International Business: Joint Venture and Global Expansion

This document provides an overview of joint ventures in international business, focusing on the motivations behind their formation and the criteria for selecting foreign markets. It also discusses the decision-making process and the benefits and challenges of international strategic alliances for global expansion.

International Business

Executive Summary
Joint venture is that kind of venture that is been conducted between two or more than two
organization. In Joint venture all the burden is over both the parties regarding any kind of
emergency arise during the time of business. Also this venture helps an organization gain global
sustainability within market. The organization that has been taken within the file is M&S that is
an international retailer that sells all products for daily use of persons and individual. It is a
British organization that has its headquarters in UK, London. It is known for its products and
services that is been provided by them to its customers. In the following report characteristic of
joint venture is been explained that acts as its important towards an organization like M&S to
establish itself at global level. This purpose its is required to identify the market for which
factors like economy of place, geography and trends arising in it is been presented which helps in
selecting right market for establish globally. Then steps is been mentioned that helps in selecting
of right organization to perform venture. Also decision making and factors affecting it has been
explained. In the end advantage and disadvantages of joint venture has been explained.

Executive Summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Literature Review...................................................................................................................4
Demonstrate an understanding of the motivations behind the formation of International joint
ventures in the globalisation process......................................................................................4
Discuss the criteria that is utilised by firms in foreign market selection process...................6
Analyse the decision-making criteria that determine the suitability of the use of international
joint ventures..........................................................................................................................7
An evaluation of foreign market entry strategy options.........................................................8
Demonstrate an understanding of the suitability of international strategic alliances in global
expansion................................................................................................................................9
A critical assessment of the benefits and challenges of the use of international joint ventures
in foreign market entry.........................................................................................................10
Analysis and discussion........................................................................................................11
CONCLUSION..............................................................................................................................11
REFRENCES.................................................................................................................................13

INTRODUCTION
Globalization is the process by which interaction and integration within organization,
people, companies and government takes place all over world. This process helps a business in
making sure that it is able to attain name at global level. According to this expansion of growth
with interdependency in business with world's economies culture and population is possible. It
cross-border trade in goods and services, technology and flows of investment, people, and
information. Globalization has helped in making an organization attain its position within global
level market. Globalization has brought many changes in doing trade and business over globally.
This has made evolution of market possible. Scope of globalization is more wider as it helps in
making expansion of business at global level possible. Nature is dynamic as it consisits of unique
features that makes business to be established in market. Organization taken in the report is M&S
is an British retailer that has been established in the year 1884. It has its headquarters in London.
Things to be covered in this file is based over motivation over formation of joint venture, criteria
to make selection of foreign market. In the end theoretical is to be given upon expansion.
MAIN BODY
Literature Review
Demonstrate an understanding of the motivations behind the formation of International joint
ventures in the globalisation process
Joint venture: This is an business arrangement that is formed between two or more
parties agreed to pool resources in order to make a task with specification to be achieved. The
task can be a new project or any business activity. As per this each of participants holds
responsibility over any kind of profit and loss with cost that is to be bear by organizations. In
such kind of business venture with entity and separate formation of participants and other
business interest should exists. Joint venture is that kind of business which takes place when
there is common motive of both the parties this can be earning of profit and expansion of
business within a market. Motivation is the process by which business like joint venture can run
smoothly with cooperation and coordination. It is required to generate positive view point of
both the companies coming together to perform a business. M&S gets motivation form the joint
venture in a way that:

 It helps in speed up the process of business at global level which helps in enhancing
growth of business from every aspects. Scope is uplifted in a manner that wider area of
market is to be covered due to join venture (Rugman and Verbeke, 2017)
.
 Also various kinds of advantages like more workforce, employees satisfaction increases
and all parameters of international market is covered.
 Joint venture helps in making an organization like M&S to sells its products as per the
requirements of customers. This makes identification of needs and demands of customers
to be identified easily.
 Then this is helpful in making competitiveness to be increased as both the organizations
produces unique ideas that helps in making an organization attain competitiveness at
global level.
 It is also helpful in making product development possible as sharing of skills, knowledge
and technology takes place which makes innovation to be produced this results into
development of product with more effectiveness at global level.
 Form joint ventures different opportunities is generated which makes M&S to establish
itself in global market with positive impact on its business.
 Expansion of market development is done at faster rate this means that M&S because of
joint venture gains opportunity to makes faster development possible.
 As business for M&S increases which directly makes exports to be increased. As this
makes product expansion possible with its popularity at global level.
 Also diversity in workforce increases as workers of all class works together for making
an organization develop image at global level.
 Due to joint venture cash flow improves as selling increases of products sold by M&S.
This makes both profit and revenue generation possible at global level for an organization
like M&S.
 If joint venture is done then activities of organization improves which ultimately lead
over performing of activities in faster and effective manner.

