Joint Venture – Train Wash Machine Manufacturer – China Car Wash Tool

When are joint ventures used?
Joint ventures are not uncommon in the oil and gas industry, and are often cooperations between a local and foreign company (about 3/4 are international). A joint venture is often seen as a very viable business alternative in this sector, as the companies can complement their skill sets while it offers the foreign company a geographic presence. Studies show a failure rate of 30-61%, and that 60% failed to start or faded away within 5 years. (Osborn, 2003) It is also known that joint ventures in low-developed countries show a greater instability, and that JVs involving government partners have higher incidence of failure (private firms seem to be better equipped to supply key skills, marketing networks etc.) Furthermore, JVs have shown to fail miserably under highly volatile demand and rapid changes in product technology.[citation needed] Some countries, such as the People’s Republic of China and to some extent India, require foreign companies to form joint ventures with domestic firms in order to enter a market. A joint ownership venture may be brought about in three major ways: (i) Foreign investor buying an interest in a local company. (ii) local firm acquiring an interest in an existing foreign firm. (iii)Both the foreign and local entrepreneurs jointly forming a new enterpries.
Brokers
In addition, joint ventures are practiced by a joint venture broker, who are people that often put together the two parties that participate in a joint venture. A joint venture broker then often make a percentage of the profit that is made from the deal between the two parties.
Reasons for forming a joint venture
Internal reasons
Build on company’s strengths
Spreading costs and risks
Improving access to financial resources
Economies of scale and advantages of size
Access to new technologies and customers
Access to innovative managerial practices
Competitive goals
Influencing structural evolution of the industry
Pre-empting competition
Defensive response to blurring industry boundaries
Creation of stronger competitive units
Speed to market
Improved agility
Strategic goals
Synergies
Transfer of technology/skills
Diversification
Reasons for dissolving a joint venture
Aims of original venture met
Aims of original venture not met
Either or both parties develop new goals
Either or both parties no longer agree with joint venture aims
Time agreed for joint venture has expired
Legal or financial issues
Evolving market conditions mean that joint venture is no longer appropriate or relevant
Examples
AutoAlliance International (Ford + Mazda)
Brewers Retail Inc. (Inbev, Molson Coors + Sapporo Breweries)
CW Television Network (CBS Corporation + Warner Bros.)
Bank DnB NORD (DnB NOR + NORD/LB)
Dow Corning (Dow Chemical Company + Corning Incorporated)
Fujitsu Siemens Computers (Fujitsu + Siemens AG)
GlobalFoundries (AMD + Advanced Technology Investment Co. (ATIC))
Huawei Symantec (Huawei + Symantec)
Hulu (NBC Universal + Fox Entertainment Group + ABC, Inc.)
INTO University Partnerships specialises in creating JVs with British universities
LG.Philips Components (LG + Philips)
MSNBC (Microsoft + NBC Universal)
Nokia Siemens Networks (Nokia + Siemens AG)
NUMMI (General Motors + Toyota)
Penske Truck Leasing (GE + Penske)
PetroAlam (Royal Dutch Shell + Vegas Oil and Gas + GDF Suez)
Prime Time Entertainment Network from the Prime Time Consortium (Warner Bros. + the Chris-Craft group of independent stations.)
Shell-Mex and BP (Royal Dutch Shell + British Petroleum, 1931-1975)
Sony BMG Music Entertainment (Sony Music Entertainment [part of Sony] + Bertelsmann Music Group [part of Bertelsmann])
Sony Ericsson (Sony + Ericsson)
Strategic Alliance (Northwest Airlines + KLM)
The Balfour Beatty Skanska, construction contractors (Balfour Beatty + Skanska)
The Baseball Network (ABC, NBC, + Major League Baseball)
Tata DoCoMo (Tata Teleservices + NTT DoCoMo)
TNK-BP (BP + TNK (Tyumen Oil Co.))
TriStar Pictures (Columbia Pictures, HBO, + CBS)
United Launch Alliance (ULA) (Boeing + Lockheed Martin)
Uninor (Telenor + Unitech Group)
Verizon Wireless (Verizon Communications + Vodafone)
Virgin Mobile India (Virgin Group + Tata Teleservices)
The XFL (NBC + World Wrestling Entertainment)
NBC Universal (NBC [part of General Electric] + Vivendi Universal Entertainment [part of Vivendi])
Canara HSBC Oriental Bank of Commerce Life Insurance Company Limited. Canara Bank + HSBC + Oriental Bank of Commerce
See also
Consortium
Institute
External links
Cornell Law School’s Joint Venture Info Page Contains legal information and relevant definitions regarding joint venture partnerships
Categories: Business law | Strategic alliances | Joint ventures | Types of companiesHidden categories: All articles with unsourced statements | Articles with unsourced statements from February 2007