Joint Venture as a Mode of Entry in Cuba: A Case Study of Coca-Cola

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Research Proposal
Topic: “Joint Venture as a mode of entry in Cuba; a case study of Coca Cola”
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Table of Contents
LO1 Conduct appropriate research methodology, which integrates knowledge into the research
process.....................................................................................................................................................3
Title......................................................................................................................................................3
Background to the research..................................................................................................................3
Research Question...............................................................................................................................3
Aim......................................................................................................................................................4
Objectives............................................................................................................................................4
Literature Review................................................................................................................................5
Methodology........................................................................................................................................9
Reference List........................................................................................................................................12
Appendix................................................................................................................................................14
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LO1 Conduct appropriate research methodology, which integrates knowledge into the research
process
Title
Joint Venture as a mode of entry in Cuba; a case study of Coca Cola
Background to the research
In the era of globalisation, it is essential for brands to generate better profits through development of
business plans in the competitive business environment by developing new tactics that would assure
the company in achieving business objectives. The need for market expansion is an attribute of
globalisation that organisations experience in their business development tactics. Various market
entry strategies provide organisations with the opportunity to develop better results in generating
profits from their business operations. Joint ventures, partnerships, acquisitions and franchising are
some major ways that organisations implement in order to enter foreign markets. The need for market
expansion is determined through the opportunity developed by the companies in generating better
profit and with the intention of catering to the needs and demands of a wider consumer market. Joint
venture strategy as a market entry method enables organisations to operate in new markets through the
aid and resources of another organisation that already exists in the target environment or another
foreign brand that aims to develop their business in same economy.
Coca-Cola as the world’s most popular aerated drinks company was established in 1886 has grown its
business in several parts of the world through effective business strategies. The company operates in
more than 200 countries across the world and seeks to expand their business in multiple emerging
markets in order to develop their brand image and cater to a wider consumer demographic ( coca-
cola.com, 2019) The company follows an effective business planning strategy that ensures the
company is able to diversify their product range into several varieties.
The Cuban beverage industry is a lucrative market for Coca-cola to expand their business operation
within since the market offers a variety of fruit flavour drinks that are marketed by the Nestle
subsidiary brand Ciego Montero (heritage.org, 2019). Ciego Montero mostly accumulates the market
share within the Cuban market hence in order for Coca cola to enter the foreign market of Cuba; the
company must form joint venture relation with Ciego Montero.
Research Question
 What is the impact of joint venture upon a business organisation?
 What are the positive impact of joint venture in Cuba on Coca Cola
 What are the negative impact of joint venture in Cuba on Coca Cola
 What steps must be taken by Coca Cola in order to ensure future growth of the business
concerning joint venture?
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Aim
The key aim of the research is to identify and analyse the impact of joint venture in Cuba upon Coca
Cola.
Objectives
 To analyse the impact of joint venture upon a business organisation
 To evaluate the positive impact of joint venture in Cuba on Coca Cola
 To assess the negative impact of joint venture in Cuba on Coca Cola
 To provide apposite recommendations for future growth of the company with regards to joint
venture
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Literature Review
Introduction
The development of the outcomes of a study is based on the type of literature review that the
researcher performs while conducting the study. An appropriate literature review concerns the
researcher with the outcome of the data collected through the study. The literature review provides an
effective understanding of the topic that will ensure the research objectives are achieved effectively.
Impact of joint venture upon a business organisation
The strategic decision of a company to enter a new market through the application of joint venture
enables the growth of the business in a competitive market environment but it also presents several
negative attributes to the internal operators within the organisation (Yan and Luo, 2016). The extent
of aid that joint venture provides to an organisation in improving the business context of the company
is identified through the growth of the market share and the profit earning capacity of the company in
the business environment. The success of joint venture as a successful market entry strategy is
identified through the operation of the organisation in the new environment. As per the reports
developed by forbes.com (2019), the success rate of organisations applying joint venture in enhancing
their business operations is calculated at 80% success. Hence, it can be stated that the market entry
strategy of joint venture is effective in generating better results in the competitive business
environment.
As per the opinion of Isidor et al. (2015), the impact of joint venture on the success of an organisation
is based on the strategic business procedures that the company applies in their operations. The
influence of different managerial and leadership styles influence the communication and internal
conflicts within the organisation.
The positive impact of joint venture in Cuba
Considering the opinion of White and Vila (2017), regarding the opinion of the Cuban market, it can
be stated that the scope of US firms entering the foreign market would gain success if they are able to
generate better quality of products and cater to the specific needs of the consumers. The successful
operations of the companies operating in the Cuban market would present competition to the entering
organisations in the competitive market through the type of products they develop in the market. As
per the study conducted by Orozco and Hansing (2015), it can be stated that the market condition of
Cuba in context of globalisation, presents a wide variety of scope for the organisations that seek to
enter the emerging business environment.