These characteristics of Joint venture helpful for an organization like M&S to make itself
attain sustainability in market with more sustainability that leads over forming perfect joint
venture with employees.
Discuss the criteria that is utilised by firms in foreign market selection process.
Marketing selection has played an important role helping M&S in selecting of market at
global level. There are various kinds of things that is required to be kept in mind which makes
evaluation of markets possible while referring to certain criteria which makes resources and
objectives to be analysed. The process of selection has been explained as follows:
International Marketing Objectives: It is one of the first step which helps in
determining or assertion of export marketing objectives in an organization. As per this M&S is
required to make analysis of demand that has been arising within market. This helps in
understanding value of product in market.
Parameters for Selection: In this various parameters is been selected and measured then
evaluation is done over them. As per this factors like resources, environmental condition, market
situation and government policies is to be checked by M&S to make global establishment
possible (Li and Oh, 2016).
Preliminary Screening: The objective of this step is to make elimination of market with
no potential over parameters. In this M&S should keep in mind barriers that can make enter of
the organization difficult practices in market. These factors can be related to competitors existing
in market and rigid practices in market that can impact entry of an organization through joint
venture at global level.
Short Listing of Markets: Preliminary screening enables to eliminate markets which
obviously do not meet consideration at the very outset. There would be a large number of
markets left even after the preliminary screening. M&S is required to perform this in order to
reach to an conclusions that which markets are productive and non-productive.
Evaluation and Selection: In this after short-listing market its growth and sustainability
is required to be eventuated that is helpful for an organization like M&S to make correct
selection of market.
Test Marketing:Initially, the market is tested on a smaller scale by launching the product
in a part of the markets This provides a feedback to the producer about the market. At the same

time, it helps M&S's producer in assessing overall response of the consumers from a specific
market, after tested success, the production can be undertaken on a mass scale
Commercial Production: Once the product is tested "in the selected market, M&S
should starts its mass production and then minor modification is done to introduce product mix is
done which makes product to be establish itself in market (Jancenelle, Javalgi and Cavusgil,
2018).
Analyse the decision-making criteria that determine the suitability of the use of international
joint ventures.
Joint venture has enabled an organization for getting fast accessibility in market at global
level through distribution channels that educes production cost, acquiring new skills and
competencies. This has made obtaining of cutting edge through technologies at global level. Also
joint ventures offers possibility for an organization to increase profit margins, lower financial
risk, overcoming legal and trade barriers that is going to accelerate economic growth. Despite of
this significance is increased over international joint venture. M&S is required to use following
thing in the decision making process that is as follows:
Complementary resources and capabilities
In this step the organization is required to make resources and materials to be used which
makes capacity to increase of production. In order to select a partners their should be proper
qualification criteria that makes an organization like M&S to select only those venture which are
capable of handling global market.
Unique competencies
An important criterion for gaining and sustaining a competitive advantage is having unique
resources. That’s why companies like M&S should search for potential partners with unique
competencies that can be leveraged in the alliance to create greater economic value. When
evaluating a partner’s capability, managers. Unique competencies are abilities or skills possessed
by a partner but not by other firms (Holloway and Humphreys, 2019).
Goal compatibility
Each partner who has come in forming of joint venture should make sure that common
goals and objectives is been achieved by them should be common. This means that when a
venture formed between two organizations should hold common goal to be achieved. This is
helpful for M&S to attain compatibility over global market.

Financial resources
This plays an important role in making an organization like M&S attain sustainability in
global market. All finances that is divided in an organizations that has together formed venture
helps in making a backup for emergency of resources to be produced. This affects decision
making in positive way and pave way at global level for M&S to generate funds with the help of
other organization.
Human capital
Before making establishment of joint venture M&S is require examining skills and
experiences of those persons that are suppose to manage alliance from partner's side. This is
helpful for both organizations to learn and grow together by specializing capabilities within
them. It makes organizations attain better place at global market (He and Kyaw, 2018).
Organizational culture
This is one of the most important factor that is required to makes an organization attain
sustainability at global level. If two organizations forms joint venture with each other the there
culture gets affected. So, for this purpose M&S should make sure that all kind of core values are
protected and only basics values is changed. This makes an organization gain healthy working
environment for doing venture projects at global level.
An evaluation of foreign market entry strategy options.
As M&S is required to make its mark at global level it is required to use various
strategies for entering in foreign market and they are as follows:
Direct Exporting
According to this selling directly into the market is to be done by using first instance of
the resources used by an organization. M&S is required to establish sales program top turn
agents and distribution for representing them in future. Its agents are required to work closely
without representing interests. They acts as representatives at global level for M&S and handles
all kinds of distribution activities (Haile, Emmanuel and Dzathor, 2016).
Licensing
This is relative arrangement in which a firm transfers rights that are to be used for selling
of product and services to other firm. In this particular strategy is used for licensing over shares
in market at global level. An organization like M&S should keep arrangements and talk to the

