More than 5,000 joint ventures, and many more contractual alliances, have been launched worldwide in the past five years.
Our analysis of 60 leading firms across the automotive, aerospace and defense, chemicals, energy, industrial, and mining sectors shows companies that are more active in managing their portfolios of material JVs and non-equity partnerships are more likely to meet or exceed industry-average return on capital. Rather than revealing corporate weaknesses and strategic missteps, firms that actively shape and reshape their JVs are tapping into sources of competitive advantage. This research also extends our prior findings that joint ventures undergoing at least one major restructuring are twice as likely to achieve their strategic and financial objectives, generating 10 to 30% performance improvements on average.
Read the full article originally published in the Harvard Business Review.