The negative impact of joint venture in Cuba
The business environment of Cuba is beneficial for new organisations however, as opined by Trigg
and Trigg (2016), it can be stated that the hindering factors within the business environment of Cuba
affects the successful operations of the organisations operating in the business environment. The
success of a market entry tactic applied by an organisation in entering a new economy is justified if
the financial results derived by the company’s business are achieved efficiently. The operations of an
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organisation would allow the growth of the company in the market sector however; the external
elements of the market would reduce the possibility of success in the business environment. As
observed by Piccone (2017), the normalcy of business relations between Cuba and USA would allow
the companies seeking to enter new business environments would allow the development of new
products and business relations by successfully developing strategies. The study provides a brief
overview of the political tensions between USA and Cuba, which would affect the success of
organisations seeking to operate in the competitive business environment.
Business Cycle Theory
A business organisation encounters a number of business cycles in it operation. The business
operations can face economic phases, which can be sometime low and high. The business cycle
involves four periods, which is economic expansion, recession, trough and recovery. The duration of
these stages can vary in different business cases. The business cycle is implemented to understand the
economic phases the company will encounter in its life cycle. In the recent times, companies face
economic instability because of changes in market demands and technological changes (Halling and
Zechner, 2016). The expansion part is defined by the increment in employment, financial growth, and
upward pressure on prices.
The business cycle phases are expansion, recession, trough and recovery. The expansion is
characterised with increment in employment, financial growth and pressures related to price growth.
In case of peak period, the business cycle is in the most top and vulnerable position where the
company’s economy has maximum output, increased employment and increased pressure on prices
(Desai, 2019). On the contrary, the economy slows down in the contraction period, where
development slows down, unemployment takes in greater extent and the pressure on the prices
subsides.
Figure 1: The business cycle theory
(Source: Belongia and Ireland, 2016)
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Bowman's Strategic Clock
The Bowman’s Strategic Clock helps in understanding a company’s competitive position in
comparison to its competitors. The model is a type of expansion of the three Porter generic strategies
developed by Cliff Bowman and David Faulker. The model helps in strategic positioning of a
company; it is generally applicable in the companies, which are planning to expand their subsidiaries
out of their geographical boundaries. The main purpose of the model is to provide the company with
various options of expanding and implementing growth to the company (Haselwanter and Zehrer,
2016). The Bowman strategic clock identifies company products in two dimensions; they are price
and perceived value. The implementation of the Bowman strategic clock will help a company analyse
its competitors and the strategies they are using to attract the customers.
]
Figure 2: Bowman Strategic Clock
(Source: Haselwanter et al., 2016)
Conceptual Framework
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Joint
Venture
as a mode
of entry in
Cuba; a
case study
of Coca
Cola
The negative impact of joint venture in Cuba
The positive impact of joint venture in Cuba
Impact of joint venture upon a business
organisation
Business cycle
theory
Bowman's
strategic clock
Figure 3: Conceptual framework
(Source: Created by the learner)
Literature Gap
The results developed from the review provide a brief overview of the benefits and disadvantages that
joint venture have in the business environment. The journals and articles reviewed for the study
provides an effective understanding of joint venture as a business strategy that enables organisations
to enter new markets through proper planning methods. The literary sources do not provide effective
information regarding the scope of profits that a company can gain through expansion in the Cuban
market.
Summary
The literature review section provides a brief outline of the benefits and advantages that the market
entry strategy would present to organisations. The study identifies the positive and negative aspects of
joint venture in the Cuban business economy.
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Methodology Research philosophies
A research philosophy is defined as a framework based upon which, the researcher will be
able to collect and analyse data. In other words, philosophy is also considered as a belief by
which the objectives of the research can be addressed. There are various types of research
philosophies that can be taken into consideration. These are positivism, realism, pragmatism
and interpretivism (Flick, 2015). Among the various types, the Pragmatism philosophy shall
be used in this research in order to deduct as well as induct the objectives of the research.
Further, it will be appropriate in qualitative as well as quantitative breakdown of data. Research Approaches
A research approach is considered a method or plan by which data can be collected and
interpreted. The hypothesis of the research can be tested by using a suitable research
approach. Broadly, there are three types of approaches. These are inductive, abductive and
deductive. In order to carry out this research, the Deductive approach shall be used, as it will
help in reaching a firm conclusion by deducting the theories used in the literature review
section (Saunders et al., 2007). Methodologies
In order to fulfil the objectives of the research, a particular research design shall also be used
as it will provide a general plan for conducting the research. Research design can be broadly
divided into three types. These are descriptive, exploratory and conclusive design. In order to
conduct this research, the descriptive design shall be appropriate because participants shall be
observed and their opinions shall be considered (Matua and Van Der Wal, 2015). Further, the
phenomenon shall be described covering the causes and specific elements. Techniques
In order to conduct a research, it is fundamental to use tools and techniques for collecting,
analysing and interpreting the data. In this case, data will be collected by using the survey and
interview techniques.
