Analyzing Challenges and Benefits of Joint Venture in the UK Market

This report examines the challenges and benefits of using a joint venture as a market entry strategy, focusing on the case of Happy Bulgaria's expansion into the UK market. The report begins with an introduction outlining the research topic and its significance, emphasizing the need to evaluate joint ventures, particularly for restaurant chains facing high risks and moderate capital investment. A literature review explores the risk factors associated with joint ventures, such as partner selection and unclear division of duties, while also highlighting the benefits, including reduced risk and access to new markets. The methodology section describes the qualitative research approach and the use of primary data collection through questionnaires, alongside secondary data. The results section presents the findings from the data collected. The report concludes with recommendations for market entry strategies, considering political environments, consumer preferences, and internal analysis. The research aims to assist similar restaurant chains in understanding the risks and benefits of joint ventures for international expansion, as well as providing insights for students and other researchers in the field. The report includes an introduction, literature review, methodology, results, conclusion, reflections, references, and an appendix with a questionnaire used for data collection.

MNAGING SUCCESSFUL
BUSINESS PROJECTS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................4
LITERATURE REVIEW................................................................................................................4
Risk factors associated with the joint venture.............................................................................4
Benefits that arise by using joint venture as an expansion medium............................................5
Recommendations for using correct market entry strategies.......................................................6
METHODOLOGY..........................................................................................................................6
RESULTS........................................................................................................................................9
CONCLUSION AND RECOMMENDATIONS..........................................................................16
REFLECTIONS.............................................................................................................................18
REFERENCES..............................................................................................................................20
APPENDIX....................................................................................................................................22
Questionnaire.............................................................................................................................22

INTRODUCTION
The major concern of a wide sector of companies planning to go for international
expansions is related t the ode of entry i.e. the correct medium through which the companies
should enter in such international markets. There are a variety of options that are available but
the correct option must be selected in accordance with the nature of business, its, activities, its
size etc. In this research report, the benefits and challenges that are related to joint venture in
particular as a mode of entry would be evaluated in the context of the Happy Bulgaria in the
market of UK (Lynch and Jin, 2016). The research topic would help in the current environment
where there are no clear distinguishers between the various advantages and disadvantages that
are aced by the companies practically while expanding internationally. The research will
contribute immensely in ascertaining what are the risk factors especially in context of the joint
venture because this is one of the most feasible approaches of expansion internationally.
The present research that has been undertaken is performed specifically in context of the
restaurant chain of Bulgaria and this is being done so that the joint venture as an expansion
option can be evaluated in context of the restaurants specifically. The capital to be invested is not
very high with the restaurants and additionally the risk of the success of the restaurants is also
very high (Dinu, 2016). Therefore, it is necessary to evaluate and identify those options where
maximum returns can be garnered without undertaking too much risk or investing too much. The
reason that this research topic has been selected for this researcher is because this area is not very
well researched regarding the investment options for restaurants and therefore it is easier to for
the similar restaurant chains who are planning to expand. They will be able to identify the
different risks and challenges that they can face if they choose joint venture as their expansion
strategy and it will also highlight the benefits that such strategy provides.
The research being undertaken will also assist the students and other researchers in
determining what are the different aspects that are actually face and the primary research will
help in collection of original data (Gross, Huang and Ding, 2017). This will develop the
conclusions and findings of the research in a realistic manner where the actual challenges etc.
will be identified and discussed. Therefore, the research topic that has been selected is analysis
of different challenges and benefits that arises while expanding business through joint venture
medium.
Aim
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To analyse the challenges and the benefits relating to market entry in context of the case
on “Happy Bulgaria” in the UK market.
Objectives
 To investigate the risk factors associated with joint venture for the organizations
 To determine the benefits enjoyed by the firms resulting from the joint venture
 To conduct primary data, through questionnaires ,to assess the market potential for the
entry of Happy Bulgaria in the UK.
 To provide appropriate recommendations in relation to the strategies that should be
adopted to the entry in the UK market.
