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 and Laying of Pavement at Clanwilliam Fire Station 2018-10-30 12:00 6/5/2/310
Laboratory Services Needed For SANAS Accredited Testing Of Roads Materials 2018-10-29 12:00 6/5/2/386
National Security Refurbishment - Apollo, Minerva, Taunus, Westgate and Esselen - Package 2. 2018-11-19 10:00 PSCED0159
Training Course: Hygine and Cleaning Services at Moorreesburg 2018-10-30 12:00 6/5/2/111
Appointment of Service Provider to Supply, Install, Commission and Monitoring of CCTV Cameras at Polokwane Municipal Electricity Substations for period of three (03) years. 2018-11-19 10:00 PM78/2018
Provision of firefighter medical surveillance programme from September 2018 - June 2019. (As per attached specifications) 2018-10-25 11:00 288450
Supply and Delivery of Musical Instuments 2018-10-30 11:00 GQ10181966
Provision of Security Services at RTI Mkondeni DLTC. 2018-11-21 11:00 ZNB1432/17T (Bid Document R330.00)
Supply and deliver boat registration decals and numbers 2018-10-30 11:00 GQ10181967
Investigation and report on options for provision of tourism function in terms of section 7 & 78 of the municipal systems act. 2018-11-21 12:00 T32/2018/19
Tenders are invited to prepare Documentation For Principal & Subcontract Or Procurements for the construction of additional offices at the Disaster Management Despatch Depot 2018-10-30 11:00 CSQ10181463
Tenders are invited to prepare Preliminary And Elemental Estimates for the construction of additional offices at the Disaster Management Despatch Depot 2018-10-30 11:00 CSQ10181463
The supply and fitment of prescription lenses and frames for safety spectacles and the vision testing and certification of heavy duty drivers and driven machinery operators. 2018-11-22 10:00 KBG1871
Tenders are invited to provide Professional Quantity Surveying Services for the construction of additional offices at the Disaster Management Despatch Depot 2018-10-30 11:00 CSQ10181463
Tenders are invited for Reviewing the Existing Draft Economic Growth and Development Strategy 2018-10-30 11:00 CSQ10181462
Installation of eleven burglar alarms system at Worcester WWTW (as per attached specifications) 2018-10-31 11:00 289333
Supply and Delivery of Stationery. 2018-11-23 11:00 FIN-SCM28/2018/2019
Boxes Valve Fitted With Blue Round 250mm Lid Complete With Lockin Device - Sans 1/10525 Approved 2018-10-29 11:00 SQ10181292
Professional Services for Panel Town Planners. 2018-11-26 12:00 IHLM/73/10/2018-19/P&D
Boxes Fire Hydrant Fitted With Round 250mm Yellow Lid. Complete With Locking Bolts 2018-10-29 11:00 SQ10181292

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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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