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.
VMWare Software 2019-04-05 12:30 10401236
Checkpoint 2019-04-05 11:00 10401237
Hire of suitable furnished residential accommodation:15x1 bedroomed flat/apartments plus 15 secure on site-parking bays at Eshowe Hospital, Eshowe: Department of Health 2019-04-15 11:00 ZNT 7860 W
Saldanha: Military Base: Construction of new sick bay facility 2019-04-17 11:00 CPT1019/ 18
Presidential Inauguration: Provision of Stage, Sound, Big Screen and Related Infrastructure at Loftus Versfeld Stadium Functionality Criteria 2019-04-09 11:00 HP18/ 016GS
Pretoria: Procurement of Office Accommodation of 563.64 square meters and 19 parking bays usage by the Department of Science and Technology (National Advisory Council on Innovation) for a period of 3 years preferably in Lynwood, Sciencia Park 2019-04-09 11:00 Pt18/ 083
Remedy 2019-04-05 11:30 10401239
Pretoria: Procurement of Office Accommodation of 563.64 square meters and 19 parking bays usage by the Department of Science and Technology (National Intellectual Property Management Office) for a period of 3 years preferably in Lynwood, Sciencia Park 2019-04-09 11:00 Pt18/ 084
Bid for the Appointment of a Service Provider for the Provision of Cleaning and Hygiene Services to the Deaprtment of Labour Head Office for a period of two years 2019-04-12 11:00 BID LAB 01/ 2019
Provision of Cleaning Services at Mthatha Medical Depot 2019-04-12 11:00 SCMU3- 19/ 20- 0018- HO
Appointment of a Service Provider to Quantify Asbestos Fibres in Different Environmental Samples for a period of three (3) years 2019-04-16 11:00 CGS- 2018- 057A
Procurement of a Grade B Building for Ceta Academy 2019-04-08 11:00 010- 2018/ 2019
Preferred Service Providers for Technical Services (Roads & Civil Works) For Coega Development Corporation (Pty) Ltd 2019-04-08 12:00 CDC/ 68/ 19
Registration on New loveLife Trust Supplier Database 2019-04-12 12:00 No reference number
Preferred Service Providers for Technical Services (Aluminum Doors) For Coega Development Corporation (Pty) Ltd 2019-04-08 12:00 CDC/ 114/ 19
Preferred Service Providers for Technical Services (Signage - Road Side Signage) For Coega Development Corporation (Pty) Ltd 2019-04-08 12:00 CDC/ 116/ 19
Preferred Service Providers For Technical Services (Canteen Equipment Maintenance) For Coega Development Corporation (Pty) Ltd 2019-04-08 12:00 CDC/ 117/ 19
Preferred Service Providers For Technical Services (Fire Equipment) For Coega Development Corporation (Pty) Ltd 2019-04-08 12:00 CDC/ 120/ 19
Preferred Service Providers For Technical Services (Roof Specialist) For Coega Development Corporation (Pty) Ltd 2019-04-08 12:00 CDC/ 121/ 19
Preferred Service Providers for Technical Services (Fencing) for Coega Development Corporation (Pty) Ltd 2019-04-08 12:00 CDC/ 123/ 19

Pages

Must my business be registered in order to tender?

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

Once, a very anxious business owner phoned me and asked if I can supply him with a CK number. I was amused by this and first asked why he asked me for such a number and secondly for what did he need a CK number for? He said that because of my Tender Manual that he bought, he thought that maybe I can help him with a CK number. Also, at the briefing session of the tender that he was responding to, the person in... Read More

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