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 delivery of high voltage portable earthing gear and insulating earth sticks during a 24- month period. 2018-11-23 11:00 E.9596
Spindle M20 With 220mm Shank Length Half Or Fully Threaded For Ep 472 - 22kv Insulator 2018-10-26 11:00 SQ10181289
Rental of landfill compactor for the period: 29 October until 31 December 2018 2018-10-26 11:00 12345
Design, manufacture, testing, supply and delivery of distribution transformers during a 36-month period. 2018-11-16 11:00 E.9597
National Certificate: Water and Waste Water Process Control NQF 3, SAQA ID 60190 Learnership 2018-10-25 12:00 162/2018/19
Lugs Aluminium Copper Friction Welded For AAAC Almond Cond. 2018-10-29 11:00 SQ10181290
Establishment of panel of service providers for the supply and delivery of alcoholic beverages to Moses Mabhida Stadium, by quotation, on an as-when required basis, for a period of 36 months. 2018-11-16 11:30 MMS-509
Fuse Link 40 Amp (Universal Removable Button Contact With Washer) Type K. 2018-10-29 11:00 SQ10181290
Line Post Spindles Mild Steel Galvanised 91 X 20, Dia Part No. 20-1 And Hardware 2018-10-29 11:00 SQ10181290
Twin Ties for Pine AAAC Conductor PLP TYPE (ATT426) ONLY. 2018-10-29 11:00 SQ10181290
Appointment of service provider/s to provide catering services (Corporate) to the RTMC for a period of three years. 2018-11-12 11:00 RTMC BID 16/ 2018/ 19
Glands Cable No. 2 Complete With Shrouds SABS 1213. 2018-10-26 11:00 SQ10181285
Supply and delivery of Tactical Telescope Baton, handcuffs and pepper spray 2018-10-25 12:00 168/2018/19
Nelson Mandela Museum seeks the services of a suitably qualified, professional, experienced and competent service provider to render Company Secretarial Services to the Council and Sub-Committees for a period of two years (24 months). 2018-11-14 12:00 NMM 2018- 10
Padlock Meter Room Engraved N.M.B.M. Elect. S.E.F.H. With 8mm Hardened Stainless Steel Shackles Master Keyed Union 50mm (+ 2 Master Keys To Be Supplied) 2018-10-26 11:00 SQ10181285
Flux For Soldering Non Toxic 2018-10-26 11:00 SQ10181285
Policy Development and Management at NQF 5 2018-10-25 11:00 163/2018/19
Earth Fault Indicators. To Fit Over 27 - 70 Mm , 8 - 80 Mm, 5 - 90 Mm. 2018-10-26 11:00 SQ10181285
Customer Service Programme aligned to Unit Standard 242829 NQF 4 2018-10-25 12:00 164/2018/19
Tenders are invited to Supply, Deliver,Instal Lation And Configuration of the SQL Server 2018-10-30 11:00 CSQ10181458

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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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