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.
Couplings Straight 20 Mm X 3/4" Male Polypropylen E For Hdpe Pipe 2018-12-21 11:00 SQ12181326
Clamps Centre Phase Pole For 22kv Single Pole Construction As Per Drawing A2/539 Available At Purchase Office, Harrower Road, P.E 2018-12-21 11:00 SQ12181326
Adaptors Flanged 100 Mm Iron Class "C" Drilled 4504 Table 16 F.B.E. Coated Blue. 2018-12-21 11:00 SQ12181327
Pipes Pvc 96 Mm Class 16 -Supplied In 6 Meter Lengths. 2018-12-21 11:00 SQ12181327
Toilet Seat Double Flap Complete With Bolts & Nuts Colour White National N I P Fs28b 2018-12-21 11:00 SQ12181327
Request for Proposal for Airport Economic, Social and Environmental Impact Study for five (5) years 2019-02-15 11:00 COR5649/2018/R
Tenders are invited from an international rating agency who is a registered CRA to perform Annual Credit Rating 2018-12-21 11:00 CSQ12181512
Ballcock 25 Mm Rough Brass 1090 Fi Sabs, Jaswic Approved. 2018-12-21 11:00 SQ12181329
Ballcock 20mm Rough Brass Cobra 1090 Fi Sabs . Jaswic Approved. 2018-12-21 11:00 SQ12181329
Ballcock 15 Mm Rough Brass 1090 Cobra S.A.B.S. (Jaswic Approved) 2018-12-21 11:00 SQ12181329
Supply & Delivery of Poles Steel Heavy Duty Galvanised Type H Straight No Bow Single Spigot 2018-12-21 11:00 SQ12181330
Supply & deliver Light Commercial Tyres 195/R15/C 2018-12-18 11:00 SQ12181331
Tenders are invited to Supply and Deliver Chemical Oxygen Demand (COD) for Spectrophotometer 2018-12-18 11:00 GQ12182009
Tenders are invited for Monthly Service to provide Data Services for 1200 Data Cards Registered on the MTN APN as per Account : A1387418 2018-12-18 11:00 CSQ12181510
Tenders are invited for Monthly Service for Providing a Private APN Service on the MTN Network as per Mtn Account Number 071441 2018-12-18 11:00 CSQ12181510
Tenders are invited to Supply and Deliver Wooden Boards 2018-12-18 11:00 GQ12182006
Tenders are invited to provide Stack Emissions Testing Training 2018-12-19 11:00 CSQ12181509
Tenders are invited to provide Electromagnetic Radiation Training 2018-12-19 11:00 CSQ12181509
Rental Of Photocopier Machines for a period of 36 months 2019-01-11 12:00 104/2018
Invitation for the provision of security services at Ngaka Modiri Molema District for the department of social development 2019-01-29 11:00 NW/DSD/04/2018

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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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