Often used for large-scale projects, market entry, or new product development.

Quick Answers to Curious Questions

Companies form joint ventures to share resources, expertise, and risk in achieving a specific goal that would be difficult or expensive to accomplish alone.

Risks include potential conflicts between partners, uneven contributions, and challenges in aligning goals and management structures.

Joint ventures allow companies to leverage local expertise, share costs, and reduce risks when expanding into new geographical or product markets.