report on joint venture.docx

7/24/2019 report on joint venture.docx

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Global education at local cost, context and ethos

A Project Report

On

JOINT VENTURE of Max New York life Insrance an! Tata "o#oMo$

In partial flfill%ent of t&e re'ire%ent for t&e awar! of t&e

Un!er (ra!ate "iplo%a In

)inance Mana*e%ent

+,%itte! To-.

/010#ENTRE )OR PRO)E++IONA1 E2#E11EN#E

A/ME"A3A". +epte%,er.4567

+,%itte! ,8-.

"EEPA1I "/IN(RA

U("3M)

Roll No.59


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+YNOP+I+

I declare that the project entitled JOINT VENTURE submitted by me as a part of my

curriculum for the award of

"iplo%a in 3siness )inance at /010 #entre of Professional Excellence,

is the original work done by me and has not been submitted previously anywhere.


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#ONTENT+

+r0 No0 "escription Pa*e no0

6 ynopsis

4 !eaning of joint venture

: "istory of joint venture

9 #ypes of joint venture

7 $dvantages and %isadvantages of joint venture

; teps in formation of joint venture

< !ax new york life Insurance company ltd.

= #ata %o&o!o

> &onclusion

JOINT VENTURE

Meanin* of Joint Ventre-


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Joint Ventures and Alliances can deliver more shareholder value than Mergers and

Acquisitions can, but getting them off the ground can trip you up in unpredictable ways

''' "arvard (usiness )eview

A joint venture takes place when two parties come together to take on one project. In a joint venture,

both parties are equally invested in the project in terms of money, time, and effort to build on the

original concept. While joint ventures are generally small projects, major corporations also use this

method in order to diversify. A joint venture can ensure the success of smaller projects for those that

are just starting in the business world or for established corporations. Since the cost of starting new

projects is generally high, a joint venture allows both parties to share the burden of the project, as

well as the resulting profits.

Since money is involved in a joint venture, it is necessary to have a strategic plan in place. In short,

both parties must be committed to focusing on the future of the partnership, rather than just the

immediate returns. ltimately, short term and long term successes are both important. In order to

achieve this success, honesty, integrity, and communication within the joint venture are necessary.

$ contractual agreement joining together two or more parties for the purpose of executing a

particular business undertaking. $ll parties agree to share in the profits and losses of

the enterprise.

! Shared contribution of equity

! Shared authority, control and responsibilities

! Shared Revenues & Losses

! Shared Assets

/istor8 of Joint Ventres

A study published in Harvard Business Review in 2002 reveled that a

whoppin !"# of $oint ventures fail%%

Reason cited are:

ron Strateies

'nco(patible )artners


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ea* +anae(ent

nrealistic or inequitable -eals

The Real Reason

+ista*es done at the Launch )hase%%

.o(panies fail to co((it su/cient resources durin the launch phase

Lac* of attention durin the Launch )hase

' Strateic .onicts between partners

' 1overnance ridloc*s

' +issed operational Syneries

Launch Phase : between signing memorandum of understanding to rst 100 days

of operation

Joint Ventre #&allen*es

Buildin and (aintainin a strateic alin(ent between partners

.reatin a $oint overnance syste(

+anain the econo(ic interdependencies between the parent r( and the

$oint venture

Buildin the orani3ation of the 45

)uttin toether a ood (anae(ent tea(

-ecidin on all potential issues prior to operational launch

+trate*ic Ali*n%ent

6ach r( will have its own oals, (ar*et pressures, share holder7s

e8pectations etc9

:hese issues (ust be analy3ed and discussed in detail before the launch of 45

' hich +ar*et Se(ent;


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' .ash


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@9 Helps an orani3ation to enter in to new (ar*ets or new product lines

