Define 'joint venture'.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2016). The mark or mark type is shown in brackets.

1. [2] Two or more businesses/people agree to work together (1 mark) on a particular project/product or business enterprise (1 mark) (A distinct business unit/division may be set up or just informal collaborative arrangements).
2. [2] Sound definition given
3. [1] Partial definition (limited understanding)
4. [3] Two advantages for joint ventures soundly explained
5. [2] One advantage soundly explained or two partially explained
6. [1] One advantage partially explained or a list of two
7. Share strengths, minimise risk and increases opportunity for competitive advantage in business ventures.
8. Given access to new resources, markets, or distribution channels.
9. Particularly useful for small businesses wanting to spread risks – e.g. joint advertising, marketing, R&D.
10. Popular way of entering new, emerging markets.
11. May be used by large businesses to shut out the competition.
12. Loyal customers of both companies are likely to purchase the new product or service and the customer base is therefore widened.
13. NB: do not accept economies of scale as an advantage unless it is linked to a new project/service coming out of the new venture.