MAIN BODY
LITERATURE REVIEW
Literature review basically involves collection of already published data and facts related to
the topic that has been selected. This helps in critically analysing the viewpoint of different
authors that they presented in their research papers, journals, articles, etc. and then synthesise
their view point.
Risk factors associated with the joint venture
As per the research paper published by Vargas-Hernández, Ioannis and González-Armenta
(2017), it can be evaluated that during international expansion, there are various risk that might
be faced by the business men if they choose joint venture as an expansion strategy. The most
prominent risk is the selection of the joint venture partner with whom the business is to be
expanded with. The partner’s manner of working and the ethics of operation etc. everything
needs to be tested thoroughly before deciding to invest in the business as joint venture partners.
This is often the most critical steps and faulty selection of partners can lead to serious
consequences that can cause failure of the entire joint venture. Next major risk that the author
has highlighted in their research paper is that there is often lack of clear division of duties and
responsibilities that create difficulty in obtaining optimum balance. This creates the negative
work culture and collaboration between two different organisational bodies and ultimately
affects the longevity of the joint ventures thus entered into. The authors have concluded that due
to such risk factors the joint ventures are often short lived where their actual working life gets
reduced significantly due to the reduction in the balance and clarity of activities that is required
to operate the business successfully.
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The point above is however contradicted by the research paper published by the
Khamaksorn, Tah and Kurul (2020), stating that there are indeed many risk factors that are
associated with the joint venture as an expansion tool but despite his the company can work
together successfully for a longer time period. There is the risk of getting into confusions
regarding clear segregation of duties but this aspect can b addressed by developing good legal
counsel where the companies collectively can form clear structures segregating the areas of
operation for both of them. This will help in reducing the duplicity of task as well. The risk of
the correct partner’s selection is also evident but this too can be minimised using the good
research skills where the market is analysed in prior to finalising the partners. It is easier to
obtain the data regarding the activities of a business man and based on this data along with the
personal observation skills, the joint venture can operate successfully if completed in a
systematic manner.
Benefits that arise by using joint venture as an expansion medium
The research paper published by Zakić and Radišić (2017), illustrates that there are several
benefits that arise while using joint venture as an expansion tool and strategy. The authors have
highlighted that by entering into joint venture the risk that is associated with the success of the
business gets reduced in half and the investments are also reduced in half. This acts as a major
benefit for the companies that are currently operating at smaller scales and find the assistance of
such capital investment as immensely helpful. The authors have further highlighted the benefits
of the joint venture stating that the joint venture helps in penetrating into new and international
markets with already available customer base and the knowledge or expertise that is required in
order to operate successfully in these countries. The authors further highlight that if some other
mechanisms would have been used then the time taken to develop customer base, establishing
brand name etc. would be very long and the benefits are reaped after a much longer time period.
Another research paper published by Pratono and Ratih (2019), further highlights that apart
from the physical benefits and the benefits related to the resources of the partner company, there
are several other benefits such as the intellectual property rights that are gained due to the such
joint ventures, the benefit of synergy that can be utilised, the increased competitive power that
such joint ventures holds in the new international market etc. are some major benefits that arise.
Another major benefit that can arise from such expansion through joint venture is by utilising the
economies of scales where the combined resources of the two separate companies can lead to
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better creation and distribution of the resources that will also cause increased revenue generation
for the joint venture which has been entered into.
Recommendations for using correct market entry strategies
The authors, Nippa and Reuer (2019), have recommended the manner in which the
companies can choose the correct expansion strategies on the basis of the various factors. The
political environment of the country in which the company is planning to expand is the first
aspect where the regulations and allowance for international trade is the first aspect that should
be considered. Secondly the preference of the people in that country regarding the product
should also be evaluated as it helps in ascertaining that whether their product can be a success
without any assistance by opening stores of their own etc. These aspects help in ascertaining
what is the correct expansion strategy that a company should adopt in order to minimise the
future risk options.
Apart from this, another research paper published by the Jain, Kashiramka and Jain (2018),
further illustrates that the risk taking capability of the company, the investment that they can
successfully make in such expansion etc. are some of the additional aspects that need to be
considered. A firm should focus on internal analysis as well so that they are clearly able to
identify which strategy would be the best without jeopardising the interests of the company
simultaneously.