29 Access to increased resources and i(proved e8pertise & technoloy

9 Helps to build credibility with a particular taret (ar*et by choosin a well

established and credible partner in that (ar*et

!9 Reduces ris* involved in business due to sharin of losses and e8penses9

9 68itin fro( the business in case of failure is easier as co(pared to solely

owned businesses9

C9 )artners in 4oint 5entures et preference in buyin out the shares of other

partners and ta*e over the co(pany9

"isa!anta*es of a JV

6nterin into 4oint 5enture aree(ents (ay pose certain threats or disadvantaes

to the participatin orani3ations>

@9 't is ti(e consu(in and di/cult to set up a 4oint 5enture and poses (any

challenes9

29 :he ob$ectives of the 45 (ay not be clear and understood by all if the

partnerin orani3ations do not state and co((unicate the( clearly9

9 -iDerences in the cultures and (anae(ent styles of the orani3ations (ay

lead to a lac* of cooperation and coordination9

!9 Lac* of thorouh research and feasibility studies in the beinnin of the 45

(ay lead to failure of the 459

9 :he individual partners (ay not treat the 45 as an interal part of their

business and (ay lead to lac* of attention bein iven to the 45

C9 :here can be an i(balance in levels of e8pertise, invest(ent or assets

brouht into the venture by the partners

+teps in for%ation of Joint Ventre


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)lannin

)artner Search


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F9 Selection of partners for the feasibility study

Feasibility Study

)redication of the culture and structure of the 4oint 5enture

Analysis of partners co(fort with and adaptability to the new technoloy and

culture of the 45

Analysis of the authority, responsibility and nancial ains and loss sharin

a(on the prtners

+ar*et analysis and viability of the 45

Analysis of the sustainability of the 45 in ti(es of uncertainty

.ost Benet Analysis

6nviron(ental Analysis of the 45 in the (ar*et

1rowth )redictions

Incorporation

A 45 can be brouht about in the followin (a$or ways>

!


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9 45 should wor* towards the benet of all the partners

C9 )roper plannin and research prior to the incorporation of the 45

)actors &in!erin* t&e sccess of a JV

@9 Lac* of understandin between the partners

29 Lac* of patience and (otivation a(on partners

9 6ntry of a wholly owned subsidiary of a partner in the sa(e business and

(ar*et 6999 Hero HondaI

!9 Benets lower than the e8pectations

9 Eperational -i/culties due to eoraphical location of the partners

C9 -iDerences and conicts between partners on various issues9

"9 'nco(patibility of the culture and (anae(ent styles of the partner

orani3ations9


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+AJ K6 ERM L'


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Max New York Life

Insurance

Max New York 1ife Insrance #o%pan8 1t!0is a joint venture between ew 2ork 1ife3 a

4ortune 566 company and !ax India 1imited3 one of India7s leading multi'business corporations.

#he company has positioned itself on the 8uality platform. In line with its ision to ,e t&e Most

A!%ire! 1ife Insrance #o%pan8 in In!ia, it has developed a strong corporate governance

model based on the core values of excellence, honesty, knowledge, caring, integrity and

teamwork. #hestrate*8 is to esta,lis& itself as a Trste! 1ife Insrance +pecialistthrough a

8uality approach to business.

Incorporated in 9666, !ax ew 2ork 1ife started commercial operation in 9665. In line with its

values of financial responsibility, !ax ew 2ork 1ife has adopted prudent financial practices to

ensure safety of policyholder7s funds. #he &ompany7s paid up is )s. 5,:;9 core.

"aving set a3est in #lass A*enc8 "istri,tion Mo!elin place, the company is spearheading a

major thrust into additional distribution channels to further grow its business. #he company has

multi'channel distribution that includes the agency distribution, partnership distribution, banc

assurance, distribution focused on emerging markets and alliance marketing through employed

sales force. #he company currently has :: ,anc assrance relations&ipsB 69 corporate a*enc8

tie.ps an! !irect sales force at 69 locations0!ax ew 2ork 1ife has put in place a uni8ue hub

and spoke model of distribution to deepen rural penetration. #he company has ;< =< hub office

;6 spoke offices> offices dedicated to emerging markets in +unjab and "aryana. !ax ew 2ork

1ife offers a suite of flexible products. It now has :7 pro!ctscovering both life and health

insurance and ? riders that can be customied to over ?66 combinations enabling customers to

choose the policy that best fits their need. (esides this, the company offers @ products and :

riders in group insurance business.