Sampling
Sampling technique is utilised by researchers in order to select particular members from the wider
population. The selected participants represent the entire population. Sampling technique is used
because it is not possible to conduct research on a large sample size (Kumar, 2019). In this case,
probability-sampling technique shall be used by conducting a survey on 50 employees of Coca Cola.
Further, two managers of the company shall be interviewed as well. Here the random sampling
technique will be appropriate because it can be effective only when all the participants of the research
take part in the data collection process.
Data Collection and Analysis
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Data collection is regarded as a method by which information can be collected to seek out the answers
to the problem of the research. Broadly, data collection is classified into two types. These are
secondary and primary methods. Here, the primary method will be utilised because it can help in
analysing the perceptions of various respondents. Further, in order to analyse the collected
information, it will be appropriate to use both quantitative and qualitative methods since, both close
and open-ended questions will be prepared.
Action Plan
Activities Start date Duration End date
Deciding the topic of the study 1/5/2019 1 1/6/2019
Development of aims and objectives for the study 1/6/2019 3 1/9/2019
Performing literature review 1/9/2019 8 1/17/2019
Identifying the methodology for the study 1/17/2019 2 1/19/2019
Creating the questionnaire 1/19/2019 5 1/24/2019
Conducting the survey 1/24/2019 15 2/8/2019
Interpretation and analysis of the collected data 2/8/2019 5 2/13/2019
Identifying final outcomes 2/13/2019 2 2/15/2019
Providing suitable recommendations 2/15/2019 2 2/17/2019
Documentation of final project 2/17/2019 1 2/18/2019
Submission 2/18/2019 1 2/19/2019
Table 1: WBS of the study
(Source: Created by the learner)
Gantt chart
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Deciding the topic of the study
Development of aims and objectives for the study
Performing litertaure review
Identifying the methodology for the study
Creating the questionnaire
Conducting the survey
Interpretation and analysis of the collected data
Identifying final outcomes
Providing suitable reccomendations
Documentation of final project
Submisssion
1/5 1/10 1/15 1/20 1/25 1/30 2/4 2/9 2/14 2/19 2/24
Figure 4: Gantt chart
(Source: created by the learner)
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Reference List
Belongia, M.T. and Ireland, P.N., 2016. A Classical View of the Business Cycle (No. 921). Boston
College Department of Economics.
Desai, C., 2019. Strategy and Strategic Management. In Management for Scientists (pp. 65-84).
Emerald Publishing Limited.
Flick, U., 2015. Introducing research methodology: A beginner's guide to doing a research project.
Sage.
Forbes.com. 2019. The Secrets To Successful Joint Ventures. [online] Available at:
https://www.forbes.com/sites/baininsights/2017/04/11/the-secrets-to-successful-joint-ventures/
#417685ae38d1 [Accessed 27 Apr. 2019].
Halling, M., Yu, J. and Zechner, J., 2016. Leverage dynamics over the business cycle. Journal of
Financial Economics, 122(1), pp.21-41.
Haselwanter, S., Muskat, B. and Zehrer, A., 2016. Strategic Planning in Micro Businesses: Adapting
the Strategic Clock for Micro Firms.
Haselwanter, S., Muskat, B. and Zehrer, A., 2016. Strategic Planning in Micro Businesses: Adapting
the Strategic Clock for Micro Firms.
Heritage.org. 2019. Cuba Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption.
[online] Available at: https://www.heritage.org/index/country/cuba [Accessed 27 Apr. 2019].
Isidor, R., Schwens, C., Hornung, F. and Kabst, R., 2015. The impact of structural and attitudinal
antecedents on the instability of international joint ventures: The mediating role of asymmetrical
changes in commitment. International Business Review, 24(2), pp.298-310.
Kumar, R., 2019. Research methodology: A step-by-step guide for beginners. Sage Publications
Limited.
Matua, G.A. and Van Der Wal, D.M., 2015. Differentiating between descriptive and interpretive
phenomenological research approaches. Nurse researcher, 22(6).
Official Coca-Cola® US Website. 2019. Frequently Asked Questions. [online] Available at:
https://us.coca-cola.com/faqs/ [Accessed 27 Apr. 2019].
Orozco, M. and Hansing, K., 2015. Remittance recipients and the present and future of micro-
entrepreneurship activities in Cuba. A Contemporary Cuba Reader, pp.183-190.
Piccone, T., 2017. US-Cuba Normalization: US Constituencies for Change. IdeAs. Idées d'Amériques,
(10).
Saunders, M., Lewis, P. and Thornhill, A., 2007. Research methods. Business Students 4th edition
Pearson Education Limited, England.
Trigg, M.C. and Trigg, D., 2016. International Business–Operating Abroad. In The Global Business
Handbook (pp. 35-48). Routledge.
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