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.

Learn to earn

www.how2tender.com

Title Closing Date Tender No.
Supply: Capacity Building- Ward 33 Seniors Event: Cooler bag and mugs 2018-02-26 12:00 GL11800575
Appointment of an environmental consultant to execute an Environmental Impact Assessment (EIA) process for the proposed Vryburg Agri-Hub, situated in Commonage ERF506 Camp G in Naledi Local Municipality under Dr Ruth Segomotsi Mompati District Municipality in the North West Province 2018-03-01 11:00 NW-TEN 02 (008) 17/18
Request for proposals for production of a documentary video on illegal, unregulated and unreported fishing in Africa 2018-03-23 15:00 AUC/IED/119
Appointment of a service provider to provide a registry service to the Events Department from date of commencement not exceeding 1 year. 2018-02-27 12:00 SL11800155
Request for expressions of interest (EOI): Medical Insurance Coverage for African Union contract staff and their dependents 2018-03-15 15:00 AUC/HRM/NC/1
Supply Central 3 Career Expo Promotional Item – Drawstring bag 2018-02-27 12:00 GL11800577
Appointment of service providers to form a bodyshop of service providers to assist the Department of Rural Development and Land Reform with Complex Forensic Investigations for a period of two years 2018-03-01 11:00 5/2/2/1 – RDLR 0144(2017/2018)
Supply Two seater couch And one seater couch 2018-02-26 12:00 GL11800578
Appointment of a service provider to supply and deliver a refrigerated delivery truck for Witzenberg Agri Park Logistics Project in the Cape Winelands District Municipality in the Western Cape Province 2018-03-01 11:00 SSC WC 12 (2017/2018) DRDLR
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Appointment of a Service Provider to Procure Through Normal Supply Chain Processes an Office Container for Witzenberg Agri Park Logistics Project in the Cape Winelands District Municipality, Western Cape Province 2018-03-03 11:00 SSC WC 16 (2017/2018) DRDLR
Leasing of the remaining extent of portion of the farm Kameelbult 604 IO and portion 9 of the farm Doornbult 603 IO, measuring 638, 7546 hectares in extent, made up of 354 hectares of dry land, 16 hectares irrigation and 266, 7546 hectares of grazing land, for a period of thirty (30) years 2018-03-06 11:00 NWPSSC 01 (091) 2017/18
MBDA hereby wishes to invite suitably, qualified and experienced service providers to provide Developmental Consulting Services to the Agency. 2018-02-26 11:00 BDA0218520
MBDA seeks quotes from accredited service providers to supply and deliver: 5 x i5 Notebooks and Accessories 2018-02-26 11:00 BDA0218519
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Pages

Tender adjudication process

The SBD/WCBD6.1 document must form part of all bids invited.  It contains general information and serves as a claim form for preference points for Broad -Based Black Economic Empowerment (B -BBEE) Status Level of Contribution, and explains how tenders or bids are decided.

The document says:

  • The bidder obtaining the highest number of points will be awarded the contract.
  • Preference points shall be calculated after prices have been brought to a comparative basis.
  • Points scored will be rounded off to two decimal places... Read More
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