A joint venture refers to a business unit formed by at least two or more parties who share risks, returns, and ownership. The entity creates room for sharing technology among parties alongside reducing the business risk. In addition, the venture helps generate interaction between involved parties, hence leading to the attainment of the desired competitive advantage in the industry. Joint venture stands to be one of the most preferred methods of penetrating the foreign sector.
Sony mobile Inc. is a perfect example of a joint venture formed between Ericsson and Sony. The primary focus of the collective entity was to create a competitive mobile industry that benefits the two firms. The decision was made to counter the influence of Nokia and Motorola firms that had considerable influence. Sony was new and inexperienced in the venture, while Ericsson was still influential in the cell phone industry. Before the incident, Sony had attained a competitive brand image that matched Ericson’s command.
The joint venture helped in in establishment of the most advanced technology in the world. Among the most remarkable advancement brought by the joint venture include enhanced audio capacity and water-proof devices. The collective entity is no longer in the market as Sony acquired Ericson’s largest share, making Sony total control. The partnership was hampered because Ericson had little to bring to the table concerning the mobile phone segment. Besides, the decision-making process was slow due to increased consultation between the two firms. Considering the sluggish demand for Sony’s product in the industry, Sony is significantly determined to thrive in the current fast-growing sectors such as tablets, PCs, and cell phones. This will call for increased investment to attain a considerable competitive advantage in the industry.