What is the joint venture model?

A joint venture refers to various forms of organizational arrangements made by two or more unrelated natural persons or legal persons in order to establish and operate any form of commercial projects or enterprises. The contents of a joint venture are very extensive. Generally speaking, joint ventures can be divided into the following three categories: joint ventures, partnerships and contract enterprises. A joint venture company refers to a joint venture between enterprises or between enterprises and institutions to form a new economic entity, which independently bears civil liability and has legal personality. Approved and registered by the competent authority, and obtained the legal person qualification. Partnership refers to the joint venture between enterprises without legal person status or between enterprises and institutions. The parties to the joint venture shall bear civil liability with their own or managed property in accordance with the proportion of capital contribution or agreement, and shall bear joint liability in accordance with the provisions or agreement of the law. The concept of joint venture first appeared in the field of engineering and construction, and later it was also applied in other fields. Legally speaking, joint venture has become a very standardized concept. The emergence of joint venture business model can be said to be not an accidental phenomenon, but an inevitable product of the development of channel competition to a certain stage. Because both self-management and franchise modes have their own defects, they will inevitably encounter many thorny problems in the operation of regional markets. For manufacturers, the investment risk of self-operated mode is relatively high, and the management of opening branches, offices and self-operated stores in different places is also complicated. However, due to the strength of franchisees, brand awareness, investment and management support from manufacturers, the franchise model is prone to passive situations such as insufficient regional market development or "relying on the emperor to make princes" after strong distribution strength. The joint venture model binds the two manufacturers together, which can effectively solve some common problems such as out of stock, inadequate management, lack of funds and fragmented management. Advantages of joint ventures. The joint venture model organically binds the responsibilities and rights of both parties. A basic problem that has not been effectively solved in China's enterprise marketing is the contradiction between manufacturers, and the core of the contradiction between manufacturers is the conflict and balance of interests, especially the conflict of unequal responsibilities and rights, the conflict of asymmetric information and so on. The previous joining relationship was a game relationship based on the interests of both parties. If one party's interests are destroyed, it will not hesitate to abandon the other party. From the day of its birth, a joint venture is destined to be a community of interests for producers and distributors. Second, the joint venture model effectively avoids the risks of both manufacturers and distributors. The operating funds of the joint venture company are jointly controlled by both parties, which avoids the risks of both manufacturers and distributors. In a sense, the publisher's funds and social funds are also used to ensure that the producers will not have cash flow problems. Third, the joint venture model effectively solves the conflicts between channels. The conflict among channels, terminals and prices is a common problem in channels. The commodity flow caused by the price difference is the cause of natural distribution. The flow and overlapping coverage of goods between regions are inevitable to some extent, which leads to confusion and unfair competition in channel management. The joint venture model strengthens the function of supervision and management, and controlling "goods smuggling" is one of its main purposes and responsibilities. Effectively solve all kinds of conflicts and contradictions in the channel. The disadvantage of a joint venture is a consortium of interests. Since there are interests, there are bound to be some problems and contradictions. If some problems are not carefully solved, the most direct consequence is the disintegration of the joint venture, or even the court. In many places, due to different interests, too many members and chaotic management, joint ventures finally broke up in discord. A clothing manufacturer and customers jointly operate the Hunan market. Manufacturers provide goods support, and dealers are responsible for specific operations. The dealer's management was lax, and the payment of 300,000 yuan was taken away by a business person with bad conduct, and the report was inconclusive; However, manufacturers are unwilling to bear the losses, thinking that it is entirely caused by the lax management of dealers, and dealers should take full responsibility. The dealer believes that both parties have the obligation to take responsibility for the loss, so the two sides have conflicts and broke up in discord. Since the joint venture is the integration of superior resources of both sides, both sides have great expectations, and the higher the expectations, the greater the disappointment. Once it is poorly managed for market reasons, it will often lead to many contradictions accumulated in the past. Contradictions are everywhere, all the time, mainly depends on how to understand and analyze contradictions, and how to solve contradictions is the key to the problem. What will happen to the joint venture model? First, the question of resource input. In terms of resource investment, it is easy to have problems, especially additional investment, and one of them is unwilling to invest, which often leads to contradictions. Second, the distribution of benefits. As a community of interests, the two sides will inevitably have some contradictions in the distribution of interests. Third, the issue of power distribution. Both partners want to gain more voice and have more ability to dominate the market. Because the one who lacks power is always worried that the other party will kick down the ladder when it is done. Fourth, the issue of responsibility sharing. Some of the responsibilities of both parties are not clearly defined in advance, and they pass the buck when things happen, which leads to problems. Especially when the losses or gains are not good, contradictions will break out between the two sides. 