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The Science of Alliances: Success factors in Joint Ventures and Strategic Alliances

The increasing trend of Joint Ventures and Strategic Alliances (JVSAs) represents a shift in the mindset of leading companies on how they seek growth, collaborate and compete in this constantly changing complex business environment.

A wave of new announcements in 2015 by companies such as AstraZeneca, BAE Systems, BP, Diageo, National Grid, Rolls Royce and Unilever further underline the extent to which JVSAs have become a significant feature of the UK corporate landscape. At the start 2015, 46 per cent of UK CEOs surveyed by PwC, from a wide range of industries, said they were planning to enter a new JVSA – up from 44 per cent in 2014.

There is a marked increase in more growth-oriented JVSAs across a wide range of industry sectors

There are four primary motivations for entering into a JVSA:

  1. JVSAs are an attractive (and in some cases the only) vehicle to enter new markets
  2. It provides an opportunity for organisations to grow by moving into adjacent industry sectors
  3. JVSAs enable organisations to find suitable partners that bring complementary capabilities that can help both parties to grow further, faster
  4. The benefits of a vertically integrated model are also cited as another strategic driver

Success factors and pitfalls with JVSAs

JSVAs are certainly emerging as a key part of UK companies’ growth strategies. However, our research shows that over half of all alliances fail, delivering financial damage for both parents. Poor implementation accounts for 86 per cent of failures. Moreover, the average duration of an alliance is four years with as many as two-thirds ending within two years of formation.

Read our recent report, The Science of Alliances: Success factors in Joint Ventures and Strategic Alliances, to explore the seven drivers of JVSA success.

Contact us

Philip Bloomfield

Partner, PwC United Kingdom

Tel: +44 (0) 7703 501895

Ken Walsh

Head of Deals, PwC United Kingdom

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