Joint ventures and strategic alliances as win-win partnerships

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 is a marked increase in more growth-oriented JVSAs across a wide range of industry sectors

There are four primary motivations for entering into a JVSA:

  1. JVSAs are an attractive (and in some cases the only) vehicle to enter new markets
  2. It provides an opportunity for organisations to grow by moving into adjacent industry sectors
  3. JVSAs enable organisations to find suitable partners that bring complementary capabilities that can help both parties to grow further, faster
  4. The benefits of a vertically integrated model are also cited as another strategic driver
     

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

Success factors and pitfalls with JVSAs

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.

Download the discussion summary

Grow together: A senior executive’s perspective features a summary of insights from Australia’s leading corporate executives to share their practical experiences of JVSAs at a roundtable discussion, under the theme of ‘JVSAs as Win–Win Partnerships’.

Read the report

Read the report

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.

Contact us

Peter Mastos
Partner
Tel: +61 3 8603 2194
Email

Brian Mullock
Managing Director, Sydney
Tel: 61 (2) 8266 1081
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Mike Sum
Partner
Tel: +61 3 8603 5924
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