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.
Provision of Office Accommodation: Beaufort West Satellite Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered). 2018-10-26 11:00 38/ 2018
Provision of Office Accommodation: Vredendal Local Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered). 2018-10-26 11:00 37/ 2018
Provision of Office Accommodation: Carletonville Satellite Office for a leased period of 5 years. 2018-10-26 11:00 46/ 2018
Provision of Office Accommodation: Wolmaranstad Satellite Office for a leased period of 5 years. 2018-10-26 11:00 50/ 2018
Provision of Office Accommodation: Pretoria Local Office for a leased period of 5 years. 2018-10-26 01:00 52/ 2018
KwaZulu-Natal: Department of Public Works: eThekwini Regional Office: Mayville Offices–South Wing: Upgrade of Air Conditioning System 2018-10-26 11:00 ZNTD 03279W
KwaZulu-Natal: Department of Public Works: eThekwini Region: Durban: Installation of 800KVA standby generator for the Mayville Complex and Relocation of the existing 400KVA to iLembe District Office. 2018-10-29 11:00 ZNTD 04430W
Appointment of a panel of service providers to undertake building maintenance and roof repair work for the KZN Department of Human Settlements on a rotational basis for a period of 2 years. 2018-10-24 11:00 ZNB17/ 2017/ 18HSE
Appointment of a panel of service providers to undertake land clearing work / field maintenance for The KZN Department of Human Settlements on a rotational basis for a period of 2 years. 2018-10-25 11:00 ZNB19/ 2017/ 18HSE
Appointment of a service provider to conduct wellness screening and related support services for employees within the employ of the Kwazulu-Natal Legislature. 2018-10-24 11:00 KZNL 17/ 2018
Supply, delivery and off-loading perishable provisions. 2018-11-06 11:00 LMN 06/2018 LIMPOPO
Consultancy Services - Designing a Programme for Renewable Energy Development in African Island States (REAIS) 2018-11-02 15:00 AUC/IED/C/378
Painting of palisade fencing at Ezamokuhle 1, Ezamokuhle 2, Grootdraai and Kendal ambient air quality sites using Cowrie Gold Colour Powder Coating Paint. 2018-11-01 10:00 ERIC1107
Supply and delivery of laboratory chemicals, reagents, glassware and consumables as and when required for a period of five (5) years. 2018-10-31 10:00 ERIC0588
Provision of Facility Management Services to Eskom Real Estate in the Free State Operating Unit for 3 years (NONE TECHNICAL) Cleaning & Gardening. 2018-11-15 10:00 MdB18/24
Request for information on multiple gauge coach bogie. 2018-11-27 10:00 TE18-BFX-05G-06843
Vat Review. 2018-11-06 12:00 VDM/FIN/11/09/2018/01
General medical practitioner (36 months). 2018-11-19 12:00 ULM-INFR009/19
The maintenance, repair and testing of earth equipment's for various zones within the Limpopo Operating Unit on an "as and when" required basis for a period of thirty-six (36)months. 2018-10-24 10:00 PTB1362
Supply and maintenance of printer machines. 2018-10-24 12:00 MN06/2018-19

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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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