Issue Date: 
Tuesday, September 11, 2018

Advantages and disadvantages of Joint Ventures

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

Joint venture Advantages:

  • Provides companies with the opportunity to gain new capacity and expertise.
  • Enables companies to enter related businesses or new geographic markets or gain access to new technology.
  • Provides access to greater resources - including specialised staff and technology.
  • Shares risks with a venture partner.
  • Enables flexibility: a joint venture can have a limited life span and only cover part of what you do, thus limiting both your commitment and the business exposure.
  • Offers a creative way for companies to exit from non-core business.
  • Companies can gradually separate business from the rest of the organisation and eventually, sell it to another parent company. Roughly, 80% of all joint ventures end in a sale by one partner to another.

Joint Venture Disadvantages:

  • It takes time and effort to build the right relationships and partnering with another business can be challenging. Problems are likely to arise if:
    • The objectives of the business are not 100% clear and communicated to everyone involved.
    • There is an imbalance in the level of expertise, investment or assets brought into the venture by the different parties.
    • Different culture and management styles result in poor integration and co-operation.
    • The partners do not provide enough leadership and support in the early stages.
  • Creating a joint venture may result in more complex tax arrangements.
  • Success in a joint venture depends on thorough research and analysis of the objectives.
  • Creating a joint venture can be more costly than a consortium.

To learn more about this and many other bid conditions please attend one of our HowtoTender workshops. For more information on the tender courses please email Estelle at estelle@how2tender.com.

Title Closing Date Tender No.
Suppy and Delivery Body Bags X 500units. 2018-11-23 11:00 ZNQ 210/ 18/ 19
Supply and Delivery of Sutures and Ligatures to all Hospitals/Institutions under the Control of the Department Of Health, Western Cape Government for a three year period 2018-12-14 11:00 WCDOH12/ 2018
Supply and Delivery of Mesh and Fixation Devices to all Hospitals/Institutions under the Control of the Department of Health, Western Cape Government for a three year period. 2018-12-14 11:00 WCGHC004/ 2018
Provision of Further Education and Training in Contact Centre Operations Articulating to the National Diploma In Contact Centre Management over a period of 36 months 2018-12-07 11:00 SCMU3- 18/ 19- 0371- HO
Gortex Suture Cv5 and Cv6 2018-11-27 11:00 PSH 983/ 1819
Platform Plinth. 2018-11-27 11:00 PSH 978/ 1819
Closed Suction System- Size 6 And 8fg 2018-11-27 11:00 PSH 1023/ 1819
Long Length Reusable Gloves 2018-11-27 11:00 PSH 1056/ 1819
Weighted Polyurethane Nasogastric Tube. 2018-11-27 11:00 PSH 1055/ 1819
Scrub Suits - Various Sizes 2018-11-27 11:00 PSH 1069/ 1819
Mankwe Trainning College(Mogwase) Installation & Connection to a Backup Generator Set to Academy and Provisioning of Lightning Conductor (Proffesional Servce Type: Electrical Engineering Works - Building) 2018-12-14 11:00 MMB 2019/ 027 EC
Combi Steam Industrail Oven 20 Trays Including Installation 2018-11-28 11:00 ZNQ: 469 / 2018/ 19
Electric Ring Cutter 2018-11-27 11:00 PSH 1046/ 1819
Supply, Delivery, Installation, Support, Maintenance, Commissioning and Training of Audio-Visual Equipment for all Classrooms, Lecture Halls and SImlab at the Western Cape College of Nursing, (WCCN) Metro West Campus (Athlone) for the Department of Health for a three (3) year period 2018-12-14 11:00 WCGHSC0179/ 2018
Appointment of a suitable service provider to Supply, Install and Configure eMail cleansing services to SITA and its clients for a period of two (2) years 2018-11-30 11:00 RFB 1846/ 2018
Data Storage Upgrade - Supply, Delivery, Installation and Configuration 2018-12-07 11:00 RFT- 2- 2018/ 19
The RAF hereby invites service provider for rental of document scanners for a period of five (5) years. 2018-12-14 11:00 RAF 2018/ 00052
Construction of a New Replacement Umyezo Wama Apile Primary School, Overberg. 2019-01-17 11:00 S103/ 18
Appointment of a Contractor for the Refurbishment and Construction of New Infrastructure In Magudu Combined School Situated In Magudu Village In Nkomazi Local Municipality At Ehlanzeni District Municipality, Mpumalanga. 2018-12-06 11:00 CONMP 0009 (2018/ 2019)
Pretoria: Service, Repairs and Maintenance of Air Conditioners at Pretoria Central Magistrate Court for period of 24 months 2019-01-08 11:00 PT18/ 041

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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
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