5. Brand promotion. Manufacturers are often willing to do more brand promotion and promotion from the perspective of long-term interests, while dealers only pay attention to immediate interests and are unwilling to do big brand promotion and promotion. Sixth, the problem of management monitoring. Whether the trader is the general manager, appointed by him or a professional manager recruited from the talent market, there is a problem of supervision and control. In fact, a key factor in the success or failure of a joint venture depends on the choice of traders. Sixth, personnel management. Because of different positions and different stakeholders, the employee relationship between manufacturers and distributors is sometimes subtle, and the contradiction between people will lead to more work contradictions. Eight, the problem of breach of contract. One party in a joint venture violates the agreement of both parties without authorization, or takes some improper ways to plunder the wealth of the other party. It will inevitably make the other party dissatisfied. There will inevitably be some problems in the operation of the joint venture model. How to effectively solve these problems and make the joint venture mode work normally? This is a problem that everyone cares about and thinks about. The key factor for the success of a joint venture If a business model wants to succeed, there must be common rules to follow. What are the key factors for the success of the joint venture model? Honesty is the cornerstone of the success of the whole society and joint ventures. Specifically, the key factors for success are as follows. 1. Establishing an effective benefit distribution mechanism is the primary key factor for the success of a joint venture, which plays an irreplaceable role in the construction of the business model of the joint venture and can stimulate the initiative, enthusiasm and creativity of all the staff of the joint venture. The so-called effective benefit distribution mechanism means that benefits can be distributed fairly, reasonably and scientifically. To measure the effectiveness of the benefit distribution mechanism of a joint venture, we should examine the following factors. First, is this mechanism conducive to stimulating the enthusiasm, initiative and creativity of all members of the joint venture? Second, can this benefit distribution mechanism reflect the social value concept of "people-oriented" and be relatively fair and just? Third, does this benefit distribution mechanism advocate and encourage legal competition? Second, how to establish a strict corporate governance structure and improve the corporate governance structure of joint ventures? It is to standardize the rights and responsibilities of shareholders' meeting, board of directors, board of supervisors and managers in accordance with the requirements of modern enterprise system, and improve the employment system of enterprise employees. The shareholders' meeting decides the members of the board of directors and the board of supervisors, and the board of directors selects managers, who use human rights to form a checks and balances mechanism among power organs, decision-making organs, supervision organs and managers. According to the requirements of modern enterprise system, several practical problems need to be solved to improve the corporate governance structure of joint ventures. The first is to ensure that ownership is in place. This is an important condition for effective corporate governance. Without the incentive and restraint of the owner, it is difficult to avoid the abnormal behavior of other participants in the joint venture, and the owner's own rights and interests can not be guaranteed. The second is to standardize the rights and responsibilities of the shareholders' meeting, the board of directors, the board of supervisors and the management of the joint venture. Shareholders do not directly hand over the management right of the joint venture to the general manager, but entrust the company to the board of directors with decision-making and supervision ability. Entrusted by investors, the board of directors is mainly responsible for ensuring the long-term interests of the company. The most important function is to appoint and replace the company's top management, make strategic decisions, supervise the management's work, evaluate the manager's performance and decide his salary and stay. The board of directors must also ensure that the operation of the enterprise complies with all laws and regulations, including being responsible for the authenticity and legality of financial reports. The board of directors is the core of corporate governance. Therefore, it is necessary to optimize the board structure, including the establishment of external directors and independent directors; Establish audit committee, nomination committee, remuneration committee, etc. , mainly composed of external directors and independent directors. It is necessary to emphasize the independence of