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Joint Ventures and partnerships

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Planning for alliance partnerships ranging from informal networks and understanding to M&As JVs etc, Tools for evaluation and cases for discussion

Planning for alliance partnerships ranging from informal networks and understanding to M&As JVs etc, Tools for evaluation and cases for discussion


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  • 1. Joint Ventures and Partnerships WEConnect September Jam Bangalore, 28th September 2012 Anjana Vivek anjana@venturebean.com
  • 2. Agenda Background Tool for analysis Cases for discussion Appendix About usVentureBean Consulting Private Limited 2 2
  • 3. JVs/ alliances • Creation of new/different business entities – Corporate, LLPs, Partnerships – M&A; JVs • Association of persons, body of individuals (Income tax recognition) • MoUs / agreements in place • Network associations to deliver jointly • Informal understandingsVentureBean Consulting Private Limited 3
  • 4. Business objectives • Revenue, profits growth • Improved cash flows • Value creation • Strategic to build brand • Leverage on networks • Faster growth trajectoryVentureBean Consulting Private Limited 4
  • 5. Initial stage planning • Shared vision • Complimentary and supplementary expertise • Synergy vs. costs • Risks vs. rewards • Legal and statutory issues • Business model and structuring • People related matters • Other non-business issues • Integration/operational planVentureBean Consulting Private Limited 5
  • 6. Growth with partnerships; M&As • Historically many M&As and partnerships have not given value expected. This could be due to – Overestimation of synergies – Underestimation of integration issues – Incomplete understanding of issues (includes financial, non financial) • So how can you plan for this, here is a: Tool for analysis…To Trigger ThinkingVentureBean Consulting Private Limited 6
  • 7. Agenda Background Tool for analysis Cases for discussion Appendix About usVentureBean Consulting Private Limited 7 7
  • 8. PBRT – for a potential transaction • People • Business • Regulatory • TimeVentureBean Consulting Private Limited 8
  • 9. PBRT - A deal review tool : People • Go beyond experience and education… • Starting point due diligence: Google, Facebook, LinkedIn, Youtube searches and ask your trusted networks… discretely • Comfort level, compatibility, alignment of thinking • Cultures, DNA of organisations • Reputational capital, integrity, ethics etc… will this add … or deplete value? • Connection capital, will doors open because of thisVentureBean Consulting Private Limited 9
  • 10. PBRT - A deal review tool : Business • Will the business benefits outweigh the costs of partnering together • What could be possible – Revenues – Profits – Value created – Cash flow • Will there be improvements in target market size, customers, price realization etc. • What will be the impact on key value drivers and key barriers to growthVentureBean Consulting Private Limited 10
  • 11. PBRT - A deal review tool : Regulatory • Company law and other laws that are relevant in countries in question • Tax impact and cash flow; i.e. beyond profits and profitability • For international JVs, impact of structure on: cap on investment, dividend payouts, control and management, guarantees and warrantees for fund raising, etc.VentureBean Consulting Private Limited 11
  • 12. PBRT - A deal review tool : Time • Immediate term: NOW .. In this 1 year: Need to survive • Medium term: 3- 5 years: Direction setting • Long term: really long term vision, personal and corporate, for example 15 years: Dream and motivations • Will the steps taken today take you towards the larger goalsVentureBean Consulting Private Limited 12
  • 13. Agenda Background Tool for analysis Cases for discussion Appendix About usVentureBean Consulting Private Limited 13 13
  • 14. Case 1 • Your service company in India wants to partner with a service company in US with customers in three countries • Your markets: Immediate India, long term global • US company: wants to enter India with a partner Q. Your current customers are in India; what are the 3-5 key points for planningVentureBean Consulting Private Limited 14
  • 15. Case 2 • Product company in India has been asked to work with European company, to jointly develop IP • European company will fund majority of development and wants to own IP, you hesitate.. Q. You are the Indian product development company, what are the 3-5 key points for planningVentureBean Consulting Private Limited 15
  • 16. Case 3 • Retail, single store owner in India has established a brand presence in her area • Wants to expand, thinking of franchising, what could be alternates Q. You are the entrepreneur who owns the store, what are the 3-5 key points for planningVentureBean Consulting Private Limited 16
  • 17. In summary • Clearly articulate why the collaboration makes sense to both parties. • Define risks of the collaboration; how to ring fence other businesses, if need arises. • Articulate various elements such as IP ownership, royalty, license fee, equity/debt mix, costs, billings, payouts, earnings etc. • Suggested approach: – attempt a loose structure to start with – Get to know each other better in real business environment – Then put in place a formal structure – Define milestones for each stage of loose structure. GOOD LUCK in your venturing…VentureBean Consulting Private Limited 17
  • 18. Agenda Background Tool for review Cases for discussion Appendix About usVentureBean Consulting Private Limited 18 18
  • 19. APPENDIX: Case discussion methodology • Individual thinking – 3 minutes • Group discussion – 10 minutes – Must have a consensus on key points • Joint case discussion with all groups, lead by facultyVentureBean Consulting Private Limited 19
  • 20. Agenda Background Tool for review Cases for discussion Appendix About usVentureBean Consulting Private Limited 20 20
  • 21. Our professional approach is uniqueVentureBean adds value to clients through…Expertise• Strategic and transformation capability - combined with expertise in operational implementation• Knowledge of local business conditions - combined with global best practices• Structured approach - ex 6 Sigma and Lean methodologiesWorking style• Entrepreneurship and Independence in working style – across levels in the organization• Change management is an important part of the work – we work together with the clientBusiness Setup• Team scalability – expertise across business functions• Innovative business models / frameworks …across multiple industry verticalsConsumer / Retail IT/IT enabled Travel & Banking / Finance Manufacturing Education Healthcare / Food services Transportation VentureBean Consulting Private Limited 21
  • 22. Our expertise within various areas….. Cross Planning, Change •Strategies for business growth •Governancefunctional Management, •Change Management •Project and Program Managementexpertise Integration •Business and operational Due Diligence •Channel strategies Sales and marketing •Product portfolio Management, and Product Extension effectiveness •Value Chain Mapping •Customer analysis, segmentation and loyalty programs •Lean process engineering methods Operation •Gap-analysis •Customer focused processes Organizational •Performance ManagementFunctional Development / •Key talent & change management •Leadership development based on the Leadership Diamond ™expertise Leadership / HR •Organization Structure for Excellence & Growth •Strategy, Governance & organization •Sourcing IT •Architecture •Project Management •Cost / Overheads Reduction •Cash-flow Management & Capital Structure Advisory Finance •Project Evaluation & Risk Management •Syndication-Debt & Equity VentureBean Consulting Private Limited 22 22
  • 23. Thank You!VentureBean Consulting Private Limited 23

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