A joint venture is an agreement between two or more parties, to pool resources together in a specific business or project. This is characterized by sharing the business or project ownership, profits, losses, governance and taking risks together. Joining a joint venture is a very risky affair because they have a higher percentage of failing compared to other businesses. Some of the factors that lead to failure in joint ventures include; lack of proper agreement, lack of finances, control issues between the partners, compatibility between the partners, high and unrealistic expectations, pride and greed.
This perhaps is the biggest joint venture failure of all time. In the year 1957, ford reportedly invested $400 million into the production of the Edsel. The Americans, however, did not buy the car citing it as big and uneconomical. The Edzel was a high-end car, its failure was attributed to lack of defining its market niche before production by the executives. Three years later, Ford took the Edzel out of the market, marking it as the biggest failure in the joint venture history.
There was a lot of stiff competition in the year 1970 between the Betamax and VHS home video formats. However, Sony started selling the Betamax in the year 1975 when the VHS machines were introduced into the market. Although Sony was the proprietor of Betamax, the market for the VHS products steadily rose outdoing the Betamax market. The ubiquitous VHS simply outdid the superior Betamax. This went into the history of books as one of the biggest joint ventures of all times.
In the 1980s Coca-cola created the New Coke, a product that tasted like Pepsi in a bid to counter their rise in the market. A rise that was greatly attributed to the infamous Pepsi Challenge adverts. The New Coke did well in the nationwide taste campaigns before officially launching in the year 1985. Coca-cola renamed the New coke to Coca-cola Classic a few weeks after launching it because the campaigns had not translated into a success upon launching.
Pepsi A.M and Crystal Pepsi.
Pepsi A.M a breakfast cola drinker only lasted for a few months after being launched in the year 1989. This did not deter them from trying a new product that they hoped would be a much better success than the terribly failed Pepsi A.M. In the year 1992, they introduced the Crystal Pepsi, it did not do any better than the Pepsi A.M and was taken out of the market in the year 1993. Two major joint ventures failures in a span of three years. The Crystal Pepsi was re-introduced in the year 2016 and it failed to take off yet again.
This was a joint venture between the Japanese company Kinetic Honda and the India company. Suzuki wanted the complete control of the TVS Motors based in Chennai but the India company was hesitant. The chairman and managing director of the TVS Motors had built his company from scratch, they had launched several products that had become a success and was not willing to hand over his company to the Japanese. In the year 2001, the two companies parted ways, they realized major losses.