Global enterprises, joint ventures and PPP

Global enterprises, or multinational corporations (MNCs), are huge firms that work in many countries. Coca-Cola and Sony are famous examples, and some Indian groups such as Tata now work in many countries too. Their features:

• Huge capital, and the ability to raise more anywhere.
• Foreign collaboration with local firms.
• Advanced technology and product innovation, through big research budgets.
• Strong marketing and well-known brands.
• Expansion of market territory across many countries.
• Centralised control: branches in each country work within broad policies set centrally.

A joint venture is when two or more businesses pool their resources and expertise to reach a particular goal, sharing the risks and rewards. Maruti Suzuki began this way: an Indian company joined hands with Japan's Suzuki.

Joint ventures are of two kinds:

• Contractual: no new business is created; the partners only sign an agreement to work together. A franchise is a common example.
• Equity-based: the partners create a new, jointly owned entity, and each owns part of it.

Benefits of a joint venture: increased resources and capacity; access to new markets and distribution networks; access to technology; innovation; low cost of production, as foreign partners can make goods more cheaply in India; and an established brand name that customers already trust.

A public private partnership (PPP) is a different kind of partnership: the government and a private partner share a project, usually to build infrastructure such as a highway, a power plant or a water supply. The work, the obligations and the risks are divided between them, each taking what it handles best. The Kundli Manesar Expressway near Delhi was built in this way.