The UK is something of a mecca for small businesses and for business growth, being a global financial centre with a domestic business policy that has enabled 5.5 million small businesses to develop and thrive.
Not all businesses, though, are lucky enough to survive on their own. Indeed, the UK’s industrial strength often comes from collaboration and symbiosis, as opposed to straight competition.
If you as a business leader find your own business floundering in an understandably-difficult economic environment, this may be a sign that you need to take a new take. Given that there’s strength in numbers, one potential direction could be a joint venture. But what might this look like?
What is a joint venture?
For the unfamiliar, a joint venture describes some form of mutual arrangement between two distinct businesses or enterprises. The two entities effectively collaborate on a new project or plan, which incorporates the strengths of each entity’s branding, expertise or experience. Joint ventures can be powerful ways to regain control of certain areas of a market, re-establish presence as a brand or simply make a profit where a gap has been detected.
Joint venture arrangements are, naturally, sticky business for larger-scale businesses. Even in the spirit of collaboration, there can be hairy legal issues arising from misunderstandings over intellectual copyright, initial terms in a contract or revenue splits. For this reason, corporate lawyers form an integral part of the joint venture process. Joint ventures may sound like a complex endeavour, but the results and impacts can be well worth the work – as demonstrated by these strong examples of successful joint ventures by global brands and businesses.
Deutsche Telekom, Orange, Telefónica, and Vodafone
Deutsche Telekom, Orange, Telefónica, and Vodafone are all telecommunications organisations, providing digital services in the form of phone contracts and internet access to different regions globally. Vodaphone began work on a separate ad-tech project, designed to put customers first regarding marketing communications and data sharing by advertisers; the project soon became an equal-partners joint venture, which will now reach more consumers and benefit from the combined power of four multinational corporations.
Spotify and Hulu
Spotify and Hulu are both streaming giants, in one form or another. Spotify has more or less cornered the market for music streaming, while Hulu offers a tight package of TV and film content as a competitor to Netflix. In 2018, the two platforms came together with a joint venture in the form of a bundle deal; Spotify Premium subscription-holders could now also access Hulu for free. Not only did this spur new subscribers looking to benefit from a better deal, but it also expanded Hulu’s reach, and gave both a competitive advantage.
Nestle and PAI Partners
Nestlé is a household name, best known for its confectioneries but also a fast-food powerhouse with a wide range of frozen pizza brands (amongst others) to its name. These pizza brands inspired a joint venture with private equity firm PAI Partners, whose expertise in business development and food brand management works well with Nestle’s food production pipelines and processes.
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Three Examples of Successful Joint Ventures Around the World