2. Joint Venture is a combined effort of two or more
companies to form a new company. JVs are
undertaken to bring the distinctive competence of
two or more parties together.
Each party brings its own resources- finance,
managerial talent etc. When these resources are
put together, these give birth to a new entity which
is quite distinct from its parents.
3. A joint venture is formed between two or more
partners to take the advantages of their
complementary skills.
In short, both parties must be committed to
focusing on the future of the partnership, rather
than just the immediate returns. Ultimately, short
term and long term successes are both important.
In order to achieve this success, honesty,
integrity, and communication within the joint
venture are necessary.
4. The license raj that existed prior to economic
liberalization (1940s-1980s) in India did not allow
foreign companies to enter the market.
In the mid-’80s when the Indian government
started permitting foreign companies to enter the
Indian market through minority joint ventures.
5. Joint Venture between Government of India or a
State Government and another company- Indian
or Foreign, for Ex. Maruti Suzuki between
Gov of India and Suzuki Motors of Japan.
Joint Venture between two or more Indian private
sector companies, for Ex. Excel Industry
between Tata Group and Shroff Group.
6. Joint Venture between an Indian and a foreign
company. In fact, this type of joint venture has
attracted lot of attention.
Some major joint venture formed during 1980s in
this category are Kinetic Honda (between
firodia Group and Honda Motors ), Hero Honda
(between Hero Group and Honda Motors)
7. Hero Cycles manufactured Over 16000 Bicycles
a day.
They Sold about 86 million bicycles in
aggregate as of 2002.
They had nurtured an excellent network of dealers
to serve India’s expansive markets.
8. HMC first chose Kinetic Engineering Ltd. And
formed Kinetic Honda Motors Ltd. But this JV
would work in field of Scooters Manufacturing.
HMC came to Hero Group as the Last
compromise choice for its motorcycle venture.
9. Its engineering capability
Relevance and salience of HERO brand.
Distribution network.
Commitment to Quality.
Know-how and experience in handling large
volume production and distribution.
Tight focus on financial and raw material
processes.
Cordial Industrial Relations.
10. The deep penetration network of hero largely
benefited the sales.
Absence of major competitors in initial years.
Sound and proven technical capabilities of Honda
and the reliability of Hero.
Increased market for motorcycles:
◦ Better Fuel efficiency.
◦ Change in people’s perception.
◦ Decrease in price difference with scooters.
11. SonyEricsson between Sony Mobile
Communication and Swedish telecommunication
company Ericsson in October 2001.
Britannia New Zealand Foods Pvt ltd. Between
Britannia and Fonterra(Worlds second largest
dairy Company ) in 2002.
12. Time wasted first in negotiating the joint venture
and then aligning thinking of each partner.
Decision – making takes longer.
Less freedom and flexibility.
Ex. Tata Unisys (between Tatas and Unisys);
Proctor & Gamble Godrej India (between
P&G and Godrej); and so on
