A joint venture is a business collaboration between two or more parties for a specific project or purpose. This partnership allows both parties to combine their resources, expertise and knowledge to achieve a common objective while taking on both the risks and benefits. In a joint venture, each party retains its separate business identity and does not merge into a single entity. The collaboration is typically defined by a contractual agreement outlining the terms and conditions, responsibilities and profit-sharing arrangements.

One of the key advantages of a joint venture is the ability to leverage the strengths of each party involved. By pooling resources, companies can access new markets and distribution networks. This collaboration can also reduce costs and mitigate risks, as the burden of investment and potential losses is shared. Unlike a strategic partnership, which is usually long-term and involves ongoing cooperation, a joint venture is more limited in scope and duration. It is often project-specific and focused on achieving a singular goal while increasing capacity. This makes joint ventures particularly suited for companies looking to explore new opportunities without committing to a long-term partnership.