There are three main types of strategic partnerships between companies:

1. Equity Joint Venture, for co-investment. It implies the creation of a new company, with its own legal personality and differentiated from its creators. The capital may be divided equally among the partners or there may be a reference partner with majority capital.

2. Non-equity Joint Venture Contractual. In it, the companies agree to collaborate for a common activity, but for this they do not constitute an independent company but all aspects of the agreement are regulated by contract.

3. Joint Venture of strategic alliances. In this case, the parties make the agreed resources available to the alliance so that the parties can achieve the objectives for which it was created. It does not therefore require the monetary contribution of the partners.

These partnerships generally have one of these goals:

– Access to new international markets
– Access to new product segment (for a third country or for subsequent importation)

The benefits of this type of partnership are multiple and generally of high interest to both parties:

• To cover new markets
• Save time in the commercial development of a geographical area
• Develop new products with characteristics that are difficult to grasp, due to costs or quality
• Boost brand image
• Leverage the know-how of one of the parties
• Sharing the risks and costs of operation, advertising, marketing…
• Produce more efficient competition
• Have access to a larger network of suppliers and distributors…

However, there are a series of pitfalls and difficulties that tend to slow down the undertaking of this type of strategic solutions:

• Possible risks of conflicts of interest between the parties
• The complementarity of tasks
• Dependence on the partner for important decisions
• Adaptation to a different culture or to unknown markets by one of the parties
• Poor integration and communication between partners…

The success of a strategic alliance between several companies lies in a deep knowledge of the business they are going to develop and in the leadership capacity of their main executives. Having a trusted partner with experience in these scenarios is critical to taking the plunge successfully.

The Dredex team has extensive experience in the internationalization of the production of European companies in Asia, South America, the Middle East and Eastern European countries, through the creation of Equity Joint-ventures. This experience allows him to guide the parties and successfully execute international collaborative projects in which various aspects must be defined and developed that will ultimately determine the achievement of the objectives: