3 Reasons Joint Ventures That Keep Evolving Perform Better

We don’t need to tell you how much potential a strong joint venture can hold for the companies involved. The world is brimming with prominent examples of how lucrative they can be, from Microsoft and General Electric to Hulu, a popular video streaming service formed by NBC, Disney, News Corporation and Providence Equity Partners.

But not all joint ventures are created equal, and it’s vital that these partnerships are not marred by complacency. Why? Because ultimately joint ventures are there to give two or more businesses a new edge in a rapidly evolving market – to meet the changing needs of customers, and remain at the forefront of that evolution.

Here are three reasons why staying proactive, and allowing the joint venture to evolve is the best course of action.

1. At least one major restructure can significantly improve your chances of success

This one is backed up by some pretty compelling numbers. According to the Harvard Business Review, a joint venture that goes through a significant restructuring at least once in its lifetime will see financial and operational improvements somewhere in the region of 10%-30%.

Restructuring is, of course, a major upheaval to take on. Even with a strong promise of positive results, it’s not without its own risks. Working with a corporate solicitor, who is best placed to oversee the process of restructuring and offer invaluable insights, will give you the best possible chance of strong results. Take a look at willans.co.uk/service/corporate/ to find out more about how they can help you navigate the world of corporate law.

2. They’re better equipped to face economic downturn

Now more than ever, we’re aware of the acute risk a sudden downturn in the economy can bring to businesses. With the cost-of-living crisis, high inflation, and the looming risk of recession, businesses of all industries – even those that are relatively resilient against economic changes – are working to find ways of coping.

Flexibility and adaptability are, of course, key. What worked in one season won’t work the same in another, and that means that any venture – whether you’re partnering with another business or not – needs to be ready to evolve as quickly as possible.

If you’re too rigid about your joint venture, it may not perform so well 6 months from now, when the lay of the land is different and new challenges are appearing on the horizon.

3. They’re ready for market changes

No market stays exactly the same throughout the months and years. Customer spending habits can be influenced by any number of external factors, from climate change to economic downturn – international health crises to changing trends online.

Joint ventures that are primed and ready to evolve are all the more prepared to meet those changes head-on, and avoid months of prevaricating – or even head-in-the-sand constancy – as other competitors align themselves with the ‘new market’ and pull ahead.

Evolution for the sake of evolution is rarely advisable. It causes disruption to business-as-usual and unsettles employees and customers. But, when the time calls for it, evolution may be just what your joint venture needs in order for you to meet your target.