EDUCBA

EDUCBA

MENUMENU
  • Free Tutorials
  • Free Courses
  • Certification Courses
  • 250+ Courses All in One Bundle
  • Login
Home Finance Finance Resources Investment Banking Basics Joint Venture vs Strategic Alliance
Secondary Sidebar
Finance Blog
  • Investment Banking Basics
    • Trust Fund
    • Short Sale in Real Estate
    • How to Invest in Stocks
    • Penetration Pricing Strategy
    • S Corporation
    • Special Purpose Entity
    • Wholesale Price Index
    • Hyperinflation
    • Stagflation
    • Capital Structure
    • Pecking Order Theory
    • Private Placement of Shares
    • What is Stock Market
    • Pyramid Scheme
    • Introduction to Stock Market
    • Fiscal Policy
    • Trust Account
    • Zombie Company
    • Aggregate Demand (AD)
    • Aggregate Supply
    • Diluted EPS
    • Limited Partnership
    • Leveraged Finance
    • Liquidation
    • Holding Company
    • Kickback
    • Kiting
    • Financial Instrument
    • Finance Charge
    • Free Cash Flow to Firm Formula
    • Personal Income
    • Enterprise Value
    • Joint Liability
    • Return on Average Equity
    • Factor Models
    • Beta in Finance
    • Leverage Ratio
    • Investment Partnership
    • Banker??s Acceptance
    • Internal Sources of Finance
    • Insolvency
    • Intercreditor Agreement
    • Forfaiting
    • Debt Restructuring
    • How to Buy Shares?
    • Indenture
    • Incumbency Certificate
    • In House Financing
    • Independent Director
    • Insourcing
    • Holding Company Examples
    • How to Get Into Project Finance
    • How to Manage Your Money
    • Finance vs Consulting
    • Agency Problem
    • Article of Association
    • Career and Scope After B.Com
    • Capital Rationing
    • Financial Guarantee
    • Corporate Governance
    • FHA Loan
    • Fannie Mae
    • Financial Market
    • Fixed Capital
    • Fixed Rate Mortgage
    • Foreign Corrupt Practices Act
    • Foreign Investment
    • Finance vs Marketing
    • Functions of Financial Markets
    • Grace Period
    • Gift of Equity
    • Greenwashing
    • Hard Money Loan
    • CFO Job Description
    • Corporate Finance vs Investment Banking
    • Corporate Finance vs Project Finance
    • Career After BFM/BAF
    • Form S-8
    • Market Cap vs Enterprise Value
    • Quantitative Analyst Career
    • Leveraged Buyout Model
    • Mistakes in Discounted Cash Flow
    • LBO Analysis
    • Golden Handshake
    • Asset Management Company?
    • Private Placement?
    • Marking to Market?
    • Horizontal Merger
    • Special Purpose Vehicle
    • What is Investment Banking?
    • Spin off vs Split off
    • Vertical Merger
    • Merger and Acquisition Process
    • Conglomerate
    • Horizontal Merger Examples
    • Amalgamation
    • LBO Financing
    • Types of Joint Venture
    • Merger
    • Acquisition
    • Greenmail
    • Reverse Merger
    • Sandbagging
    • Pac Man Defense
    • Backward Integration
    • Poison Pills
    • Green Shoe Option
    • Hostile Takeover
    • Forward Integration
    • Acquisition Financing
    • Types of Acquisition
    • Project Budgeting Template
    • Commercial Bank vs Investment Bank
    • Private Equity vs Venture Capital
    • Degree of Operating Leverage
    • Sales and Trading
    • Revenue Recognition Principle
    • Hedge Fund Strategies
    • Merger Examples
    • Vertical Integration Example
    • Vertical Merger Example
    • Financial Markets
    • Equity Examples
    • Biggest IPO's in History
    • Cross Border Merger and Acquisitions
    • Leverage Buyout
    • Mergers and Acquisitions in India
    • Project Financing in India
    • Investment Banking for Dummies
    • Equity Research Report Rules
    • Mergers and Acquisition in 2013
    • Investment Banking Band Chart
    • IPO For Investors
    • Yield Spread
    • Angel Investor vs Venture Capital
    • CFA vs CA
    • Merger vs Amalgamation
    • Joint Venture vs Strategic Alliance
    • Carees in Banking Exams
    • Facebook IPO
  • Accounting fundamentals (700+)
  • Asset Management Tutorial (200+)
  • Banking (44+)
  • Corporate Finance Basics (373+)
  • Credit Research Fundamentals (6+)
  • Economics (88+)
  • Finance Formula (386+)
  • Financial Modeling in Excel (17+)
  • Investment Banking Careers (29+)
  • Trading for dummies (69+)
  • valuation basics (27+)
  • Insurance Resources (14+)
  • Top Finance Books (7+)
Finance Blog Courses
  • Investment Banking Course
  • Mergers & Acquisition Course
  • Financial Modeling Course

