What are the four major factors in joint venture success?
What will be an ideal response?
1. The accurate assessment of the parties involved to best manage the new entity in light of the ensuing relationships. The joint venture will be more effective if the managers can work well together. Without this chemistry, the joint venture has a low likelihood of success and may even fail.
2. The degree of symmetry between the partners. This symmetry goes beyond chemistry to objectives and resource capabilities. When one partner feels that he or she is bringing more to the table, or when one partner wants profits and the other desires product outlet, problems arise. Good relationships must be nurtured between the managers in the joint venture and those in each parent company.
3. The expectations of the results of the joint venture must be reasonable.
4. The timing must be right. With environments constantly changing, industrial conditions being modified, and markets evolving, a particular joint venture could be a success one year and a failure the next. Intense competition leads to a hostile environment and increases the risks of establishing a joint venture. Some environments are just not conducive to success.
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