Question

Name the enterprise which is the result of partnership between two companies. Why do two companies join together to work as one enterprise?

Answer 1

The enterprise which is the result of partnership between two companies is known as Joint Venture. Eg: Hero Honda(hero an indian company and honda a japanese company)

The benefits of a Joint Venture are:

• Expenses and costs are shared by the companies.
• The initial start-up capital can be borne by both the companies thus lowering the financial burden placed on them.
• If both companies belong to different countries or marketplaces in general, it helps in new market penetration and widens the distribution network.
• Both the companies gain from the technology and services already in use by the companies, This eliminates the hassle of adapting and learning new technologies.
• The companies are free to carry on their own business after the need of the Joint Venture is fulfilled. This means that there is flexibility in operations.
• The customers can use each other's customer base in order to market the products of the Joint Venture.