Joint Ventures (JVs)

● Provide companies with complementary → capabilities and  resources, such as distribution channels, technology, or finance

● Provide companies with the opportunity to obtain new capacity, expertise, and information and → synergize capital, technology, human resources, risks and rewards in a formation of a new entity under shared control

● Allow companies to → offer their customer → new value, new products and services

JV Business Plan  ▪ JV Checklist  ▪ Governing Structure

● Allow companies to save money when businesses share operating, advertising and → marketing costs

● Allow companies to save valuable time when businesses share the workload

● Allow companies to gain new business associates and get referrals from other businesses

● Allow companies to enter into related businesses or new geographic markets or obtain new technological knowledge

● Have a relatively short life span (5-7 years) and therefore do not represent a long-term commitment

Successful JV  ▪ MoU  ▪ Failure Reasons

In the era of divesture and consolidation, offer a → creative way for companies to refocus, exit from non-core businesses: companies can gradually separate a business from the rest of the organization, and ultimately, sell it to the other parent company (appr. 80% of all joint ventures end in a sale by one partner to the other).

Structuring a Strategic Alliance: 10 Questions To Answer

The greatest change in corporate culture – and the way business is being conducted – may be the accelerated growth of relationships based on partnership.

Peter Drucker