Throughout the business landscape, many decisions must be made, both big and small. The chance for success increases when businesses are positioned strategically. Companies that evolve with their industry maintain unified teams and clearly-stated goals.
Below, we discuss scenarios in which shaping a joint venture strategy is essential.
Significant developments surrounding the joint venture
Joint ventures are normally steady for the few years after establishment. However, significant modification of laws, advancement in tech, and the sprout of new competitors can become obstacles in growing the business. Firms must choose whether or not to compete in the latest segments.
Additionally, owner or parent companies’ positions can shift, requiring modifications to the joint venture. New strategies may also be required following the success of the JV against its initial objectives and scope or, contrastingly, if the market plunges.
Important investment decisions
Strategy conversations are often forced by significant investment or acquisition decisions. It can take years for boards, shareholders, and owners to make finalizing decisions. Uncertainty and inability to come to a decision can cause a major stall in productivity and growth of the company - which counter the whole purpose of the decision.
Maintaining an aligned leadership team is essential to working efficiently, negotiating, and agreeing on major business decisions together. Compromise and unity stem from cultivating a team that understands the company’s current situation and the level of growth the firm hopes to achieve.
Frequent changes and arrangements
Sometimes the strategic evolution path that’s needed is a gradual one. The big events will at least capture the attention of board members, and are hard to ignore or defer, since there is usually some real and immediate risk to the JV’s business, or green-light needs to be given for a big project.
However, many joint venture business development teams have burned out after detailing the newest plan for a moderate business step-out or a new product, only to see their hard work gather dust after a polite but inconclusive debate. Sometimes focusing on details and small shifts or changes save departments time, money, and effort to only focus on approved strategies. Incremental and frequent strategy decisions can be integral to the long-term success of the company in an updated industry with new competitors.
Periods of adversity and disruption can be rich in opportunity. A strategic evaluation and repositioning of a joint ventures strategy can strengthen the company and create new opportunities for growth.