#he company currently has more than 5;,9


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#OMPANY PRO)I1E

+a8 Kew or* Life 'nsurance

Max New York Life wants people to view

insurance as a nancial protection and

wealth creation instrument and not just atax-saving tool!

!ax ew 2ork 1ife Insurance &ompany 1td. is a joint venture between ew 2ork 1ife, a

4ortune 566 company and !ax India 1imited, one of India7s leading multi'business corporations.

#he company has positioned itself on the 8uality platform. In line with its vision to be the most

admired life insurance company in India, it has developed a strong corporate governance model

based on the core values of excellence, honesty, knowledge, caring, integrity and teamwork. #hestrategy is to establish itself as a trusted life insurance specialist through a 8uality approach to

business.

ew 2ork 1ife is a 4ortune 566 company that has over 5@6 years of experience in the life

insurance business. !ax India 1imited is a multi'business corporate dealing in &linical

)esearch, I# and #elecom ervices, and pecialty +lastic +roducts businesses.

!ax ew 2ork 1ife Insurance started its operations in India in 9666. It is the first life insurance

company in India to be awarded the I6


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there are more than :66 product combinations to choose from. #oday, !ax ew 2ork 1ife

Insurance has a network of AD offices spread over ;D cities all over India.

In line with its values of financial responsibility, !ax ew 2ork 1ife has adopted prudent

financial practices to ensure safety of policyholder7s funds. #he &ompany7s paid up capital is )s.

@AD crore, which is more than the norm laid down by I)%$.

!ax ew 2ork 1ife has identified individual agents as its primary channel of distribution. #he

&ompany places a lot of emphasis on its selection process, which comprises four stages '

screening, psychometric test, career seminar and final interview. #he agent advisors are trained

in'house to ensure optimal control on 8uality of training.

!ax ew 2ork 1ife, one of IndiaEs leading life insurance companies, expanded its presence in

the southern region by opening its first general office in the city of !ysore. !ax ew 2ork 1ife

now has established a countrywide network of 5D9 offices and representatives across 596 cities

in India. #he company has over 9A,;66 agent advisors, who are widely considered the best in the

business. !ax ew 2ork 1ife aspires to be the Flife insurance brand of first choiceF amongst

Indian consumers.

!ax ew 2ork 1ife wants people to view insurance as a financial protection and wealth

creation instrument and not just a tax'saving tool. ince the launch of our operations, our focus

has always been on providing risk protection and long'term wealth creation solutions to our

customers. Cith a diverse product portfolio to meet customer re8uirements, it is evident that we

are setting benchmarks in the marketplace and are well on course of realiing our vision to

become IndiaEs most admired 1ife Insurance &ompany.


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VI+ION-

0ision statement is Most A!%ire! 1ife Insrance #o%pan8 in In!iaC0

MI++ION:

(ecome one of the top 8uartile life insurance companies in India

(e a national player

(e the brand of first choice

(e the employer of choice

(ecome principal of choice for agents.

VA1UE+

! &aring

! "onesty

! -xcellence

! nowledge

! Integrity

! #eamwork


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S61+6K:'K1

:AR16:'K1

)ES':'EK'K1

+E(MENTIN(

! -e(oraphic> 't is basically on the basis ae of people, there fa(ily

bac*round and they do there nancial analysis9

! )sychoraphic> :hey also chec* the interest of people i9e which *ind of

insurance they want9

:hey are never preplanned that they will o and denitely sell the insurance

TAR(ETIN(

:hey follow the KE))>

! KNwho has the need for insurance

! ENopportunity


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! )Nthe person is physically t

! )Nthe person has the payin capacity i9e nancially ood

PO+ITIONIN(

! :hey believe in retainin there custo(ers i9e9 always ta*e care of old

custo(ers9

! :hey believe in after sales which help the( in positionin and re(e(berin

of there product or service9

! +outh to (outh publicity is the best for the(9

+?OT Anal8sis

+tren*t&s-.

