Merge and Joint Ventures

Discussion in 'Growing and Managing a Business' started by firstchoicecar, Dec 1, 2011.

  1. firstchoicecar

    firstchoicecar
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    Hi,What do you think about the difference about Merging and Joint ventures in business?
     
  2. ArcSine

    ArcSine
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    A JV is frequently the structure of choice if the asset to be exploited is of a short-lived nature. For example, a local municipality and an events-management company might get together in a JV to plan, build, and operate a carnival which is intended to run for one month. After the rides have been disassembled, the tents taken down, and the gate-money counted, the profits are split and the co-venturers go their separate ways.

    Also, JVs are nice vehicles for long-term, large-scale industrial projects. You might find a local government, a utility company, a plant engineering firm, and two or three large electric wholesalers all together as joint venture co-owners of a hydro-electric dam.

    I once worked with a client who had expertise in resort construction. He formed a JV with a small coastal town which had a nice harbor that was popular with tourists. Along part of this harbor my client built a wharf, some retail shops, a marina, a boat landing, and a restaurant. The town provided the land and the construction funds / financing; my client provided the construction expertise, and afterwards provided the oversight and management of the properties. He and the town shared the profits from this venture.

    Not hard to see how mergers would be inappropriate for any of these preceding scenarios (primarily because of the completely diverse nature of the co-venturers).

    Mergers, on the other hand, are useful for achieving economies of scale when it's a marriage of companies in the same industry. A merger might also be able to exploit some synergies; e.g., one software company has assembled a crackerjack team of engineers, and another software company has a major advantage in terms of a well-developed marketing system. Getting the two strengths together under one roof might create a market-beating combination, and in a much more efficient manner than if either one tried to independently develop its own "complete package" from scratch.
     
  3. Navida

    Navida
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    When two companies get merge then it means they become a one single company and they make one single product by their side to sell in market. but in joint venture, company gets attach with each other but they sell their own products or they make one product with their products combination. For example "Intel" is and other company and "Dell" is another. They bot make a PC to sell in market. It will be called joint venture and they will get profit from their individual product or part in a PC.
     
  4. TisdaleJohn

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    Joint ventures is a good option in the start specially but should have brand name to whom you are gonna do any joint venture.
     
  5. bigmodo

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    Merging is when two companies join as one. Let us take for example HP and Dell merging to become one company. Whilst joint ventures is when two companies reach an agreement on a particular purpose. Take for example, the ppc joint venture between bing and yahoo.
     
  6. firstchoicecar

    firstchoicecar
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    Great, Now I really understand this, Thanks for your replies and examples I really appreciate it.
     

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