Benefits and risks faced when entering international market as joint venture

Running head: MARKETING
Marketing
Name of student
Name of University
Author note

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Table of Contents
Chapter 1: Introduction..............................................................................................................3
1.1 Research background........................................................................................................3
1.2 Rationale of the research..................................................................................................4
1.3 Research aim....................................................................................................................5
1.4 Research objectives..........................................................................................................5
1.5 Research questions...........................................................................................................5
Chapter 2: Literature review......................................................................................................6
2.1 Entry modes for penetrating international markets..........................................................6
2.2 Benefits of entering international market as a joint venture.............................................7
2.3 Risks of joint venture as a market entry mode to the international market......................8
Chapter 3: Research methodology.............................................................................................9
3.1 Research philosophy.......................................................................................................10
3.2 Research design..............................................................................................................10
3.3 Sampling method or technique.......................................................................................11
3.4 Data collection................................................................................................................11
3.5 Data analysis...................................................................................................................12
3.6 Values and ethics............................................................................................................12
Chapter 4: Results....................................................................................................................13
Chapter 5: Conclusion and recommendations..........................................................................25
Chapter 6: Reflections..............................................................................................................27
References................................................................................................................................28
Appendices...............................................................................................................................31

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Research title: Benefits and risks faced when entering international market as joint
venture
Chapter 1: Introduction
The research is done for the purpose of assessment of risks and benefits associated
with the entry into the international market as a joint venture for Mulberry Company in
United Kingdom. The research study will also highlight the importance of managing
internationalisation by focusing on the entry into the foreign marketplace (Killing 2013). The
increased globalization and market internationalisation are considered as the major reasons
for the company to enter the international market, furthermore, attain global success all
throughout.
1.1 Research background
The research background highlights the importance of managing internationalisation and
at the same time, allow the researcher to shed light on the benefits as well as the risks
associated with the entry into the global market segments for Mulberry Company in United
Kingdom. The background of the research also focuses on how the management of joint
ventures within the fashion industry can benefit the company to become accustomed with the
foreign culture, furthermore, deal with the issues and challenges that may be faced during the
global business expansion (Eriksson et al. 2015). The purpose of the research has also been to
evaluate the strategies related to the joint ventures that are responsible for expanding into the
global marketplace with ease and efficiency. The background of research also illustrates
about the various scopes and opportunities acquired by the organisation to make an entry into
the international market with the management of joint ventures (Gabrielsson and Gabrielsson
2013). To become successful in the global marketplace, the company needs to expand its
business by enhancing the scale of operations and processes, furthermore, ensure meeting the
global marketplace needs and expectations in the marketplace.

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1.2 Rationale of the research
The rationale of research demonstrates the problem of the research, i.e., the problems and
issues that are associated with the entry into the foreign marketplace. The problems faced
while entering the foreign market could be lack of resources, inability to adopt to the foreign
culture and also being unable to understand the demands and expectations of the clients
(Johanson and Mattsson 2015). There are risks associated with the joint venture management
such as the lack of clear goals and objectives and even communicating the messages to
everyone while the opinions and views of the two partners involved with the business’
entering into the foreign marketplace could also differ. The risks of different management
styles and cultures also could result in lack of integration along with poor coordination,
which might even create complexities for Mulberry Company while entering the entering
international market as joint venture (Malhotra and Gaur 2014). On the other hand, there are
other risks that are associated with the foreign market entry during globalisation management
such as the political risks, inability to implement the right trade laws, rules and regulations
along with maintaining a legal system properly can be a daunting task too. While entering a
new foreign market, the change in banking laws, rules and regulations can also limit the
accessibility to funding and thereby deteriorate the organisational capability to gain success
in the International business environment (Alam et al. 2013). The different currency value
and fluctuations in the foreign country’s currency can also lead to various issues and
complexities, thereby reduce the working capital for Mulberry Company in UK to enter the
foreign market segments easily. Not only does the research highlights the risks associated
with the foreign market entry as a joint venture, but also there are certain risks associated
with the research including the authenticity of information, lack of accessibility to genuine
and accurate data, improper relevance in the research proceedings (Meschi and Wassmer
2013).

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1.3 Research aim
The aim of the research is to determine the benefits and risks that are related to the
entry into the international market as a joint venture for Mulberry Company, UK.
1.4 Research objectives
The objectives are framed according to the aim of the research and are as follows:
 To identify the benefits or advantages associated with the international market entry
for Mulberry Company
 To evaluate the various risks and complexities that might emerge while entering the
international market as a joint venture for Mulberry Company
 To assess the probable impacts that might be created on the business due to working
as a joint venture while entering the new global marketplace
 To recommend necessary measures for reducing the chances of risks and ensure
smooth entry into the international market for Mulberry Company, UK
1.5 Research questions
What are the various benefits that can be attained while making an entry into the international
market for Mulberry Company?
How can the risks of global market entry as a joint venture be evaluated for the company?
How does the working as a joint venture for Mulberry beneficial for making entry into the
international market with convenience?
What are the various measures recommended for making sure that the international market
entry related risks are reduced to a large extent?