Joint Venture vs Strategic Alliance

By Madhuri ThakurMadhuri Thakur

Joint Ventur vs Strategic Alliance

Difference Between Joint Venture vs Strategic Alliance

A joint venture is an agreement between two or more parties who agree to pool their resources for the accomplishment of certain activity or task. A joint venture is an agreement between two parties for certain types of work and for a certain period of time. A strategic alliance where two different parties come together and share their resources to undertake a specific, mutually desirable project. In a strategic alliance, both parties come with resources and from a new company. In strategic business both the company maintains its autonomy while gaining a new opportunity.

In a joint venture both the parties come together for a specific purpose or for the new project or any other new business. In joint each party is responsible for profit & losses and the cost associated with it. The strategic alliance allows two organizations, individuals, other entities to work toward the common or correlating goal. A strategic alliance is for benefit of all the parties involved and it can be for the short term and the long term both. The agreement in a strategic alliance can be formal or informal but each party’s responsibilities must be clear. So both joint venture vs strategic alliance term has its own importance in the field of business and big corporations. Joint ventures and strategic alliances have a vital role in the perspective of a business.

Start Your Free Investment Banking Course

Download Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others

Head To Head Comparison Between Joint Venture vs Strategic Alliance (Infographics)

Below is the top 11 difference between Joint Venture vs Strategic Alliance

Joint Ventur vs Strategic Alliance (info)

Key Differences Between Joint Venture vs Strategic Alliance

Both Joint Venture vs Strategic Alliance are popular choices in the market; let us discuss some of the major differences :

  • A joint venture is basically contracting between two or more parties agree to pool their resource for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. On the other hand strategic alliance is an arrangement between two parties that have decided to share their resources to undertake a specific, mutually beneficial activity.
  • In a joint venture, each of the participants is responsible for the profit, loss, and cost associated with the particular project for which they come together. A strategic alliance is less involved and less binding than a joint venture.
  • A joint venture needs a contract agreement between two or more parties with all the descriptions about a share of profit and loss etc. On the other hand, there is May or may not be needed for a contract agreement between two or more parties. There is a risk of a trust relationship.
  • Although they are having a partnership agreement which can be the colloquial sense of the word, the joint venture can take any legal structure. Corporation, partnership, limited liability is some of the function of a joint venture. Let’s talk about the strategic alliance in which two parties come together for achieving a common goal or objective. The strategic alliance allows the involved organizations to pursue the opportunity at a faster rate than if an organization functions alone.
  • The joint venture allows to share resources of both parties for accomplishing the goal at a faster rate and move on to another contract, so in a joint venture, people come together for specific work, after completion of work they share the profit and finish the contract.
  • A strategic alliance provides access to additional information, knowledge, and resources owned by the other party.
  • In a joint venture contract, all thing is taken care of like how much each party contributes, a structure of JV. On the other hand, there is no existence for such a contract but they use the resources of either party for achieving a common goal.

Joint Venture vs Strategic Alliance Comparison Table

Below is the 11 topmost comparison between Joint Venture vs Strategic Alliance

The Basic comparison  Joint Venture Strategic Alliance
Meaning A Joint venture is a form of business organization, set up by two or more business organizations for the purpose of carrying out a particular task or business activity. A strategic alliance implies an agreement between two or more entities to work jointly with one another to increase the performance of both parties.
Independent organization The independent entities come together in a joint venture. Do not operate as independent companies. The two more companies come together in a strategic alliance, continue to operate as separate and independent companies.
Contract In a joint venture, there is a need for a contract so a contract exists in a joint venture. In a strategic alliance, there may or may not be a contract.
From of Strategic alliance Collaboration or corporate partnering
Separate legal entity A joint venture is a separate legal entity A strategic alliance is not a separate legal entity
Objective In a joint venture is a risk is limited. In a strategic alliance, the reward is maximized.
Management In joint venture management is bilateral. In a strategic alliance, management is delegated.
Resources In joint venture resources include massive leverage, lower risk, and optimum utilization of resources. In strategic alliance resources include product, knowledge, expertise, goodwill, capital, etc.
Part The joint venture is a complicated part of a strategic alliance. A strategic alliance is itself an alliance of two different businesses.
Duration Joint venture duration is of the short term only maybe 1 year to 5 years. Strategic alliance duration can be long term or short term depends upon the need of time.
Risk In a joint venture, there is and limited risk to parties involved in the agreement. In a strategic alliance, there are chances for higher risk due to the trust relationship between two parties, because there is may or may not contract.

