The increasing trend of Joint Ventures and Strategic Alliances (JVSAs) represents a shift in the mindset of leading companies on how they seek growth, collaborate and compete in this constantly changing complex business environment.
A wave of new announcements in 2015 by companies such as Telstra, Toll, Ramsay Healthcare, Qube, Seven West Media and Qantas further underline the extent to which JVSAs have become a significant feature of the Australian corporate landscape. At the start 2015, 62 per cent of Australian CEOs surveyed by PwC, from a wide range of industries, said they were planning to enter a new JVSA – the third year in a row that this figure has increased.
There are four primary motivations for entering into a JVSA:
We are now seeing JVSA activity across all industry sectors. Our leading corporates are hungry for growth and starting to realise the need for a new model.
-- Peter Mastos, Consumer & Industrial Products and Services Consulting Leader
There is potential of up to $100bn of new alliances to be announced over the next few years. However, our research shows that over half of all alliances fail, delivering financial damage for both parents. Poor implementation accounts for 86 per cent of failures. Moreover, the average duration of an alliance is 4 years with as many as two-thirds ending within 2 years of formation.
The Science of Alliances: Success factors in joint ventures and strategic alliances outlines the seven drivers of JVSA success.
View our video to hear from leading CEOs as they talk about why they would consider entering a JV or strateg alliance.