Overall the literature review that was undertaken for the purpose of completing secondary
research shows that majority of the authors have categorised joint venture as hugely beneficial
for the organisations that do not have too much capital to invest and tend to minimise their risk
percentage as well by such expansion. Joint venture hence was found to be an appropriate
strategy that can be used for expansion by smaller organisations.
METHODOLOGY
Research Type: There are present various taxonomies which can be used with the intention to
categorise research journals and papers based on various factors. A research paper can be
categorised on the basis of its aim, purpose, subject of research, nature or any other attribute but
the most common methods to categorise the types of research papers is qualitative and
quantitative research papers. Quantitative research is predominantly expressed using graphs and
numbers with its data collected also being in numeric form so that it can be analysed statistically
and mathematically. It is used to assess the validity of assumptions and theories.Qauntitative
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research is mainly focused on facts, figures and theories that can be quantified into numerical
values (Wiek and Lang, 2016). Contrastingly qualitative research predominantly makes use of
words and ideas with the intention to evaluate and understand experiences, thoughts and
concepts for research or study purposes. Qualitative research is primarily focused on an
individual’s thoughts, feelings, beliefs, opinions, and ideas that cannot be quantified into
numerical values and is qualitative in nature. This research paper is qualitative in nature as it
takes into account the feelings, beliefs, opinions and views of individuals which cannot be
quantified and analysed using mathematical techniques and approaches.
Data Collection: Data collection is the strategic process through which researchers collect
essential relevant information for their study or research purposes using various sources with the
intention to figuring out correct answers to the research problems and questions. There are
mainly two approaches through which researchers can collect their research data- primary and
secondary methods. This research paper makes use of both approaches. Primary data collection
approach is when the researcher collects relevant data by themselves for their study or research
purposes, while secondary data collection approach is when researchers make use of data that is
collected by other individuals for their own research purposes (Fletcher, 2017). Use of primary
data collection approach results in accurate, relevant and reliable data that is suited to the needs
of the particular research, while secondary data can often range in its quality, accuracy,
reliability and relevance as it was collected for completely different purposes than what the
researcher now wants to apply it for i.e. towards his research. This research paper makes use of
primary data collection approach through the dedicated questionnaires and also makes use of
secondary data collection approach through the literature review, that this research paper has
conducted, so that accurate, reliable and relevant data that is essential for the purposes of this
research paper is collected.
Sampling: It is the strategic process through which researchers select a dedicated number of
individuals from amongst a larger group for research or study purposes, conducted in such a
manner that the selected sample of individuals come to represent the entire group from which
they were selected. There are two approaches available to researchers for their sampling
operations known as probabilistic and non probabilistic sampling. Probabilistic sampling
approachrandomlyselects the individuals from a group for research purposes, so that all
individuals within the group have a fair and equal chance to get selected and represented in the
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sample (Kumar, 2019). Contrastingly, non probabilistic sampling approach does not make use of
randomised techniques for selections, instead makes use of non random techniques such as the
judgement of the researchers to select individuals for a given sample from amongst a larger
group. For this approach, all individuals do not have a fair and equal chance to get represented in
the selected sample. This research paper makes use of probabilistic random sampling method to
select a sample of 30 employees of Happy Restaurants as respondents, for its research purposes.
Data Analysis:Data analysis is the strategic process through which a researcher can effectively
assess and evaluate the data that has been collected with the intention to identifying trends,
patterns and usable information from the collected data that can be applied to the research
paper’s themes. Researchers have access to two main approaches of data analysis for their
research or study purposes- thematic data analysis and statistical data analysis.Thematic data
analysis is suited to qualitative types researches as through this approach the researcher tries to
gain insight into the patterns, trends, meaning and information within the data that is collected
through analysis. Contrastingly, statistical data analysis approach is suitable for quantitative
types of research as in statistical data analysis, the researcher tries to quantify the collected data
and apply a form of statistical analysis to it using statistical tools and software (afWåhlberg,
2017). This research paper makes use of thematic data analysis approach as it is most suited for
qualitative research and helps researchers gain insights, trends, patterns and meaningful
information from the qualitative data that is collected from primary and secondary sources for
the research.
