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.
Supply, Delivery and Installation Of Bulk Filers 2018-10-31 12:00 Q22.10.18
Supply Tools and equipment 2018-10-30 12:00 GD11900474
Training: Health and Safety Representative Unit Standard 116518 Level Two (2) 2018-10-26 12:00 Q18.10.18
Supply and delivery of sound equipment. 2018-10-25 11:00 GK11900187
Supply: Cartridge 2018-10-25 11:00 GM11900312
Training: First Aid Training Unit Standard 1119567 NQF Level One (1) 2018-10-26 12:00 Q17.10.18
Supply and delivery of Laserjet Cartridges 2018-10-26 12:00 Q21.10.18
Supply and delivery of Forms 2018-10-26 12:00 Q20.10.18
Supply and Delivery of Material for Upgrading of Roads and Stormwater in Rietbron. 2018-11-07 12:00 31/2018
Overnight Delivery Services for a Period of Twelve (12) Months and when required 2018-10-26 12:00 Q19.10.18
Supply and install relay protection, Port of Cape Town. 2018-11-08 10:00 BLE RME 5097/2018
Service, repair and maintain all kitchen equipment for 24 months. 2018-11-09 11:00 KIM-0718-107087
KURUMAN STATISTICS SOUTH AFRICA: Alternate office accommodation 461.36m² and 15 parking bays for a period of 3 or 5 years. 2018-11-09 11:00 LS14/2018
Supply, delivery and installation of access control equipment 2018-10-31 11:00 FQ/SM: 47/19
Repairs/ maintenance of pilot & work boat Tristan tern during dry docking. 2018-11-13 12:00 PAC 264
Mhlathuze Water is calling for interested and suitably qualified and accredited training service providers to submit proposals for inclusion in the panel of training service providers for the period of three years. 2018-11-16 12:00 MW/3/7/2018
Design and construction of a new polymer tank bund wall at Nsezi WTW 2018-11-12 16:00 MW/18/10/2018
Appointment of One Service Provider to Supply, Print and delivery of sport Apparels/Promotional materials of all sport and Recreation events for a period of three (03) years (Re-advert). 2018-11-19 10:00 PM151/2018
Operational Due Diligence: Alleyroads. 2018-11-19 11:00 AC/10/2018
Provision of Maintenance and Calibration Services for Some or All of the following Laboratory Equipment: Climatic, Photometry and Electrical Test Instrument, an Electrical Energy Reference Standard and an Environmental Test Chamber as and when required for the period of three years. 2018-12-05 10:00 ERIC1041

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.