the board of directors and strengthen the personal responsibility of directors. Third, the company's goal must focus on the return on investment. Only in this way can we establish the hard constraint of financial budget and accurately evaluate the company's operating performance. The fourth is to establish a mechanism for selecting and employing people with error correction function. The responsibility, power and checks and balances of a joint venture are mainly realized by controlling personnel at all levels. Implement responsible and strong constraints, find problems in selecting and employing people in time, and correct them in time. Therefore, we should actively explore a new mechanism for selecting and employing people that meets the legal requirements of the company system. Organizational assessment is combined with introducing market mechanism and open recruitment for the society. The fifth is to improve the transparency of the company and strengthen the timely release and transmission of information. Third, establish an effective mechanism for selection, assessment and supervision of professional managers. The ideal employment mode of joint venture is to employ professional managers, but it is necessary to establish a standardized professional manager mechanism including selection mechanism, incentive mechanism, supervision mechanism and evaluation mechanism. The selection mechanism means that in a joint venture, the board of directors must be selected and appointed through the manager talent market under the guidance of the principles of openness, fairness and justice; The incentive mechanism is to make the remuneration of managers who are good at management and have remarkable benefits significantly higher than that of ordinary employees, so that they have an internal motivation to be conscientious and conscientious. We should also create a good working environment and conditions for them, and stimulate their sense of mission and desire for success in running a good enterprise from social honor, material life and other aspects; The supervision mechanism is to give them authority, but also to form an effective supervision mechanism. Generally speaking, the supervision mechanism of professional managers mainly comes from four aspects: first, the supervision of national laws and regulations, economic policies and financial accounting systems; Second, the owners or investors supervise the profitability of assets and the fluctuation of stocks through the shareholders' meeting, the board of directors and the board of supervisors; Third, consumers supervise commodity prices through market mechanisms; Fourth, the employees of this enterprise are supervised by their own representatives in the shareholders' meeting, the board of directors, the board of supervisors and various democratic management committees; The evaluation mechanism should objectively and fairly evaluate the job performance of professional managers, and provide scientific basis and standards for the formation of selection, incentive and supervision mechanisms. Fourth, unify brand integration communication actions. If a joint venture wants to succeed, it must realize brand channelization and channel branding. Brand channelization is to implement the brand of the manufacturer in every detail of everyone who runs through every link of the channel, and use the brand to standardize and unify the behavior of all channels; Channel branding is to plan and manage the channels of joint ventures according to the requirements of brands. All joint ventures in China must formulate a unified brand integration communication plan, and unify brand core values, brand slogans, advertising language, VI visual identity system, etc. V. Unified values and behavioral norms A joint venture is a strategic alliance formed by manufacturers and distributors, which turns the past interest transaction relationship into a strategic competitive partnership and the past trade marketing into the present partner marketing. The first principle of joint venture values is to ensure that the values correctly reflect the long-term goals of the joint venture. As values are the core culture of joint ventures, they play a great role in the long-term development of enterprises. The determination of joint venture values should truly reflect the company's long-term goals and have internal consistency, thus guiding and inspiring everyone. The second is to ensure that the values correctly express the industry characteristics of the joint venture. The industry characteristics, product characteristics, brand attributes and employee characteristics of joint ventures are all important factors affecting the characteristics of values. The above factors should be organically integrated into the values of the joint venture. Third, persistently instill the values of joint ventures. Constantly instill the excellent values of the joint venture into all members of the joint venture through various means, so as to "sneak into the night with the wind and moisten things quietly." The fourth is to ensure that all elements of joint venture values can be clearly translated into actions. If the values of the joint venture cannot be translated into the actual actions of each member of the joint venture, it is just an empty slogan. No one will be convinced if no one carries it out. Fifth, adhere to inspection and supervision. Management must set an example and take the lead in implementation to convince ordinary employees and guide them to act according to the requirements of core values. In the long run, the company's core values can be internalized into the personal values of each employee and further customized. Regular inspection and supervision, at this time, the values of the joint venture can play the greatest role in management.