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Chapter 2: Literature review
2.1 Entry modes for penetrating international markets
There are various modes of entry into the foreign markets such as the exporting,
licensing and franchising, joint venture or partnership, acqusitions and launch of a wholly
owned subsidiary. There are many businesses who have focused on the exporting for the
purpose of expanding into the foreign market, furthermore, ensure preventing any kinds of
expenses associated with the business functions and processes to be managed at the new
nation where the businesses aim to enter (Capaldo 2014). To manage this kind of market
entry mode, the businesses need to market the products and services in the new nation and at
the same time, developed contractual agreements with another business from the new market
to adopt with the local conditions. The packaging, labelling and pricing aspects have been
considered by Sun and Lee (2013), who stated that the marketing and promotions have been
possible with the help of trade shows, advertising, promotions and by managing local sales
force. The licensing approach to market entry has helped in managing patents and copyrights
along with providing licenses to the implementation of new technologies for ensuring that the
business gain access to technological resources while operating in the international market
with ease and effectiveness (Sun and Lee 2013).
The management of a joint venture, also known as partnering in business or strategic
alliances, according to Carnovale and Yeniyurt (2014), has been another effective way of
making an entry into the foreign market with the development of a contractual agreement
between two or more businesses. According to Dhir and Mital (2013), the joint venture has
been a better market entry mode, because of the business’ ability to partner with a local
business in the foreign location, which has helped in understanding the foreign culture of the
place, the market conditions and also the various approaches that could be beneficial for
operating in the international market (Dhir and Mital 2013). The contractual agreements

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managed during joint ventures have also been beneficial for the management of working
capital and also the different kinds of assets required to develop new markets, furthermore,
share ownership and control. Choi and Beamish (2013), also argued that while the foreign
business contributed largely to the working capital and technological resources, the local
business partnering with the foreign business focused more on gaining knowledge about the
local market and ability to access it. The joint ventures have also helped in delivering the
partner’s products and services to the existing clients and even focus on conducting research
and development for the purpose of ensuring fulfilment of need and expectations of the
clients in the new international market too (Choi and Beamish 2013). There are also
acqusitions that enabled a business to acquire a small business in the international market for
adopting to the local culture and ensure meeting the demands and expectations of the clients
in an effective way too. The cross borer acqusitions have also helped in increasing the market
value for the business that has been acquired, which also ensured working together for the
accomplishment of international business goals and objectives effectively (Chang et al.
2013).
2.2 Benefits of entering international market as a joint venture
According to Ertug et al. (2013), the joint venture has numerous benefits including the
ability of a business to enter the international market with ease and effectiveness. The joint
venture not only allowed combination of resources possessed by the two organisations, but
also has allowed for exploiting the skills, resources and competencies, which provided greater
advantages that are needed to sustain in the foreign marketplace (Dinu 2016). As stated by
Dhir (2017), the joint venture working has allowed for aiming at making an entry into the
international market with ease and effectiveness as well as manage sharing of risks and
rewards along with sharing technology and product development too for meeting the business
standards. Due to the management of joint venture, the business organizations that have

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focused on making an entry into the international market have acquired benefits such as
strengthened political connections and accessibility to a wide range of channels of
distribution (Dhir 2017). There are various things that have been considered by the businesses
while making a foreign market entry including the ownership, control, agreement duration,
transfer of technology and the company’s skills, resources and capabilities, which, if not
managed properly, could result in various issues. These issues often hinder the company’s
ability to enter the international market, thus reducing the profit level due to lack of
customers and inability to make a global outreach. Rabbiosi and Santangelo (2013) also
stated that there have been various problems associated with the entry into the international
market such as the conflicts emerging related to the asymmetric investments that have been
done currently, ambiguity of performance, poor level of support and help from the parent
organization, cultural differences, etc. The lack of funding could also be a major issue related
to the entry into the international market (Rabbiosi and Santangelo 2013).
As stated by Johanson and Mattsson (2015), joint venture has been considered by
many as one of the most effective ways of entering the international market because of the
sharing of costs as well as risks between the two partners, while at the same time, the joint
venture has given better access for the businesses to the networks of distribution along with
the emerging markets. A huge number of resources has been accessed, which also included
the employees, i.e., the human resources and also the financial resources and technological
resources required to ensure entry into the market with ease and efficiency (Johanson and
Mattsson 2015). It has been found that the joint ventures have also helped in managing the
growth and development of business without any need for borrowing the funds or even
looking to attract any shareholders for facilitating the investments or funding aspects.