Question

Explain the features of a Joint Venture.

Answer 1

Features of Joint ventures are:-

1) Access to advance technology:- When two or more companies join together, there can be access to the latest techniques of production. This will lead to cost reduction and improvement in quality and increased production.

2) Optimum Use of capital:- Joint venture helps in the optimum utilization of capital. There will be the least wastage of capital and other resources.

3) Pooling of resources and expertise:- The resources of two or more companies can be effectively pooled by forming a joint venture. This helps in a large scale production and can avail economics of large scale production and can avail economics of large scale production.

4) Innovation:-It is a highly competitive market. The ideas and technology of two enterprises will help to innovate new ideas and products.

5) Sharing of risk and reward: The Enterprises which join hands to form a joint venture will share the reward in the form of increased profit. The partners in joint ventures have to share the risk that may occur in business.