Disadvantages Of Joint Venture

851 Words 4 Pages
Joint venture- entails establishing a firm that is jointly owned by two or more otherwise independent firms. A joint venture is its own entity, separate and apart, and exists only for a limited time. It can help a business grow faster, increase productivity, and generate greater profits. In order for a joint venture to be successful it must offer access to new markets, increase capacity, share risks and costs with partner, and access to greater resources. The advantages of a joint venture are that companies can make arrangements with other companies to help improve the prospects of both businesses. There must be a joint venture agreement that establishes a purpose, governance structure, and operational rules for the joint venture. The provisions …show more content…
Both parties must sign it. The key benefits of forming a joint venture is that companies can share assets, share critical expertise and experience, share costs, access to new markets, and share risk. There are different ways that companies can set up a joint ventures (a) co-operate with another business in a limited and specific way;(b) set up a separate joint venture business that can be with a new company to handle a particular contract. This option is very flexible since partners can each own shares in the company and agree on how they should be managed; and (c) form a business partnership where business merge together. This …show more content…
who agreed to join News Corp., NBC Universal and Providence equity as a joint venture partner of Hulu. Disney agreed to offer full length episodes of the most popular shows from the ABS network that include “Grey’s Anatomy”, “Desperate Housewives”, “wizards of Waverly place”, “The secret life of the America Teenager” and many others. Along with new episodes it also allowed to provide older shows such as: “Dancing with the stars.” Disney saw the joint venture as a way to reach new audiences without having to go to a website. Hulu ranks as Number 4 in online video sites in the United States with 41.6 million viewers. Hulu allowed Disney shares to rise $1.13 or 5.4% to $22.14 after the announcement. Disent cannot include cable networks such as ABC family and Disney XD since it can put potential risk on cable operators. Disney only wants subscribers to see online versions of cable shows. The components of the agreement included. (a) a two year guarantee of exclusive third party access to ABS’s online TV inventory, and Disney cable shows; (b) marketing money to be spent in promoting Hulu on Disney TV properties. NBC, Disney, and fox handed $50 million each; and (c) a cash investment in Hulu. Hulu LLC, Netflix’s rival agrred to pay more than Netflix and they were fine with episode stacking which helps viewers catch up on episodes and Hulu also agreed to promote current seasons of shows. The goal of Walt Disney Compnay and Huku was to

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