Issue Date: 
Monday, February 15, 2016

5 Reasons Why Joint Ventures Fail

Joint ventures are collaborative arrangements where two or more businesses decide to collaborate for a common purpose such as bidding for a tender.
There are many examples of successful Joint Ventures, such as Sony-Ericsson, Virgin Mobile India Limited, Nokia (Siemens AG and Nokia Corp), Cadbury Schweppes PLC Carlyle Group Joint Venture and Chery Jaguar Land Rover Automotive Company. They are all well-known and are very lucrative. But having a Joint Venture does not guarantee success.

There are many reasons why Joint Ventures fail and five of the most common reasons are:
1.    Lack of a proper Joint Venture Agreement. The importance of a proper JV Agreement cannot be emphasized enough. Ensure that you have a proper contract in place that covers the entire foundation of your JV.
2.    Lack of finance. If one of the parties to the Joint Venture is struggling financially it can be the downfall. The simple reason is that the struggling partner will drain the Joint Venture, not allowing the it to build up capital for challenging           times or future expansions.
3.    Control issues. In any relationship you will always find that someone needs to be the leader or the decision maker. A Joint Venture is the same - somebody needs to be in control. Ensure that the correct leadership is appointed. 
4.    Compatibility. Sometimes in the rush of securing a tender a business owner will go into a Joint Venture with another business owner who does not have the same values and ethics. This is a dangerous mistake. Remember that you           have established a certain way of doing business and that you have invested a lot in building the ethics in your business. Ensure that the Joint Venture partner that you sign up with is compatible with your policies of running a                     business. 
5.    Unrealistic expectations. Ensure that all role players are on the same page when it comes to the Joint Venture's successes. There must be clear indicators on the chances of winning a tender and also the expected profits to be                 made after the awarding of a tender and the completion of the tender. All the parties involved must be briefed on the expected profits so that there are no unrealistic expectations from any of the parties involved.

If you tend to these five critical areas in your Joint Venture the chance for it to succeed will increase immensely. 

To learn more about this and many other tender conditions please attend one of our How-to-Tender workshops. For more information on the tender courses please email Werner at werner@how2tender.com

This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd. which specializes in tender consulting and tender training

Title Closing Date Tender No.
Supply and Deliver 1x Pre- Fabricated Laboratory at St Elizabeth Hospital Including all Interior and Exterior Finishes 2018-10-15 11:00 RFB074/ 18- 19
Proposal to plan, design and project manage the refurbishment and upgrading of The Vereeniging Fresh Produce Market (VFPM). 2018-10-12 11:00 GT/ GDARD/ 127/ 2018
Placement or Outright purchase of Dried Blood Spot punch Analyser NICD HIV Sero-Molecular Laboratory for a period of three years 2018-10-15 11:00 RFB080/ 18/ 19
Westcol hereby invite bids from established, registered providers to provide physical security services (guards) to one or more of the following Westcol campuses for a period of 24 months. Krugersdorp; Krugersdorp West; Randfontein; Magaliesburg; Carletonville. 2018-10-12 10:00 WT 2018/ 0003
Placement or Outright Purchase of Film Coverslipper Analyser for NHLS Braamfontein, Doctor Goerge Mukhari Hospital, Chris Hani Baragwanath Hospital and Nioh For a period of three years 2018-10-15 11:00 RFB081/ 18/ 19
Phuthaditjhaba Magistrate Office: Rendering Of Cleaning Services For 24 Months. 2018-10-16 11:00 BL18/ 061
Rendering of travel agency services to the Department of Social Development (excluding MEC & HOD),for a period of 36 months. 2018-10-05 11:00 NC/ SOC/ 013/ 2018
Supply , Delivery and Off-loading of Perishable Provisions for Thohoyandou and Polokwane management areas ( Limpopo Province) 2018-11-06 11:00 LMN 06/ 2018 LIMPOPO
Appointment of service providers to implement The Animal and Veld Management Programme (AVMP) Soil Rehabilitation Projects in Spitskop and Zandmartinsdrift Land Reform Farms in the Edinburg area in Kopanong Local Municipality within Xhariep District Municipality as well as in De Hoop Land Reform Farm in the Bloemfontein area within Mangaung Metro Municipality in the Free State province. 2018-10-05 11:00 PSSC- RID- FS 0004 (2018/ 2019)
Supply, Delivery and Off-loading of Perishable Provisions at Klerksdorp, Rooigrond and Rustenburg Management Areas (North -West Province) 2018-11-06 11:00 LMN 04/ 2018 NORTH - WEST
Appointment of service providers to implement The Animal and Veld Management Programme (AVMP) Soil Rehabilitation Project in Rietfontein Land Reform Farm in the Soutpan area in Masilonyana Local Municipality within Lejweleputswa District Municipality in the Free State province. 2018-10-05 11:00 PSSC- RID- FS 0003 (2018/ 2019)
Supply , Delivery and Off-loading of Perishable Provisions at Barberton ,Bethal and Witbank management areas( Mpumalanga Province) 2018-11-06 11:00 LMN 05/ 2018 MPUMALANGA
Appointment of a service provider to render security guarding services at the Department of Public Service and Administration for a period of two (2) years. 2018-10-12 11:00 DPSA002/ 2018
Provision of Geographical Information Solution (GIS) including maintenance and support services. 2018-10-24 11:00 RFP 29/ 2018
6000 units of emollient bp cream with chlorocresol 500g, or equivalent 2018-10-08 11:00 ZnqLS443/ 18gaz
Butterworth Magistrate: Repairs & Servicing of Air-Conditioners. 2018-10-11 11:00 MTH 59/ 2018
36 units of Dextran 40, 10% in sodium chloride injection iv solution, 0.9% 500ml (Rheomacrodex), or equivalent 2018-10-08 11:00 ZnqLS442/ 18gaz
Drain cleaning and verge maintenance on Road P242, from 0.00KM TO 9.9KM. 2018-09-27 11:00 ZNT373T/ 2/ 4/ CDUR/ 601/ S/ 10/ 2018- 19
Drain cleaning and verge maintenance on main road P100 section 1&2 between chainage 0.00KM to chainage 14.5KM. 2018-09-27 11:00 ZNT373T/ 2/ 4/ CDUR/ 601/ S/ 05/ 2018- 19
Supply and Delivery of Dairy products and Maize Drink to the Gauteng Provincial Government (GPG) Departments and State Information Technology Agency (SITA) for a period of 36 months 2018-10-12 11:00 GT/ GPT/ 126/ 2018

Pages

Advantages and disadvantages of Consortiums

Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

Consortiums Advantages:

  • Easy to establish as there are no formal procedures... Read More
Free Keyword search

Search all tender notices for FREE!

No subscription or registration required!

You can also search by the reference of the the tender.

Advanced search

Search by Issuer, Region or Sector, individually, or using any combination of the three.