success stories of jv

7/29/2019 Success Stories of JV

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JOINT VENTURE AND ACQUISITION

SUCCESSFULL STORIES OF JOINT VENTURE

SUBMITTED TO: AN EFFORT BY:

Mr. Abdul Salam Sait Manish Prakash Dungdung

Associate Professor Manjeet PradhanDFT, Chennai Siddharth Manu


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The license raj that existed prior to economicliberalization (1940s-1980s) in India did notallow foreign companies to enter the market.

In the mid-80s when the Indian governmentstarted permitting foreign companies to enterthe Indian market through minority jointventures.

The entry of these new foreign companiestransformed the very essence of competitionfrom the supply side to the demand side.


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Hero Cycles manufactured Over 16000 Bicyclesa day.

They Sold about 86 million bicycles in

aggregate as of 2002. They had nurtured an excellent network of

dealers to serve Indias expansive markets.

Over the years Hero Group had enteredmultiple business areas.


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Honda agreed to provide tech. know-how toHHM and setting up manufacturing facilities.This included the future R & D efforts.

Honda agreed for a lump sum fee of $500,000& 4% royalty on SP.

Both Partners held 26% of the equity with other26% sold to the public and the rest held tofinancial institutions.


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HHM had grown consistently, earning the titleof the worlds largest motorcycle manufacturerafter having churned out 1.3 million vehicles in2001.

Worlds largest two-wheeler manufacturerwith annual sales volume of over 2 millionmotorcycles.

Owns worlds biggest selling motorcycle brand Hero Honda Splendor.

Over 9 million motorcycles on Indian roads.

Deep market penetration with 5000 outlets


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Maruti Udyog Limited (MUL) : established inFebruary 1981, though the actual productioncommenced in 1983 with the Maruti 800, based onSuzuki alto kei.

Maruti Udyog Limited was renamed as MarutiSuzuki India Limited. (17 Sept. 2007,)

The company's headquarters are located at Plotno.1 Nelson Mandela Road, Vasant Kunj, New

Delhi-110070. It has two plants for Manufacturingfacility:-

Gurgaon Manufacturing facility

Manesar Manufacturing facility


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Maruti Suzuki is India and Nepals leadingautomobile manufacturing company and themarket leader in the car segment both in terms ofvolume of vehicles sold and revenue earned. Until

recently, 18.28% of the company was owned bythe Indian government and 54.2%by Suzuki of Japan. The BJP led government heldan initial public offering of 25% of the company in

June 2003. As of 10 May 2007 Govt. of India sold itscomplete share to Indian financial institutions. TheGovt. of India no longer has stake in MarutiUdyog.


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Relationship between the Government of Indiaunder the United Front (India) coalition and SuzukiMotor Corporation over the joint venture was apoint of heated debate in the Indian media tillSuzuki Motor Corporation gained the controllingstake. The success of the joint venture led Suzuki toincrease its equity from 26% to 40% in 1987, andfurther to 50% in 1992. In 1982 both the venture

partners had entered into an agreement tonominate their candidate for the post of ManagingDirector and every Managing Director will have atenure of five years.


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As of 31st March 2011 Maruti Suzuki has 933dealerships across 666 towns and cities inall states and union territories of India. It has

2,946 service stations (inclusive of dealerworkshops and Maruti Authorized ServiceStations) in 1,395 towns and cities throughoutIndia.It has 30 Express Service Stations on

30 National Highways across 1,314 cities inIndia.


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Sales Turnover- 36299.74 (in crore)

Net Profit- 2288.64 (in crore)

Earning pr share - 79.21

Market Share- 50% (2010)

Till March, 2011 Maruti Suzuki had 44.9% ofMarket share.


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Sony Corporation and LM Ericsson announcedthat they have agreed terms to merge theirmobile phone businesses worldwide on 1st

october 2001 , subject to final approval of theBoards of the two parent companies andsubject to regulatory approvals.


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Ericsson is shaping the future of Mobile andBroadband Internet communications throughits continuous technology leadership.

Providing innovative solutions in more than140 countries, Ericsson is helping to create themost powerful communication companies inthe world.


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Sony Corporation is a leading manufacturer ofaudio, video, game, communications andinformation technology products for theconsumer and professional markets. With itsmusic, pictures, computer entertainment andon-line businesses, Sony is uniquely positionedto be a leading personal broadbandentertainment company in the world. Sony

recorded consolidated annual sales of nearlyUS$ 60 billion for the fiscal year ended March31, 2001


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The joint venture's global management wasbased in London and, after necessaryapprovals, Sony and Ericsson started to mergetheir respective operations. Sony EricssonMobile Communications began its activity withglobal product, marketing and sales operationsand an initial workforce of 3,500 employees.On a pro-forma basis, the combined mobile

phone businesses achieved annual unit sales ofapproximately 50 million units and sales ofUSD 7.2 billion last year.


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THANK YOU!!!

success stories of jv

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