Conclusion

Joint venture vs strategic allegiance both term has a vital role in the field of business. The company that wants to do proper use of available resources can go for either of them. A strategic alliance needs a proper understanding between the parties involved. A joint venture has a legal contract so there is no misunderstanding issue. But both the term having importance in the field of business.

To complete work in less time, one can go for a joint venture because with the help of two parties the work can be completed even faster. For accomplishing a common goal of a company or business one can go for strategic allegiance as per the need. So both joint venture vs strategic alliance has their own importance as per the business need. If a company working on infrastructure then they may go for a joint venture.

Recommended Articles

This has been a guide to the top difference between Joint Venture vs Strategic Alliance. Here we also discuss the Joint Venture vs Strategic Alliance key differences with infographics, and comparison table. You may also have a look at the following articles to learn more

  1. Asset Purchase vs Stock Purchase 
  2. Present Value vs Net Present Value 
  3. E-Commerce vs E-Business
  4. Investment and savings
Popular Course in this category
All in One Financial Analyst Bundle- 250+ Courses, 40+ Projects
  250+ Online Courses |  1000+ Hours |  Verifiable Certificates |  Lifetime Access
4.9
Price

View Course

Related Courses

All in One Financial Analyst Bundle(250+ Courses, 40+ Projects)
Financial ModelingInvestment BankingUS GAAPCFA-Level 1 & 2
Equity ResearchM & A ModelingPrivate Equity ModelingForex Trading
Price
View Courses
250+ Online Courses | 40+ Projects | 1000+ Hours | Verifiable Certificates | Lifetime Access
4.9 (86,088 ratings)
Investment Banking Course (123 Courses, 25+ Projects)4.9
Mergers & Acquisition Course (with M&A Projects)4.8
Financial Modeling Course (7 Courses, 14 Projects)4.7
0 Shares
Share
Tweet
Share
Primary Sidebar
Footer
About Us
  • Blog
  • Who is EDUCBA?
  • Sign Up
  • Live Classes
  • Corporate Training
  • Certificate from Top Institutions
  • Contact Us
  • Verifiable Certificate
  • Reviews
  • Terms and Conditions
  • Privacy Policy
  •  
Apps
  • iPhone & iPad
  • Android
Resources
  • Free Courses
  • Investment Banking Jobs Offer
  • Finance Formula
  • All Tutorials
Certification Courses
  • All Courses
  • Financial Analyst All in One Bundle
  • Investment Banking Training
  • Financial Modeling Course
  • Equity Research Course
  • Private Equity Training Course
  • Business Valuation Course
  • Mergers and Acquisitions Course

ISO 10004:2018 & ISO 9001:2015 Certified

© 2022 - EDUCBA. ALL RIGHTS RESERVED. THE CERTIFICATION NAMES ARE THE TRADEMARKS OF THEIR RESPECTIVE OWNERS.

EDUCBA
Free Financial Modeling Course

3 Statement Model Creation, Revenue Forecasting, Supporting Schedule Building, & others

*Please provide your correct email id. Login details for this Free course will be emailed to you

By signing up, you agree to our Terms of Use and Privacy Policy.

EDUCBA Login

Forgot Password?

By signing up, you agree to our Terms of Use and Privacy Policy.

EDUCBA
Free Investment Banking Course

Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others

*Please provide your correct email id. Login details for this Free course will be emailed to you

By signing up, you agree to our Terms of Use and Privacy Policy.

EDUCBA

*Please provide your correct email id. Login details for this Free course will be emailed to you

By signing up, you agree to our Terms of Use and Privacy Policy.

Let’s Get Started

By signing up, you agree to our Terms of Use and Privacy Policy.

This website or its third-party tools use cookies, which are necessary to its functioning and required to achieve the purposes illustrated in the cookie policy. By closing this banner, scrolling this page, clicking a link or continuing to browse otherwise, you agree to our Privacy Policy

Loading . . .
Quiz
Question:

Answer:

Quiz Result
Total QuestionsCorrect AnswersWrong AnswersPercentage

Explore 1000+ varieties of Mock tests View more