Investment Due Diligence
Joint Venture with market leader or niche player?
- Our client, the head office of an international pharmaceuticals company, had been in discussion about establishing a joint venture with the market leading Chinese company in the segment for several years, but the negotiations where making limited progress.
- To assess whether to continue discussion or start evaluating new partners and / or business models they wanted SSCO to conduct a stakeholder analysis and evaluate alternative types of partnership candidates.
To understand the motivation of different players SSCO conducted detailed interviews across the value chain addressing:
- Strategic priorities
- Distribution capabilities
- R&D pipeline
Based on early project findings the project scope was expanded to discuss partnership opportunities with other types of companies. SSCO’s support included:
- Identification of leading emerging companies in the segment
- Management meetings to understand their strategy and views on different types of partnerships.
- Combining the findings from several interviews it become clear that there was a disagreement on the benefits and commercials risks of a potential JV.
- SSCO presented a number of recommendations of how to address the risks perceived by the partner.
- At the same time our client also started evaluating partnerships with different types of companies, where the potential conflicts would not exist.