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.
Appointment of a panel of law firms to assist the Council for Geoscience with all its corporate work for a period of three (3) years. 2019-06-14 11:00 CGS- 2019- 006L
Appointment of a Professional Service Provider to Provide Facial Recognition and Queue Management System to the CIDB for a period of 36 months. 2019-06-18 11:00 RFB60058
Re-Advertisement-The Development Of Standards For The Eco Label Scheme At Agrément South Africa: Wool and Wool-Rich Pile Carpets 2019-06-12 16:00 ASA 04/ 2019
Re-Advertisement-The Development of Standards for the Eco Label Scheme at Agrément South Africa: Paints and Coatings 2019-06-12 16:00 ASA 03/ 2019
Provision of Canteen Services 2019-06-14 12:00 MTK 02/ 2019
ZNTD 03855W: WIMS 063751: Kwazulu-Natal: Department of Education: Stanger: Tshutshutshu Secondary School: Water and Sanitation: Phase 3. 2019-06-20 11:00 ZNTD 03855W
Appointment of a Cleaning Company to render cleaning, pest control and hygiene services in Block G which is situated adjacent to the dti campus for a period of 3 years 2019-06-07 11:00 dti 03/ 19- 20
Grahamstown High Court: Provision of Cleaning Services for a Period of twenty four (24) Months 2019-06-11 11:00 PEC02/ 2019
Appointment of a service provider for physical security guarding services in Northern Cape and Free State 2019-06-07 11:00 DH05- 2019
Consulting Engineering Services for Routine Road Maintenance of National Route N10 Section 3 Km 37.62 To Km 81.59 and National Route R61 Section 2 Km 17.25 To Section 3 Km 41.48 and National Route R390 Section 1 Km 0.00 to Section 2 Km 23.56. 2019-06-07 14:00 NRA X.003- 040- 2019/ 1F
Consulting Engineering Services for the Routine Road Maintenance of National Routes R56 Section 1 (Km 58.78) to Section 2 (Km 30.81) and National Routes R58 Section 1 (36.96) to Section 3 (Km 55.73) and National Route R391 Section 2 (Km 0.0) To (Km 37.09) and National Route R390 Section 2 (Km 23.56) To (Km 34.46). 2019-06-07 14:00 NRA X.003- 044- 2019/ 1F
ZNTD 03952W: WIMS 064144: Kwazulu-Natal: Department of Education: Umbumbulu: Umthente High School: Water and Sanitation: Phase 3 2019-06-21 11:00 ZNTD 03952W
Consulting Engineering Services for the Routine Road Maintenance of National Routes R56 Section 1 (Km 58.78) to Section 2 (Km 30.81) and National Routes R58 Section 1 (36.96) to Section 3 (Km 55.73) and National Route R391 Section 2 (Km 0.0) To (Km 37.09) and National Route R390 Section 2 (Km 23.56) To (Km 34.46). 2019-06-07 14:00 NRA X.003- 044- 2019/ 1F
The Routine Road Maintenance of National Route N6 Section 4 Km 65.38 to Section 5 Km 57.07 and National Route R58 Section 4 Km 0 to Section 6 Km 43.06 and National Route R56 Section 4 Km 0 to Km 21.09 and National Route R56 Section 3 Km 27.37 to Km 35.04 2019-06-07 14:00 NRA X.003- 045- 2019/ 1F
ZNTD 03863W: WIMS 063908: Kwazulu-Natal: Department of Education: Maphumulo: Umvozane Primary School: Water and Sanitation: Phase 3 2019-06-20 11:00 ZNTD 03863W
Consulting Engineering Services for the Routine Road Maintenance of National Route R56 Section 4 Km 20.09 to Section 7 Km 25.71, National Route R58 Section 6 Km 40.06 to Section 7 Km 4.05 and National Route R410 Section 1 Km 0.00 To Section 3 Km 16.85 2019-06-07 14:00 NRA X.003- 042- 2019/ 1F
Consulting Engineering Services for the Routine Road Maintenance of National Route R56 Section 7 Km 25.713 to Section 8 Km 168.71 and National Route R396 Section 6 Km 0 to Km 39.31 2019-06-07 14:00 NRA X.003- 043- 2019/ 1F
Gravelling of Provincial Road P215 in the Amajuba District 2019-06-19 11:00 C253/ 1920/ BR/ 813
ZNTD 03969W: WIMS 064117: Kwazulu-Natal: Department of Education: Inchanga: Ukusakwabasha Primary School: Water and Sanitation: Phase 3. 2019-06-21 11:00 ZNTD 03969W
Betterment and Re-gravelling of Local Road L2416 in the Amajuba District 2019-06-12 11:00 C253/ 1920/ BR/ 805

Pages

Extension of validity period

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

Those of you who are familiar with responding to tenders will know that it is common practice for procuring entities to extend the bid price validity period. We received the undermentioned queries regarding the extension of the validity period of the bid price.

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