organization with which venture is done with about selling and purchasing product at global
level.
Franchising
In this process market expansion is done over gaining traction in various parts of world. It
helps in making an organization like M&S to have relatable business mode. Two organizations
coming in venture with each other is required to develop a business model to attain growth with
brand recognizant at global level (Gulanowski, Papadopoulos and Plante, 2018).
Greenfield Investments
In this kind of investment it can be observed that it has its involvement international
business. As per this kind of investment land is been brought to open facility for operating
business. M&S has done venture then is required to buy a land and build new headquarters in
which both organizations employee's work with each other. Thought this is costly but effective
and helps both the organization to get known at global level in better and effective way.
Demonstrate an understanding of the suitability of international strategic alliances in global
expansion.
A global strategic alliance is been formed in order to make establishment of an
organization in order to make growth of business or new geographic market. This is done
particularly over place where exports is banned to protect domestic industry. Such alliance is
been typically formed within two or more business organization. Their main purpose is to
develop new style of ownership through ventures and maximizing competitive advantages in
strategies formed together. The cost of global alliance should be bear by both the organization at
global level. An acquisition has been offering faster start in making market to be formed at
global level. This alliance helps in gaining of competitive edge within market that makes an
organization like M&S to attain sustainability within market (Braunerhjelm and Halldin, 2019).
There are certain advantages that M&S should gain through such alliance and they are as
follows:
10 Advantages of the Global Strategic Alliance
 There are many specific advantages of a global strategic alliance and they are as follows:
 This makes speeding with instance access to be gained within the global market
 New opportunities are there to strengthen an organization like M&S to attain position in
market.

 In these sales is been increased over products that is to be sold by M&S at global level
 Also it makes skills and technology to be developed in more effective and better manner.
A critical assessment of the benefits and challenges of the use of international joint ventures in
foreign market entry.
International joint venture is that kind of venture that is been formed in order to make an
organization liken M&S develop business at global level. There are certain advantages and
disadvantages of joint venture and they are as follows:
Advantages of a Joint Venture in relation to joint venture are as follows:
New insights and expertise
Starting of joint venture provides opportunities that help in capturing market through
expertise. M&S attains this advantage through joint venture in a way that skills and knowledge
is been improved of the staff working in M&S (Boyce and Ville, 2017).
Better resources
Forming a joint venture is going to make accessibility over resources easy and better
manner. Also this makes technology to be enhanced in more effective way. M&S gain
advantage from this in a way that capital required is generated in appropriate manner.
It is only temporary
Joint venture is a temporary arrangement between organizations. This helps in gaining
competitive edge at global level within global market.
Both parties share the risks and costs
Risk factor is there within joint venture but the burden does not lie upon one
organization itself. The other organization also holds responsibility to handle risk. This makes
M&S attain stability within international market for longer period of time.
Disadvantages of a Joint Venture
Vague objectives
The objectives set by both the organizations are not clear in its terms that make people
involved within it. This makes M&S to gain uncertainty in global market the results into negative
impact over growth of market of M&S (Benito-Osorio and et. al., 2016).
Flexibility can be restricted

At times flexibility is not fully attained which makes rigidity to be developed that directly
stops profit generation and reduces ease in reaching to its customers. M&S develops loopholes in
its various process that makes it very rigid in developing strong market at global level.
There is no such thing as an equal involvement.
In this involvement is less of both the companies and also disagreement can take place which
ultimately results in making a venture collapse. M&S if does not cooperate with other
organization then there venture can be deducted due to conflicts or disagreements. This can be
understood with the help of example as given.
For example, Company A is working on the production process, whereas Company B is
responsible for the production, and Company C is in charge of planning and implementing
market strategies. Since Company A is not directly involved in the production and promotion
process, the pressure is on the latter companies. It will also affect individual businesses.
Great imbalance
As per this disadvantage an organization is required to work together and has various
kind of difference in their net worth. This can negatively impact the efficiency of joint venture.
So, if M&S comes into venture with an small organization then chances are high that venture
does not last for long (Bengoa and Kaufmann, 2016).
Analysis and discussion
The above discussion has shown that joint venture is one of the most impactful things
that help an organization like M&S to expand itself in global market. Also it can be observed that
certain process is there that has been helping in doing selection about the kinds of market that
M&S is searching for and has helped M&S to make decision making more strong. Also
advantages and disadvantages discussed that has helped M&S know impact of Joint venture.
CONCLUSION
From the above discussion it can be concluded that joint venture is that kind of venture
that is been formed between two parties in order to achieve common goal achieved by them.
Further file is based upon making an organization seek about selecting market helpful in making
it established of it possible at global level. Then process is been discussed which makes
identification of correct organization to be ventured with all this helps an organization to make

correct choice about the organization as per requirements of market. Further strategies has been
discussed that makes an organization develop sense of responsibility required to make it
established at global level. Then statistic alliance is been discussed with its advantages over the
organization. In the end an critical analysis done over both advantages and disadvantages of joint
venture in relation to organization that has been taken.

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