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.
Appointment of a service provider to implement an electronic document and records management system for Chief Directorate: Professional Ethics 2019-02-01 11:00 OPSC 006/ 18
Appointment of a service provider for garden maintenance at the National Research Foundation in Pretoria for a period of five years 2019-02-13 11:00 NRF/ RISA B&M/ 006/ 2018
Appointment of a service provider for the provision of security services for the National Lotteries Commission for Free State Office (Welkom) 2019-02-18 11:00 NLC/ 2018 - 22
Provision of physical security services at the South African Medical Research Council Sites 2019-02-15 11:00 SAMRC/ FMPPSG/ 2018/ 14
Artificial Intelligence: Machine Learning Project 2019-02-15 12:00 RFP_2019_RPS_00001
Consulting Services on the Management and Supervision of the implementation of the MNJTF Command, Control, Communication and Information System (C3IS) and Aerial Intelligence, Surveillance and Reconnaissance (A-ISR) Service Contracts. 2019-02-04 15:00 AUC/PSOD/EU/QCBS/C-01/2016
Production and Delivery Of The Annual Report of merSETA For Periods 2018/2019 and 2019/2020 2019-02-07 11:00 RFP 005/ 2018
Appointment of a service provider for the supply and delivery of a new network performance monitoring system for the quality of services monitoring (QoS) on an 80/20 PPPFA 2000, Preferential Procurement Regulation: 2017 2019-02-19 11:00 ICASA 19/ 2018
Provision of Accredited Training, Establish SMME’s and Cooperatives, Provide Readiness. 2019-02-08 11:00 GEP005/ YOUTHPMO/ 18
Physical verification of all spaza shops in the Gauteng Region 2019-02-08 11:00 GEP003/ SPAZASHOPSPROJECT/ 18
Supply and delivery of Cleaning Chemical [As and when required] to various EKZNW resorts for a period of 3 years. 2019-02-15 11:00 EKZNW 01/ 2019
Supply and Delivery of fencing materials at Hluhluwe Game Reserve. 2019-02-15 11:00 EKZNW 04/ 2019
Provision of cleaning services at the Gauteng Department of Economic Development and Gauteng Department of Agriculture and Rural Development including regional offices. 2019-02-08 11:00 GT/ GDED/ 004/ 2019
South African Social Security Agency: Verulam Local Office: Procurement of Office Accommodation and Parking: Office space required of 832.44m² and 27 Secured parking bays on site.The building should be located in the Verulam CBD. 2019-02-12 11:00 DBN18/ 11/ 11
SAPS VISS and TRT: Port Shepstone: Procurement of Alternative Office Accommodation and Parking for the period of 5 years. Office space required should be able to cater for 1868.75m², 432 parking bays and 02 wash bays. Building to be located within the Port Shepstone area. 2019-02-20 11:00 DBN19/ 01/ 01
Removal of Healthcare risk waste: Various Correctional Centres - KwaZulu Natal Region for a period of 12 months 2019-02-18 11:00 KZN 09/ 2018
Appointment of a company to provide a suitable marine survey vessel for the Council for Geoscience for a period of three (3) years. 2019-02-18 11:00 CGS- 2018- 39F
Appointment of service provider for a Deep Vertical Stratigraphic Research Core Borehole for the Karoo Deep Drilling Programme in T Beaufort West. 2019-02-18 11:00 CGS- 2018- 045A
The purpose of this Request for Quotation (RFQ) is to invite proposals for the provision of catering services to the Tribunal. It is the Tribunal’s intention to appoint three (3) service providers onto a Panel of Preferred Suppliers for catering services. Please read the RFQ Documents for all the requirements. 2019-02-15 11:00 ER- RFQ/ 2018- 2019/ 11/ Catering
Appointment of a service provider to provide office lease space on a lease agreement for the CCMA Tzaneen Office for a period of five (5) years. 80/20 Principle will apply. 2019-02-08 11:00 CCMA/ 2018/ 06ALIMP

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10 Features of a good Joint Venture Agreement

By W van Rooyen

www.howtotender.co.za

A Joint Ventures is a good business idea to compete for tenders if one does not have all the necessary expertise that are required from a specific tender. The thing to remember though is that you must have a solid Joint Venture Agreement in place for your Joint Venture. A good, rock solid Joint Venture Agreement will protect the participants to the Joint Venture.

 Here are 10 features that any good Joint Venture Agreement... Read More

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