Joint venture business plan

Companies are realizing that JVs and alliances can be lucrative vehicles for developing new products, moving into new markets, and increasing revenues.

The third challenge that most joint ventures—and virtually all nonequity alliances—face is managing the economic interdependencies between the corporate parents and the JV.

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The JV requested from the global partner two or three people highly skilled in emerging-market branding and marketing. This should include drawing up legal documents to protect your own trade secrets and finding out whether your potential partner holds intellectual property rights agreements.

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For instance, Starbucks and PepsiCo were forced to rethink the direction of their joint venture after the first product it introduced, a carbonated coffee drink, received mixed results in early tests with customers.

Failure to acknowledge this can be costly. You should take into account your employees' attitudes and bear in mind that people can feel threatened by a joint venture.

The independent model, pursued by companies such as Carlson Wagonlit Travel and Marathon Ashland Petroleum, lets companies create new and often more entrepreneurial cultures.

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Reasons for joint venture

It is a selfless experience in which egos are never an issue and each of us can rely on any other to lend support, solutions, and the latest industry knowledge. Since each subcommittee met only four times per year, the time it took for the JV to make a decision became a distinct competitive disadvantage. Yet some companies have developed a core competency in alliances and pursue JVs over and over again with good results. This will help prevent any misunderstandings once the joint venture is up and running. You might benefit from their knowledge of new technologies and get a better quality of service. If the parents try to preserve the status quo, they risk reducing the synergies between them. To rally disparate salespeople around this goal, the sales and marketing launch teams focused on developing rules of engagement for all three sales groups product pricing and positioning, and the management of joint accounts ; defining incentives for all the salespeople; and developing mechanisms for building and transferring product knowledge among the sales forces—a critical issue, since the JV would be developing and manufacturing the products. The parents should generally limit their interventions in more operational processes—such as staffing, pricing, and product development—where the JV needs independence to ensure competitiveness and market responsiveness. It means building a strong finance organization inside the JV to make sure that the board and venture management have the critical information they need to do their jobs. They clarify strategy and governance, and they put in place the right incentives and processes to secure top talent and critical resources from the parents.

The opinions expressed here by Inc. They move quickly from general road maps to detailed, practical planning. The launch phase is the time to go beyond the lines and boxes and address how decisions will be made and disputes resolved.

Our most recent research, on which this article is based, confirms that the challenge continues.

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Joint ventures and partnering