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Consortium - Explained

What is a Consortium?

Written by Jason Gordon

Updated at April 7th, 2022

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Table of Contents

What is a Consortium?Consortia vs. Joint Ventures

What is a Consortium?

A consortium is realized when two or more firms, governments, households, or individuals come together to participate towards the same objective. The participants often pool their resources together in this pursuit. Consortia are common when such projects are beyond what a single firm, individual or government can execute. 

Consortia are often formed for non-profit purposes, although, there are some exceptions. Consortia are often formed in the educational sector, this is where several universities and educational institutions pool financial resources, research and theses materials, professors, and other knowledge-based materials to achieve a common educational goal.

Back to: STRATEGY & PLANNING

Consortia vs. Joint Ventures

Consortia are different from joint ventures. When two or more firms or enterprises come together to form a joint venture, they share the ownership of the venture which means all the profits and risks of the venture are shared equally among the participants. Businesses in a joint venture also work together and they all participate in the governance, risks, and losses of the venture. In a consortium, however, two or more companies pool their resources together for a common goal, which is often short-termed. The day-to-day operations of the firms that make up the consortium are run independently as these are not part of the agreement for the consortium.

Related Topics Strategy

  • Organizational Strategies
  • Growth-Based (Expansion) Strategies
  • Inorganic Growth
  • Organic Growth
  • Diversification
  • Concentration
  • Integration or Combination (Horizontal and Vertical)
  • Asset Acquisition Strategy Definition
  • Horizontal Integration - Explained
  • Backward Integration - Explained
  • Internationalization
  • Cooperative Strategy
  • Consortium Definition
  • Stability and Retrenchment Strategies

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