Getting More Value from Joint Ventures

Getting More Value from Joint Ventures

          
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Getting More Value from Joint Ventures

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    The popularity of joint ventures (JVs) and alliances sharply declined during the global financial crisis, but they are making a comeback—especially among multinational corporations (MNCs) and Asian companies seeking to make inroads into new markets. Given the regulatory constraints in many parts of Asia, as well as the prevalence of family businesses and state-owned enterprises, JVs and alliances are often more attractive than mergers or acquisitions, which typically involve some degree of takeover or control and can lead to negative publicity.

    Despite their resurgence and a few high-profile successes, JVs and alliances are challenging, and many participants are disappointed with the value the partnerships deliver. What are the key obstacles, and what do successful ventures do differently?

    SURVEY METHODOLOGY

    As illustrated in the exhibit below, BCG’s findings on joint ventures (JVs) and alliances are based on a quantitative survey of executives from more than 70 companies involved in such partnerships, as well as extensive analytical research and face-to-face and telephone interviews. The research drew on the rich Thomson Reuters database covering ten years of JVs and alliances in a wide range of sectors, locations, and outcomes. The goal of our quantitative survey was to gain a better understanding of how companies use JVs and alliances for corporate development, the sources of success and failure, and key value levers.


    To find out, BCG surveyed executives from more than 70 companies in ten industries: real estate; health care; oil and gas; financial services; infrastructure and transportation; industrial goods; energy and utilities; mining; technology, media, and telecommunications; and consumer goods. The survey respondents included MNCs with JVs in Asia, as well as companies from developing Asian economies with JVs in the U.S. or Europe. We also analyzed JV best practices in Asia to gain further insights. (See “Survey Methodology.”) Our goals were to gain a better understanding of how different companies approach and manage joint ventures and alliances and to determine which approaches are most effective.
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