International Joint Venture: EXO Travel and Novotel London Excel

Desklib provides past papers and solved assignments for students. This project analyzes the risks and benefits of a joint venture between EXO Travel and Novotel.

The risks and benefits of a joint business venture EXO
Travel with Novotel London Excel to enter international
markets of UK
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Executive Summary
In the course of forming an international joint venture for entering global markets, the partner
companies come across various risks and threats along with several benefits. Therefore, the
concerned businesses must develop strategic plans prior to penetrating the global markets
through the process of joint venturing in order to establish successfully. This will assist the
partner organisations to assess the positive as well as the negative impact of the formation of the
international joint venture. In this study, the Thailand based Tour Operator EXO Travel Thailand
will be forming a joint venture with the Hotel Novotel London Excel in the lands of the United
Kingdom, for penetrating the international market.
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Table of Contents
Task 1-Project Plan..........................................................................................................................4
Task 2-Research report....................................................................................................................9
References......................................................................................................................................26
Appendices....................................................................................................................................29
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Task 1-Project Plan
1. A brief explanation of the proposed topic and why you have chosen it.
Formation of joint ventures, which are of international in nature, is one of the most widespread
strategies, implemented by organisations to enter the international markets. However, certain
risks and threats can also come across the partner companies affecting the businesses negatively.
The joint venturing organisations the EXO Travel Thailand and the Hotel Novotel London Excel
can face various challenges due to development of the joint venture for entering the global
markets. In the past, companies have encountered various risks as well as opportunities in the
process of penetrating the global market. Therefore, this project will explore the different aspects
of the formation of joint venture between the EXO Travel Thailand, and the Hotel Novotel
London Excel in terms of the potential risks and advantages and assess process capable of
alleviating the threats.
2. An aim and some objectives for your proposed research.
The aim of the particular research study is to identify and explain the quadrants, benefits, and
risks of market entry implications that are projected upon the EXO Travel, which seek to form a
Joint Venture partnership with Novotel London Excel for international business expansions.
The overall research study shall be focusing upon these research hypotheses or rather objectives:
 To understand the significance of market expansion for EXO Travel through Joint
Venture strategy
 To identify and analyse the merits of Joint Venture that shall increase the business
productivity and profitability of EXO Travel within the international markets of UK
 To identify and analyse the risks of Joint Venture that shall threaten the business
productivity and profitability of EXO Travel within the international markets of UK
 To identify and analyse the ways through which risks can be resolved for improved
business performance of EXO Travel in UK
3. A brief discussion of the scope and limitations of the project.
Scope
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Included Scope
The project shall focus on collecting and analysing primary research attributes through
quantitative research aspects. Survey shall be conducted as the core source of data collection and
analysis shall be done to interpret the results of the overall research study.
Excluded Scope
The project shall not collect and evaluate the qualitative data findings from the experienced
business professionals of the organisations. Moreover, secondary research attributes through
themes or focused groups shall be deprived in the entire research study.
Limitations
Therefore, the overall research study is limited only to primary data aspects that shall collect data
findings and analyse the same through questionnaires distributed among the selected samples at
the time of the survey procedure.
4. Resources and cost considerations.
Resources Time Cost per hour Total Cost
Estimating project management
attributes
3 10 30
Research associated with
project theme
5 20 100
Setting up of primary research
methods
7 10 70
Conducting survey 13 50 650
Reviewing results 2 10 20
Grand Total 30 100 870
Table 1: Resource and Budget for project
(Source: Created by the learner)
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5. A Gantt chart or work breakdown structure in order to provide timeframes and stages
for completion.
SL
no.
