Risk and Benefits of a Joint Business Venture to Enter into Spain Markets: A Case Study of NAV People, UK

Running head:RISK AND BENEFITS OF A JOINT BUSINESS VENTURE
RISK AND BENEFITS OF A JOINT BUSINESS VENTURE TO ENTER INTO SPAIN
MARKETS: A CASE STUDY OF NAV PEOPLE, UK
[Name of the Student]
[Name of the University]

1RISK AND BENEFITS OF A JOINT BUSINESS VENTURE
Table of Contents
Chapter 1: Introduction..............................................................................................................3
1.1 Background of the research study....................................................................................3
1.2 Problem Statement...........................................................................................................3
1.3 Project Aim and objectives..............................................................................................4
1.4 Justification for selecting the topic..................................................................................4
Chapter 2: Literature Review.....................................................................................................5
2.1 Introduction......................................................................................................................5
2.2 Benefits of Joint Venture for entering in Spain Market for The NAV People................5
2.3 Risks of Joint Venture for entering in Spain Market for the NAV People......................6
2.4 Strategies used to overcome with the joint business venture risks for entering in the
Spain Market..........................................................................................................................7
Chapter 3: Methodology............................................................................................................9
1.1 Primary Data Collection Method.................................................................................9
1.2 Sampling and Data Collection...................................................................................10
1.3 Primary Data Collection Instrument..........................................................................11
1.4 Ethical Considerations...............................................................................................11
Chapter 4: Results....................................................................................................................13
4.1 Introduction....................................................................................................................13
4.2 Qualitative Data Analysis..............................................................................................13
4.3 Summary........................................................................................................................16

2RISK AND BENEFITS OF A JOINT BUSINESS VENTURE
Chapter 5- Conclusions and Recommendations......................................................................17
5.1 Conclusion......................................................................................................................17
5.2 Recommendations..........................................................................................................19
Chapter 6: Reflection...............................................................................................................20
References................................................................................................................................22
Appendix..................................................................................................................................23
1. Project Log Book..........................................................................................................23
2. Interview Transcript.........................................................................................................25
2.1 Interview Transcript 1................................................................................................25
2.2 Interview Transcript 2................................................................................................27
2.3 Interview Transcript 3................................................................................................29
2.4 Interview Transcript 4................................................................................................31
2.5 Interview Transcript 5................................................................................................33

3RISK AND BENEFITS OF A JOINT BUSINESS VENTURE
Chapter 1: Introduction
1.1 Background of the research study
The research study is based on risks and benefits of the joint venture for entering into
the Spain market with reference to a small company, The NAV People in United Kingdom.
The selected company, The NAV People is a business and management consultant in
England and an experienced dealer of Microsoft Dynamics ERP software. The mission of the
company is to deliver greater software and excellent services to the customers. The company
is focused on developing their business functions by improving over their back office
functions like compliance and regulations. The study is analysing how the small company is
trying to enter in Spain market by using joint venture mode so that they can gain growth in
the business.
Caselli and Negri (2018) stated that joint venture is a term which is used to expand a
business in the international market for attaining business growth and expansion. Colombo,
D’Adda and Pirelli (2016) argued that joint venture has both benefits and risks. Owning a
partnership is presented a number of benefits such as sharing of risks, improvement over the
operational competencies and ability to collaborate with others. This partnership is also risks
of potential conflicts among the business partners, differ in culture, legal structure, technical
plus managerial competencies and lack of protection over their business assets.
1.2 Problem Statement
The problem of this study is that due to joint business venture for entering in the new
and international market, strategic alliances cause risks to the project. While entering in a
new market, it is difficult to conduct a market research of the country where the business is
tried to enter. There is an increase in capital investment and the researcher should understand

4RISK AND BENEFITS OF A JOINT BUSINESS VENTURE
the marketing rules and regulations of Spain. While entering in international market of a
small business, there is also problem of increasing in competiveness.
1.3 Project Aim and objectives
The aim of this research study is to examine the risks as well as benefits caused due to
joint venture of The NAV People, UK to enter in Spain Market. Following are the list of
objectives based on which entire study is carried out such as:
 To explore conceptual understanding of the business joint venture
 To examine possible benefits of joint venture for The NAV People to enter in Spain
market
 To examine possible risks of joint venture for The NAV People to enter in Spain
market
 To recommend business strategies to overcome with the risks of joint business
venture to penetrate into Spain market
1.4 Justification for selecting the topic
This topic is justified for this research so that the reader can understand the concepts
of the joint business venture for entering into the international market. This research study
helps to collect information about possible risks as well as benefits which are caused for joint
venture for entering in a particular market. The literature gap is that the study is only limited
to the risks and benefits of the joint venture for entering in the international market. The
study is only limited to conducting interview of the joint venture managers and it is only
carried out based on a small company.

