Joint Presentation Venture TopicSubmitted By Group No-7 To-Ashwini mam SUBJECT
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ROHIT THAKUR VIKRANT SURVE SIDDHI TANVIDKAR ASHLESHA SURVE PRIYANKA GAIKWAD
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WHAT IS JOINT VENTURE
When two or more person come together to form temporary partnership for the purpose of carrying out of a particular project such a partnership can called joint venture.
DefinitionA contractual agreement joining together two or more parties for the purpose of executing a particular business undertaking. All parties agree to share in the profits and losses of the enterprise
Features Of Joint Venture
Temporary partnership and comes to an end on completion of the
particular venture.
Particular partnership as it is formed for a particular venture Special partnership without the use of the firm name.
To earn profit and to share it among all ventures.
Joint venture does not follow the accounting concept going concern. Profit and losses shared an agreed proportion if there is no agreement
regarding the distribution of profit they will share profit equally.
Agreement for a polling of capital and business abilities to be employed
in some profitable venture.
At the end of venture all the assets are liquidated and liabilities of paid off
if necessary the assets and liabilities could be shared by co ventures.
Advantages Of Joint Venture
SUFFICIENT RESOURCES
ABILITY AND EXPERIENCE SPREADING OF RISK
MORE RESOURCES
ACCESS TO NEW MARKET NEW AND IMPROVED TECHNOLOGY
USE OF EXISTING MARKET ARRANGEMENT
ACCESS TO IMPROVED RESOURCES DIVERSIFICATION OF BUSINESS EXCHANGE OF PRODUCT
Disadvantages Of Joint Venture
It takes time and efforts to form the right relationship
The objective of each partner may differ the objective needs to be
clearly define and communicated to everyone involved
Imbalanced in the share of capital, expertise, investment etc. may
cause friction between the partners
Difference in the culture and style of business lead to poor cooperation Lack of communication between the partners may affect the business Lack of assuming responsibilities by the partners may lead the collapse
the business
Difference Between Joint Venture & Partnership
Partnership
A partnership is a legal arrangement where two or more people own a
Joint Venture
You enter a joint venture for a specific project. There is a time limit on joint ventures, and they have clearly stated
business together. This means that the
entire business is shared for as long as the business exists. Both partners contribute money, time and expertise to
limits on their purposes. You might
enter a joint venture in order to make a product that neither partner can afford to make on her own. An example is
making a profitable enterprise, and that
enterprise lasts until the partnership is dissolved.
developing new software. You do not
give up half of your business in a joint venture; you share the profits and expenses for a particular venture.
Difference Between Joint Venture & Partnership
Joint venture 1. Parties The participant in joint venture is known as co-ventures. It is temporary in nature and is terminated as soon as the venture is completed. It does not need any single name to carry on the activity. Profits are ascertained after the completion of each venture. Cash basis account is followed. Partnership The participant in partnership is known as partners. It is a going concern business.
2. Nature
3. Name
It always bears a first name.
4. Profit
Profits are ascertained annually.
5. Basis Of Account 6.Purpose
Accrual basis of account is followed.
If you need a cash infusion
If you have a new product or service you want to develop.
Difference Between Joint Venture & Strategic Alliances
Strategic Alliances
When companies want to quickly gain a new area of expertise or access to new technology or markets, they usually have two options: buy a smaller company with those assets or form a strategic alliance with another company that would benefit equally from the partnership. These agreements often have a limited scope and function, such as trading access to a strong brand for access to an emerging technology.
Joint Venture
When two companies invest funds into creating a third, jointly owned company, that new subsidiary is called a joint venture. Because the joint venture can access assets, knowledge and funds from both of its partners it can combine the best features of those companies without altering the parent companies. The new company is an ongoing entity that will be in business for itself, but profits are owned by the parents.
CASE STUDY
Roca is the worlds largest sanitaryware manufacturer and Parryware is leading
player in the Indian sanitaryware market.
The case describes the origin and growth Roca and Parryware leading up to the
joint venture which was to operate primarily in India.
It explains in detail the skill, discussion on the challenges and future prospects
that partners bring to the Joint Venture. In September 2006, Parryware Roca Pvt ltd(PR), a 50:50 joint venture between EID Parry(India) ltd. (EID Parry) a major Indian business house and Spanish sanitary company, Roca Corporation Empresarial, S.A (Roca) announced plans to start selling Roca products in India, using a shop-in-shop
retail format. PR would import Roca products and retail them at 25 of the joint
ventures big showrooms across India. By the end of 2007, PR would be franchising 20 new exclusive PR stores in eight cities.
Roca picked up 50% stock min Parryware Glamourooms Pvt Ltd(PGPL),
after which the company was renamed as PR. With this Roca became the worlds largest manufacturer of bathroom product. Through the JV, Roca expected to gain access to the growing Indian sanitaryware market. PR was expected to benefit significantly through Rocas superior technology, improved manufacturing practices, better product offering, and international presence. While Roca was set to gain
market share in India, it also had plans to use JVs plants to manufacture
products for export to other countries. However the JV was excepted to face strong competition from foreign as well as domestic competitors.
Synergies in Joint venture
Reduce Entry Risk
First Step to Franchising
local borrowing power can be use Goodwill of the local partner is carried forward. Access of local resource Access foreign technology and experience. Job and skills growth through investment. Minimum government influences.
Strength of the Joint Venture
Good communication, cooperation and coordination among partners Common goals and shared vision among partners Dedication towards the success and long term sustainability of the
JV
Proper sharing of profits and benefits among partners JV should work towards the benefit of all the partners Proper planning and research prior to the incorporation of the JV
EX- VOLVO EICHER JV,TATA DOCOMO
Reason Behind the Failure of a Joint Venture
Lack of understanding between the partners Lack of patience and motivation among partners Benefits lower than the expectations Operational Difficulties due to geographical location of the partners Differences and conflicts between partners on various issues. Incompatibility of the culture and management styles of the partner
organizations.
Thank you