Activities Start Date Duration End Date
1 Selection of topic 2/11/2019 2 2/13/2019
2 Research on Topic 2/13/2019 3 2/16/2019
3 Developing research
hypothesis
2/16/2019 5 2/21/2019
4 Gathering organisational
information
2/21/2019 5 2/26/2019
5 Conducting critical
literature review
2/26/2019 5 3/3/2019
6 Implementation project
management plan
3/3/2019 10 3/13/2019
7 Analysing risks and budget
for project
3/13/2019 3 3/16/2019
8 Setting up research methods 3/16/2019 2 3/18/2019
9 Collecting reviews through
survey
3/18/2019 10 3/28/2019
10 Analysing collected data 3/28/2019 5 4/2/2019
11 Reviewing collected data 4/2/2019 1 4/3/2019
12 Recommending for better
project outcomes
4/3/2019 3 4/6/2019
13 Final Submission and
Documentation of project
4/6/2019 1 4/7/2019
Table 2: Work Breakdown structure
(Source: Created by the learner)
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Selection of topic
Research on Topic
Developing research hypothesis
Gathering organisational information
Conducting critical literature review
Implementation project management
plan
Analysing risks and budget for project
Setting up research methods
Collecting reviews through survey
Analysing collected data
Reviewing collected data
Recommending for better project
outcomes
Final Submission and Documentation
of project
2/11 2/21 3/3 3/13 3/23 4/2 4/12
Figure 1: Gantt chart
(Source: Created by the learner)
6. A risk registers covering the main risks with the proposed research.
Weeks Risks Intensity Influence on
project
Methods to resolve
risks
1 Risks in allocating
budget and timeframe
in project
management plan
HIGH HIGH Consulting with
mentors and
supervisors for
assisting in setting
appropriate
timeframes and
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resource allocation
2 Communication gaps
while collecting
responses from the
selected samples
MODERATE HIGH Proper collection of
data findings and
maintain ethics
during the same
3 Issues during
reviewing project
results and outcomes
LOW MODERATE Taking suitable
measures during the
review at the time of
final project
documentation
Table 3: Risk registers
(Source: Created by the learner)
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Task 2-Research report
CHAPTER 1 Introduction
Introduction
The process of globalisation has transformed the traditional processes of conducting business due
to accessibility to various factors, for instance, innovation in technology and improved
connectivity. These elements have assisted companies to develop new strategies for business
expansion through penetration the global business markets. This study will explore the various
aspects of the joint venture formed between the Thailand based Tour Operator will be forming a
joint venture with the Hotel Novotel London Excel in the lands of the United Kingdom,
including the potential risks as well as benefits.
Background of the Company
EXO Travel Thailand
It is an organisation carrying out tour operating activities in the country of Thailand as well as
other nations all across the continent of Asia. It was founded in the year 1993 and is
headquartered in the city of Bangkok, within the nation of Thailand. The company has expanded
its business over twenty different locations in Asia and has an overall workforce of around seven
hundred people (Exotravel.com, 2019).
Hotel Novotel London Excel
It is a four star hotel that founded in the year 2004. The overall accommodation capacity of the
hotel is two hundred and fifty seven rooms which have various amenities and provisions. It has a
good location since it takes around ten minutes to drive to the London City Airport form the
hotel (Novotel-london-excel.londonhotelsgb.com, 2019).
Research Rationale
Organisations within an international business scenario tend to implement a range of strategies
for gaining competitive advantage. One of these strategies can be referred to the formation of
global joint venture, which is carries by organisations for acquiring different opportunities for
business expansion into the international markets (Chen et al., 2014). .
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Various factors, such as global inflation, BREXIT and others have proved to be threats for the
partner organisations. The Hotel Novotel London Excel, as well as the EXO Travel Thailand,
belongs to two different continents. Thus, it can be stated that the workforce along with the
customers of both the organisations possess diverse cultural tastes and traits, which influence the
operations of the joint venture.
CHAPTER 2 Literature Review
Introduction
A literature review is a process that is systematic, comprehensible, and reproducible in nature
and is used for indentifying, evaluating, as well as synthesizing the scholarly work, which has
been documented by different researchers and scholars (Hart, 2018). An effective literature
review should itemise, summarise, evaluate in an impartial manner, and elucidate the published
works of the different scholars and researchers. Review of various literatures regarding the risks
and the benefits related to joint venturing for entering global market is as follows:
Several Aspects of International Joint Ventures
In order to survive the current business scenario, various organisations are choosing to adapt to
the dramatic modifications along with the rising complexity in the international competitiveness
in the market for the past two decades. During this time, there has been a rapid elevation in the
overall number of the international joint ventures between organisations belonging to diverse
nations. Therefore, it can be stated these these kinds of joint ventures are an extremely important
element of the worldwide movement towards the process of global expansion (Yan and Luo,
2016). The formation of these joint ventures for penetration of the international market provide
an alternative to the global acquisitions and mergers through enabling development of
cooperation between the partner commonages without the loss of the corporate identification.