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Chapter 2: Literature Review
2.1 Introduction
Cumming and Zahra(2016) stated that the joint venture is the business preparation in
which the organization is sharing ownership, business expenses, return of the cost
investments, profits and others. This purpose of this particular chapter is based on
establishing the academic knowledge based on the risks as well as benefits of the joint
venture to enter in the international market of Spain. With help of foundation, the researcher
is required to enhance the selected research topic in detailed way so that the reader can
understand the critical perspectives of the study. The application related to theories as well as
models of the risk allocation will add value to the literature study such that in other chapters,
it will use for better analysis of the research related outcomes. In order to gain a positive
business strategy, the business organization is expanding by joint business ventures with
other international and overseas organizations.
2.2 Benefits of Joint Venture for entering in Spain Market for The NAV People
Following are the benefits of the joint venture such as:
Risk Sharing:In case there is failed of the joint venture projects, and then one
company is not alone responsible to bear the failure cost. As the company is shared
partnerships with other company, therefore there is sharing of expenses which would support
the business losses (Gao, Wang and Che 2018).
Better Resources: The joint venture is formed with better human and non-human
resources such as experienced staff and technology(Yan and Luo2016). All the equipment as
well as capital required for the project plan is used now in the project plan.

6RISK AND BENEFITS OF A JOINT BUSINESS VENTURE
New Insight and Expertise: Starting a joint venture among two of the companies
provide with an opportunity to achieve new insights as well as expertise (Shen and Wang
2018). In case of NAV People, the Spain market is now easier to understand provided with
the strategic partnerships.
Better Collaboration:Even both the partnered companies has a specific business
goals, therefore it can lead to create a better as well as long lasting business relationships and
collaboration among two of the companies (Dollar 2017). It helps to meet with the business
needs, achieve growth and expand the business in the international market.
2.3 Risks of Joint Venture for entering in Spain Market for the NAV People
Vaccarini, Spigarelli and Tavoletti(2016) pointed that the main risks of the joint
venture in Spain are conflicts of the internet among the two parties and dependence of partner
to make business related decisions. According to Ward and Zheng(2016), it is required to
adapt to different culture in Spain and market which is unknown to the NAV People company
as it is operated in UK and not familiar with the Spain market. There is also possibility of
integration as well as poor communication among the business partners so that it becomes
complex to discuss the business related issues and problems. Following are the risks of the
joint venture such as:
Difference in culture: There is a clash of cultures as well as management styles
among the business partners which is resulted in poor cooperation as well as integration.
People are from various beliefs, as well as preferences which can cause in a way that there
are difference suggestions of both the business partners (Miller and Weinberg 2017).
Lack of protection of business assets: As two different companies from two different
countries are working together, there is an imbalance of the expertise, capital investments as
well as business assets (Gómez-Miranda et al. 2015). It provides a negative impact on the

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business growth caused due to joint venture. The risk of joint venture is that the structure is
offered no such liability protection to the involved business parties.When the assets of joint
venture are not covered with debts as well as obligations of the company, the business
partners should loss the personal assets to that point where the debt becomes to be satisfied.
Therefore, the company should loss assets as result of obligations of business.
Limited life: The joint venture is formed for limited period of time. The business
venture is come to an end when the company can fulfill purpose for which it is being formed
(Park Vertinsky and Becerra 2015). Death as well as withdrawal of the business partner is
caused automatic termination of the joint venture. The joint venture is being terminated
automatically when the terms are contained in the joint agreement is occurred.
2.4 Strategies used to overcome with the joint business venture risks for entering
in the Spain Market
In order to overcome with the joint venture risks, the business management should
take strategic decisions so that relationship among the two companies should be better. In
order to enter in Spain market, The NAV People should ensure that they know their future
partners based on the financial as well as operational situations. Pallares-Barbera (2017)
discussed that the company should decide on each of their business partner’s responsibilities
before they are sealing their agreement. It limits potential to misunderstand the business
partners in case when The NAV People should start their business with them. They should be
written of verbal agreement so that later there is no confusion among the business partners.
According to Cumming, Grilli and Murtinu (2017), the joint venture is flexible which a
context to the organizational requirements is. The agreement among the companies is detailed
terms as well as conditions with respect to the business activities which are taken place. In
this study, UK based small company, The NAV People has a joint venture for entering in the
international market such as Spain Market so as to achieve a market growth and expand their