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.
Removal of Existing Boundary Fence, Supply and Erect New Clearview (or Equal – Must Be Approved), Anti-Climb Security Fence, Pedestrian and Drive Gates at Lere La Tshepe Campus 2019-03-15 10:00 LERE- FENCE- 2019
Removal of Existing Boundary Fence, Supply and Erect New Clearview (Or Equal – Must Be Approved), anti-Climb Security Fence, Pedestrian and Drive Gates at Bonamelo Campus 2019-03-15 10:00 BON- FENCE- 2019
Structural Repairs, Internal and External Repairs and Renovations, Plumbing and Electrical Repairs and Renovations to the Classroom Block at the Bethlehem Campus Heritage Building. 2019-03-15 10:00 BETH- OLDBLOCK- 2019
Construction of New Male and Female Ablution Facilities Including Water Storage Facilities, Grey Water Treatment Facilities and Electrical Installation at Lere La Tshepe Campus. 2019-03-15 10:00 LERE- ABLUTION- 2019
Structural Repairs and Foundation Repair to External Classroom Walls at Itemoheleng Campus 2019-03-15 10:00 ITEM- WALLS- 2019
Roof Structure and Roof Sheeting Repairs and Replacement, Where Necessary, Including Waterproofing at Lere La Tshepe Campus 2019-03-15 10:00 LERE- ROOF- 2019
Repairs Including Structural, Roof and Internal Changes to Fire Damaged Office Building – Central Office 2019-03-15 10:00 CENT- BUILDING- 2019
Supply and Establishment of Park Homes: Chwezi Clinic 2019-03-14 11:00 ZNB 9505/ 2018- H
Maintenance and operation of the Air Conditioners: Natalia Building: 3 year contract 2019-03-15 11:00 ZNB 5480/ 2018- H
Construction of New Educational Facilities and Demolition of Old Structures at Sophatisana Secondary School 2019-03-11 12:00 CDC/ 59/ 19
Renewal of Nintex Licenses, Including Support and Maintenance for Period of Twelve (12) ,Months for South African Social Security Agency (Sassa). 2019-03-11 11:00 RFB 1816/ 2018
Procurement of an Integrated IT Operations Network Troubleshooting Tool Including Maintenance and Support Services 2019-03-18 11:00 RFP 35- 2018
Appointment of a Contractor to Conduct Various Construction Projects, Including Installation of Bird Netting, Installation of Foot Baths and Vehicle Tyre Baths, Renovations to Enclosure Wire Roofs; and Modification To Small Mammal Enclosures, at the National Zoological Garden In Pretoria 2019-03-05 11:00 SANBI NZG: 326/ 2019
Appointment of a Contractor for the Design and Construction a New Animal Quarantine Facility at the National Zoological Garden In Pretoria. 2019-03-05 11:00 SANBI NZG: 329/ 2019
Appointment of a Contractor for the Design and Construction of a Masonary Boundary Wall, Covered Staff Parking and to Conduct Remedial Work at Food and Beverage Outlets at the National Zoological Garden In Pretoria. 2019-03-05 11:00 SANBI NZG: 328/ 2019
Appointment of a Contractor for the Design, Installation and Commissioning of an Incinerator at the National Zoological Garden In Pretoria. 2019-03-04 11:00 SANBI NZG: 322/ 2019
Appointment of a Contractor for the Design, Supply and Installation of Mechanical Equipment, Including Pumps, Stand By Generators and HVAC at the National Zoological Garden In Pretoria. 2019-03-04 11:00 SANBI NZG: 323/ 2019
Procurement of Cleaning and Hygiene services to SITA Durban building for a period of 36 Months 2019-03-08 11:00 RFB 1866/ 2018
Invitation to tender for Rental Office Space for Seda’s Tshwane Branch Office in Pretoria for a period of Three (3) or Five (5) years 2019-03-08 12:00 RFP/ T 14- 2018/ 19
Invitation to tender for Rental Office Space for Seda’s Gauteng Provincial Office in Johannesburg for a period of Three (3) or Five (5) years 2019-03-08 12:00 RFP/ T 13- 2018/ 19

Pages

Tender Knowledge

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

Sometimes I am surprised at how little business people in South Africa know about Tenders and the Tender Process. Simple things like terminology and general tender information are difficult for people to comprehend not to mention the Standard Bidding Documents and Tender Pricing.

Unbelievably there are still Entrepreneurs that thinks to respond to tenders are an actual business? You will find that these Entrepreneurs would... Read More

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