JOINT VENTURE

Kunal Rathod Yogesh Mishra Tushar Garde Rahul D Sharma Reshma Rozani Nitesh Aroskar

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INTRODUCTION

A contractual agreement joining together two or more parties for the purpose of executing a particular business undertaking. All parties agree to share in the profits and losses of the enterprise

REASON FOR JVs

Lower risk Opportunity for both Learning opportunity Technology Lower Risk of Geographical Location. Government Regulations Capital
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Need for setting up a Joint Venture

Internal Reason
1)Building on company's strength. 2) Spreading costs and

COMPETITIVE GOALS
1) Influencing structural evolution of the industry. 2) Pre-empting competition. 3) Defensive response to blurring industry boundaries. 4) Creation of stronger competitive units. 5) Speed to market. 6) Improved agility. 1)

STRATEGIC GOALS
Synergies.

2) Transfer of technology/skills.

risks.
3) Improving access to financial resources. 4) Economies of scale and advantages of size. 5) Access to new technologies and customers. 6) Access to innovative managerial practices.

3) Diversification.

Regulations Governing JV in India

SECTORS Mining (commercial)

PERCENTAGES 51%

Banking (Pvt), Airport (Existing)

Insurance Telecommunication Alcohol distillation and brewing, Floriculture, Horticulture , Animal Husbandry, Petroleum and Natural gas, Construction and Development, SEZs and Free Trade Warehousing Zones, Trading etc..

74%
26% 49%

100%

Problems of JVs

Valuation Problems. Transparency. Conflict Resolution. Division of management responsibility and degree of management independence Changes in ownership shares. Dividend Policy. Marketing and Staffing Issue. Cultural Problems. Multinationality problems.

Successful joint venture require

Each participant has something of value to bring to the venture. The participants should engage in careful preplanning. The agreement or contract should provide for flexibility in the future. There should be provision in the agreement for termination including buyout by one of the participants. Key executives must be assigned to implement the joint ventures. A distinct unit be created in the organizational structure which has the authority for negotiating and making decisions

Disadvantages of Joint Ventures Time and effort to build the right relationship. No clear objective. Different cultures and management styles result in poor integration and co-operation. Success in a joint venture depends on thorough research and analysis of the objectives.

THANK YOU!

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