A joint venture is a certain form of a cooperation where the collaborating organizations bring a part of their capacity into a new company, and develop a new project where the involved companies share all the risks.
The participating companies are together the owner of the joint venture and are sharing both the profits and losses. A joint venture is not the same as a merger, as many people tend to think. Unlike a merger, the participating companies in a joint venture continue to exist independently.
To explain the way a joint venture works, we take Senseo as an example. Senseo is a joint venture from Douwe Egberts and Philips. Douwe Egberts provides the coffee and Philips provides the coffee machines. The benefits of their cooperation are their combined knowledge, more capacity and spreading the risk of huge losses. Other examples of joint ventures are Sony Ericsson between Sony and Ericsson, Auto Alliance International between Ford Motor Company and Mazda and the Post Office between PostNL and ING Bank.