Nevertheless, these kind of joint ventures share one types of significant attribute with the
mergers and acquisitions, which is the difficulty of comprehending the added worth that
predicted at the time of the development of the venture (Hitt et al., 2016).
International joint ventures have been a significant topic of study in a number of academic
disciplines, for instance economics, law, business and management, sociology, anthropology,
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international relations as well as psychology. Development of joint ventures both in strategic
importance as well as in size in executing global business has been consistent through the decde
of the 1990 (Larimo et al., 2016).
Benefits connect to the formation of joint venture between the EXO Travel Thailand, and
the Hotel Novotel London Excel
Formational of international joint ventures for entering the global market has various advantages
to it. Apart from the obvious fact, that it provides the businesses the opportunity of business
expansion to foreign lands through access to new markets as well as distributing networks; it also
enhances and elevated the capacity of both the partner companies. In addition to that, the kind of
business ventures allow both the companies engaged in the venture to share the costs, for
instance the liabilities, along with the risks and threats (Shi et al., 2014). The provision of
international joint venture allow companies to access more resources, which is inclusive of
financial resources, technological resources, as well as skilled and experience human force to
carry out the required business functions and operations successfully (Park et al., 2015).
Potential risks that EXO Travel Thailand, and the Hotel Novotel London Excel might
encounter in the course of the international joint venture
Joint ventures, especial international joint ventures for entering the global market is challenging
in terms of carrying out the management activities in an effective manner, since by keeping the
separate identity of each of the partner companies intact, inherent sources of disputed has been
incorporated. When a joint venture is developed between two establishments belonging to two
different nations, differences in culture, as well as philosophy of management influence the
business functions and overall operations. It has been suggested by various managers that
businesses must only form an international joint venture if there are no other substitution or
alternative of penetrating the global market (Cavusgil et al., 2014). The allegedly high rates of
failure along with the instability of the international joint ventures are often highlighted in
various articles. In addition to that, other risks related to the formation of international joint
ventures for penetrating the global market has other threats as well. The partner companies can
have divergent objectives, which in turn will clash with the business function, leading to
negatively affecting the business. Moreover, different companies have diverse rate and standard
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of expertise, assets, and many other factors, which can act as factors causing obstacles for the
international joint ventures (Klijn et al., 2014).
Strategies for mitigating the potential risks to be encountered by EXO Travel Thailand,
and the Hotel Novotel London Excel
The formation of joint ventures for entering the global market has a tendency to fail, the rate of
which is higher than all the other kinds of business partnerships. It has been assess that most
efficient multinational companies have also face various challenges, including failure on
attempting to expand the business into the forgoing markets (Kahn et al., 2015). The companies
must develop strategic plans and incorporate appropriate legal procedures prior to formation of
the international joint venture. In addition to that, both the companies will require focusing on
the diverse customer preference, requirements and expectations, in order to increase the sakes,
which in turn will maximise the profit of both the organisations. This can be achieved through
development of strategies, strategic plans, as well as carrying out market research. The
companies must also take all sorts of legal measures, prior to entering the joint venture (Reuer et
al., 2014).
Literature Gap
Corresponding to the completion of the literature review, it has been comprehend that there are
some crucial sections which could not be included in the content. Although assessment has been
successful in terms of the potential risks and benefits related to the formation of international
joint venture for entering the global markets, what impact the different aspects connect to the
above-mention process will have on the EXO Travel Thailand and Hotel Novotel London Excel
is uncertain. Therefore, to assess the particular risks and advantages that can come across the
way of the partner companies, primary data has been collected thorough surveying and
interviewing the employees and the managers of the concerned businesses.
CHAPTER 3 Methodology
Research Philosophy
A research cannot be conducted until and unless a source and knowledge regarding the aspects
upon the same shall be carried out, are identified. Research philosophy is among the major
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