"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

 

Common Reasons for Joint Venture Difficulties

 

 

References:

1. Joint Ventures: Minimizing Risk and Maximizing Success, Hewitt

2. Joint Ventures Revealed, PlugInForProfit

 

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

  • 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

  • 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)