! Stron corporate overnance (odel

! Ouality products

! Adaptability to chanes

! Stron Brand na(e

! Lare networ*s

! Leadin co(pany in insurance sector

! -iversication of funds

! ell 6/cient +anae(ent

?eakness-.

! Less awareness about all products of life insurance in (ar*et

! Low advertisin

!


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Opportnities-?

!


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TATA "O#OMO

A JOINT VENTURE 3ET?EEN

TATA

AN"

"O#OMO0


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#OMPANY PRO)I1E

! 'ndia7s (obile (ar*et is fastest rowin (ar*et in world9

!:A:A -E.E+E (ar*s a sinicant (ilestone in 'ndian teleco( landspace9

!:ata -o.o+o is the third larest teleco( networ* in the world9

!:A:A teleco( 'ncorporated in @GGC9

!:A:A -E.E+E is :ata :eleservices Li(itedQs ::SLI teleco( service provider

with the $oint venture of the :ata 1roupQs and K:: -E.E+E which ca(e into

e8istence on Kove(ber 200F9

!


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#o%panies %ost poplar a%on*st !ealers

0@0

20

0

!0

0

C0!F

!!!0

!!!F 0 !


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Most sol! Pro!ctD+erice ,8 "oco%o

0

@0

20

0

!0

0

2C@F @G

!@ !@

@

G

#rrent Ac&iee%ents

"ad the largest number of demand of I! &ards allover the state where an customer

statistics were taken as 56persons H min.

&heapest network cost ever.

(est coverage network

hort time famous firm.

&heapest 0$


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?&8 TATA *rop is sellin* TATA "O#OMO

$ccording to recent numbers published by the %epartment of #elecom, #ata #ele has net

worth of minus A,;:@.@A crore, which makes them a possible target for ac8uisitions. If 0odafone

buys #ata #ele, it will be IndiaEs leading player in terms of subscribers, overtaking $irtel.

$ccording to the -# report both #ata and 0odafone denied to confirm anything9

+O?T Anal8sis of Tata "oco%o

+TREN(T/+.

! 4lexible plans and )echarge offers,

! Good advertising,

! Good internet speed,

! Good distribution services,

! Good brand image of #ata %ocomo,

! $ffordable plans by common person,

! 2outh appeal,

! 4irst to launch per second tarrif plan,

! $bility to attract customers with various plans,

! +rices less than $lmost all the brands,

! *ne of the best networks providing ;G services,

! 4ast activating process.


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?eakness-

! ervice centre issues.

! imilar and monotonous plans schemes

! etwork issues

! 1ack of post'paid services.

! &ustomer services are not satisfactory.

! &omparatively less Incentives and commission offered to retailers

! Jntapped market of 1udhiana, $mritsar and other rural areas.

Opportnit8-

! 4ast expanding cellular market.

! 1atest and low cost technology.

! Jntapped other areas of +unjab' $mritsar and 1udhiana.

! 0alue added services.

! Introduce new plans for internet users.

! Introduce ;G in more regions.

! $ctivation process up gradation.

T&reats-

! (rand name of $irtel is inducing customers to choose it.

! +rice competition with 0ideocon, )eliance and (1

! !obile umber +ortability to other brands due to weak signal strength.


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#o%petitors-

! $irtel

! 0odafone

! Idea

! 0ideocon

! )eliance

! (1

+ccessfl Joint Ventres

0*10* K -I&"-) /0

#$#$ K %*&*!*

)aile! Joint Ventres

&hrysler K %iamler $G

2amaha K -scorts

JVs 1ea!in* to Takeoer ,8 one partner

"ero "onda =#akeover by "ero Group>

0irgin K #$#$ = #akeover by #$#$>


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#ON#1U+ION

1aunching and running a world class /0 is a complex and demanding task. If done right

/0 promises a better )*I than mergers and ac8uisitions.

It is necessary for all executives involved to understand the uni8ue demands of /0 and

invest in early planning

)ight investments during launch phase will reap big rewards

If you get the launch right, the rest will take care of itself

Documents

report on joint venture.docx