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Best Of The Lot

BT receives scores of responses to its case studies. Below is the best one on the Eicher-Volvo tie-up (June 23, 2013).
Roy D. Rozario        Print Edition: Aug 18, 2013

BT receives scores of responses to its case studies. Below is the best one on the Eicher-Volvo tie-up (June 23, 2013).
 
The Eicher-Volvo joint venture (VECV) is high on the initial mandate of the 4Cs of partner fit. Both Eicher and Volvo converge in their interest in scaling up their volume in the commercial vehicles industry. The complementing strengths are so perfectly aligned that they weed out each partners' weakness. And as evinced from the revenue growth, both partners seem compatible. Volvo's global distribution network, technology and financial muscle were just what Eicher needed to leverage its mass-market products with frugal engineering that is important in an emerging market like India. The synergistic strengths of this joint venture have the potential to overpower rivals such as Tata Motors, Ashok Leyland and Daimler. Volvo could use Eicher's brand name in developing markets, and could enter South East Asian markets with the joint venture model. This joint venture model is an excellent example of matching complementing strengths. This model could be adopted across other verticals. However, as with any joint venture company, long-term prospects are still hazy - consider the erstwhile Hero Honda and TVS Suzuki. And because there is an asymmetry in investment in VECV, this could pose problems in decision-making, division of profits, and so on. Thus, on paper, the VECV is an ideal amalgamation of strengths. The main concern would be long-term mutual viability for its members. Thus, it would be better for both partners to plan exhaustive agreements that are mutually beneficial.

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