Ethical Issues: There are also present various ethical issues related to how the research was
conducted, data was collected and stored for the research paper. One major ethical issue during
the research was the consent of the external participants for the research. All external participants
were made to provide their consent for willingly participating in the research of their own
accord, without any external forces pushing them to participate in the research. The researcher
was also made to sign a declaration form which explicitly stated that all contents in the research
paper are original to them, with all external and secondary sources and data used for the research
appropriately referenced and cited so that no plagiarism takes place in relation to the research
paper (Mohajan, 2018). Another major ethical concern during this research was the storage of the
primary data that was collected during research in an ethical and safe manner, as the data was
highly sensitive and confidential in nature and could not be leaked to external sources which
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would breach the privacy and consent of the researching participants. For the data storage
operations, all data was first encrypted using advanced encrypting algorithms so as to make the
stored data secure. Then the data was stored in a cloud service with firewalls, with access
privileges restricted to handful of researchers with the intention to further provide increased
security to the stored data.
RESULTS
The result section will include the analysis of the data that has been collected on the basis of
primary research that was conducted. For primary research, questionnaires were distributed to
the employees of Happy and their opinion regarding the international expansion was obtained.
This has been analysed and presented in following manner:
Theme 1: Majority of the respondents were found to be aware with the joint venture as an
expansion strategy.
Do you understand the concept of international
expansion through joint venture?
Frequency
Yes 27
No 3
Total 30
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Interpretation: The chart above clearly signifies that the maximum numbers of employees are
aware about the joint venture technique of international expansion where only 10% of them were
found to be unaware of this concept as expansion strategy. This can be further referenced from
the analysis done in the literature review above where it was identified that the joint venture was
the most beneficial technique that is available to the businesses (Le Nguyen, Larimo and Wang,
2019). Therefore, the interpretation that the maximum number of respondents knows about the
joint venture technique acts as support in the argument that has already been discussed and
analysed.
Theme 2: Maximum employees are aware that Happy is planning for international expansion.
Are you aware of the fact that Happy is
planning to diversify itself out of Bulgaria in
UK?
Frequency
Yes 29
No 1
Total 30
Interpretation: Maximum of the employees i.e. 97% agreed that they were aware regarding the
planning of Happy to go for international expansion in UK and were all geared up for such
expansion. This shows that the company keeps their employees informed about the major
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decisions that they are undertaking and the company has the support of its employees in the
decision for international expansion in UK. This will assist the company in expanding their
business when they decide on the expansion strategy that is to be used.
Theme 3: Joint venture was opinionated to be the best expansions strategy that Happy could
adopt.
What according to you is the best strategy for
such international expansion of Happy?
Frequency
Joint Venture 13
Opening their own stores 10
Franchisee or Licensing 4
Should not go for international expansion right now 3
Total 30
Interpretation: Chart clearly signifies that the joint venture was the most favoured approach that
the employees think for the international expansion of Happy. It was identified that the majority
if respondents stated that using joint venture would be the best strategy due to the limited risk
and quicker brand establishment as it was identified in the literature review done above as well.
It was identified that smaller businesses can minimise potential risk by engaging into joint
venture as an expansion technique and this can further help them in the controlling the exposure
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to risk as well (López-Cózar-Navarro, Benito-Hernández and Platero-Jaime, 2017). The chart
therefore interprets what was found earlier that joint venture is the best strategy that can be
adopted by smaller businesses during international expansion.
Theme 4: Majority of employees found it likely that Happy will succeed in its new joint venture
in UK.
How likely do you think Happy is going to
succeed if it enters into joint venture with a
UK’s firm?
Frequency
Extremely Likely 10
Likely 12
Neutral 0
Unlikely 6
Extremely Unlikely 2
Total 30
Interpretation: When the Happy enters into the international market with their restaurant chain
through the joint venture medium, majority of the employees think that it is most likely that they
will succeed in the European market. The percentage of respondents thinking it to be extremely
likely also follows quite closely at 33% where they think that the chances of success are
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