[Pak Youth] ECO402 GDB #2 idea solutiON

Question:- 

Honda Atlas Pakistan Limited is a joint venture between Honda Motor Company Limited Japan 

and the Atlas Group of Companies, Pakistan. Honda Atlas is an automobile company, producing 

motor cycles as well as cars. What are the benefits for the Honda Atlas Pakistan Limited to 

produce both things jointly?  

Solution:-  

By making a joint Honda Atlas gains the following benifits 

• extend her marketing reach  

• access needed information and resources 

• build credibility with a particular target market 

• access new markets that would be inaccessible without venture 

• Both of them provide the opportunity to gain new capacity and expertise each others 

• Both of them  Allow to enter related businesses or new geographic markets or gain new 

technological knowledge 

• access to greater resources, including specialized staff and technology 

• sharing of risks with a venture partner 

• Make business flexible. For example, a joint venture can have a limited life span and only 

cover part of what you do, thus limiting both your commitment and the business' 

exposure. 

• In the era of divestiture and consolidation, JV¶s offer a creative way for both companies 

to exit from non-core businesses. 

• Both companies can gradually separate a business from the rest of the organization, and 

eventually, sell it to the other parent company. Roughly 80% of all joint ventures end in a 

sale by one partner to the other.  

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