How do cross-border joint ventures protect themselves as the risks of doing business overseas increase? We outline some new rules for a changing world.
Our Approach to Joint Ventures Consulting
Our joint venture consulting services include a comprehensive suite of advisory services, perspectives, expertise, and tools to help companies navigate the joint venture landscape—from start to finish.
Our Global Perspective and Network of Experts
The most promising—and challenging—joint ventures today are international. Since 2014, we’ve advised nearly 500 international joint ventures, strategic alliances, and other business collaborations worldwide.
BCG was named a leading joint venture and alliances provider in ALM Intelligence’s report, The ALM Vanguard: Joint Ventures and Alliances Consulting 2019, which cited BCG’s advisory work on digital ecosystems as a key factor in enhancing the value of our offering.
The Five Stages of the Joint Venture Life Cycle
BCG helps companies understand and avoid the common pitfalls throughout all five stages of the joint venture life cycle, using our own joint venture checklist and step-by-step playbook:
1. Alliance Strategy
- Call out the most important strategic objectives you want to achieve via the prospective joint venture.
- Define what you expect from your future partners. Outline the scope of the deal.
- Develop alliance rationale.
- Decide on alliance type.
2. Partnership Search and Negotiation
- Define elimination criteria to narrow the field of prospective partners—focusing on the greatest obstacles to success, such as alignment on business objectives or operating model.
- Apply prioritization analysis to create a short list of possible partners.
- Screen final candidates, assessing each for strategic and cultural fit.
- Build chemistry and trust among partners.
3. Setup
- With your selected partner, clarify the venture's business strategy and confirm its scope and partners' precise contributions.
- Decide on decision-making mechanisms and board structure. Determine how you'll approach HR and talent management.
- Select mechanisms for protecting intellectual property.
- Identify collaboration models for key joint venture functions.
- Set up pragmatic escalation processes to solve strategic and operational disputes.
- Begin to craft a strategy for exit, based on regular feedback and evaluations of the portfolio.
4. Ongoing Management and Intervention
- Watch for signs of conflicting interests between partners (such as misalignment on objectives, strategy, and operations).
- Dedicate managerial time and attention to addressing challenges arising from colliding interests.
- Continuously measure performance, focus on delivering value to all partners, and plan to respond to eventual changes.
5. Exit Preparation and Support
- Decide on a mechanism for implementing the exit strategy. If the venture will continue, define options to buy or sell, bid mechanisms, and third-party-related rights; if the venture is to be dissolved, determine whether assets will be sold to investors or split between partners.
Our Proprietary Approaches, Data, and Tools
Our library of joint venture structuring and organizational case studies offers valuable insights into what it takes to effectively set up and manage joint ventures.
- Our Synergy Database houses synergy data from hundreds of BCG projects, providing customized benchmarks—based on analyses of variables such as company size, deal type, and attitude—for quickly estimating and validating potential synergies between joint venture partners.
- An Ongoing Monitoring System and Scorecard enables clients to spot and address early indicators of problems such as decision deadlock.
- Our Joint Venture Health Diagnostic lets clients rate themselves on eight factors critical to success—starting with how aligned the partners are on objectives, strategy, and operations, and ending with how well the partners can support success beyond the deal.
- Our iTSR service focuses on helping our clients align their business, financial, and investor strategies to deliver strong and sustainable value creation. It includes our proprietary Smart Multiple method for evaluating a joint venture portfolio and capital allocation.
- Our M&A, Transactions, and PMI Services, comprising more than 300 BCG experts, supporting business leaders of organizations that are pursuing mergers or takeovers, exiting noncore businesses, integrating acquisitions, seeking new joint ventures or alliances, or launching IPOs.
Our Diverse Industry-Specific Experience
From financial services, consumer goods, and telecommunications to industrial goods, health care, energy, technology, and more—our case teams understand the unique opportunities and challenges that joint ventures present in each industry. Drawing on their considerable industry expertise, they help clients seize the most valuable opportunities while surmounting the toughest challenges.
Our Joint Venture Consulting Work with Clients
Alliance Strategy
Designed a partnership model for a steel maker and a mining company seeking to unlock significant value by joining forces. Provided a sanitized financial model that helped the two companies calculate the prospective partnership’s value.
Designed a partnership model for a steel maker and a mining company seeking to unlock significant value by joining forces. Provided a sanitized financial model that helped the two companies calculate the prospective partnership’s value.
Partner Search and Negotiation
Helped a defense contractor deepen its understanding of the geopolitics shaping its market, prepare for negotiations with a local partner and government, and select a national strategic partner.
Helped a defense contractor deepen its understanding of the geopolitics shaping its market, prepare for negotiations with a local partner and government, and select a national strategic partner.
Setup
Helped two automotive OEMs set up multiple joint ventures aimed at creating a new global mobility ecosystem and technology platform. Facilitated a $1 billion investment program to support the effort.
Helped two automotive OEMs set up multiple joint ventures aimed at creating a new global mobility ecosystem and technology platform. Facilitated a $1 billion investment program to support the effort.
Ongoing Management and Intervention
Assisted a leading alternative investments firm in assessing its portfolio of joint ventures and restructuring partnerships as needed. Facilitated dialogue between conflicting parties in one partnership by seconding a BCG expert in the venture.
Assisted a leading alternative investments firm in assessing its portfolio of joint ventures and restructuring partnerships as needed. Facilitated dialogue between conflicting parties in one partnership by seconding a BCG expert in the venture.
Exit Preparation and Support
Supported separation of a decades-long joint venture comprising two health care players by facilitating negotiations until the partners agreed on a plan for dissolving the alliance and reintegrating assets into the two companies.
Supported separation of a decades-long joint venture comprising two health care players by facilitating negotiations until the partners agreed on a plan for dissolving the alliance and reintegrating assets into the two companies.
M&A Activity by Year: The BCG M&A Report Collection
BCG's annual mergers and acquisitions report covers M&A activity by year, the current state of the market, and perspectives on deal-making trends.
Our Insights on Joint Ventures
Article
February 23, 2024
If a joint venture isn’t delivering abundant value, it could be due to certain obstacles that are easy to overcome.
Article
July 18, 2023
A procurement partnership may take years to bear fruit, if it succeeds at all.
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