Joint Venture: Analyzing Risks and Benefits for International Entry

This project examines the strategic advantages and potential risks associated with a joint business venture for international market entry, focusing on the case of Rowlinson Knitwear Ltd. and Coop Trading A/S entering the Asian market. The project outlines the background, aims, objectives, scope, and limitations, along with resource and cost considerations, including a Gantt chart and a risk register. The analysis identifies both tangible and intangible resources required, such as capital, technology, and human resources, and assesses potential risks like price increases, cash flow fluctuations, internet shutdowns, client demand changes, and government tax increases. The project aims to determine the benefits of joint ventures for small companies, emphasizing the combination of resources and expertise to achieve success in international markets. It provides a comprehensive overview of the challenges and opportunities in global business expansion, offering valuable insights into risk mitigation and strategic planning for students on Desklib.

The risks and benefits of a joint
business venture to enter international
markets

Table of Contents
Topic - The risks and benefits of a joint business venture to enter international markets...............3
1. Background of project........................................................................................................3
2. Aim and objectives of project.............................................................................................3
3. Scope and limitation of proposed project...........................................................................4
4. Resources and cost considerations.....................................................................................4
5. Gantt Chart.........................................................................................................................5
6. Risk Register......................................................................................................................6
REFERENCES................................................................................................................................8

Topic - The risks and benefits of a joint business venture to enter
international markets
1. Background of project
Globalisation gives opportunity to organizations to move their businesses in international
market and generate high profitability. For this purpose, companies dealing in small sector needs
to make appropriate project plans to enter into new market (Singh and Delios, 2017). As to move
business in other countries, firms require adequate amount of funds and resources, therefore, they
use to merge business with other for fulfilment of the same. In context with Rowlinson Knitwear
Ltd., it deals in apparel and footwear market of UK, that produces school wear and knitwear for
students. In order to expand business at international level, it is going to joint its venture with
one of the European trading company, named by Coop Trading A/S. It is a purchasing company
of Sweden that sells products by own brand name, with focusing on quality of products and
offers at good price. In this regard, through the concept of joint venture, both firms can combine
their resources and expertise for serving products in Asian marketplace, to ensure the success of
a venture.
This project is going to identify the risk as well as benefits both companies may gain after
make agreements for joint business venture, to enter into Asian marketplace. For this purpose,
both primary and secondary resources are used to gather adequate amount of reliable information
on given topic. This would aid to analyse what types of risks associated with joint venture for
small companies and benefits availed by the same (Nicholas and Steyn, 2017). Therefore, main
reason behind chosen of this topic is to enhance knowledge on joint venture and understand the
term globalisation. This would aid project makers in enhancing skills and knowledge to work on
future assignments more effectively.

2. Aim and objectives of project
Aim: “To determine the benefits of joint business venture for small companies to enter into
international market, with risks associated with the same.”
Objectives:
 To ascertain the concept of joint business venture for small companies
 To identify the benefits availed by Coop Trading A/S and Rowlinson Knitwear Ltd., after
joining their business to enter into Asian marketplace
 To determine risks associated with joint business venture for small organizations
3. Scope and limitation of proposed project
Through the concept of joint venture, small companies get chance to work together on a
joint project like open an branch in international market. This would also provide benefits to
maintain rest part of business separate from each other and run in own manner (Milosevic and
Martinelli, 2016). In context with Coop Trading A/S and Rowlinson Knitwear Ltd., as both
companies deal in small sector therefore, to move business in international market is really a
difficult task for them. In this regard, by forming a joint venture they can combine resources, to
ensure success of launching business in Asian marketplace.
Although there is a large scope of project for small companies but still it includes some
major limitations, that classified as control and specification limits. Here, control limits majorly
occur in a project through variations in gathered information. It includes disagreement among
project members which leads to failure of outcomes (Yan and Luo, 2016). While specification
limits are associated with dissatisfaction of clients or stakeholders, that somehow sway the
project.
4. Resources and cost considerations
To work on a common project, it is essential for companies to collect adequate amount of
resources, which includes both tangible and intangible resources. Here, tangible resources
include latest tools and technologies, VRIO framework that contributes to gain competitive
advantages, internal skills and knowledge, human resources etc. While, intangible resources
includes goodwill, patents and expenses. Therefore, by combining all such resources, both Coop
Trading A/S and Rowlinson Knitwear Ltd., can work on a common project in collaboration. In
context with project completion, resources required by researchers include capital, latest
technologies for investigation, team-members having appropriate skills (Hollender, Zapkau and

Schwens, 2017). In this regard, minimum 18k Euro are required to complete this project. While
for business expansion in international market, both companies need to make investment with
minimum amount of £100 million. This would help in conducting market analysis for
determining demand and purchasing level of potential customers and offering them products on
such price accordingly.
5. Gantt Chart

6. Risk Register
It refers to a tool which defines risk management plan in terms of problems that may
occur while working on a project. It also shows path to address the same in following manner:-
Risk Mitigation
action
Contingency
action
Pre action score
(Out of 10,
where 10 is high
risk and 1 is low)
Post action score
(Out of 10,
where 10 is high
risk and 1 is low)
Increase in price A contract can be Existing 7 3

of resources such
as tools and
technologies
which are
required for
successfully
completion of
project
signed between
Coop Trading
A/S and
Rowlinson
Knitwear Ltd.,
related to fixing
price of such
resources so that
affect of
increment in price
do not affect cost
of project.
techniques can be
reused by both
companies to
launch business
into international
market.
High fluctuation
in cash flow
Since managing
capital in the
form of is
difficult for a
company.
Therefore, by
creating a
provision for
assuring smooth
day to day cash
flow help in
maintaining high
fluctuation in
cash flow.
Take short term
finance from
banks and other
fund sources to
remove barriers
related to manage
and maintain an
adequate amount
of cash.
8 4
Internet shutdown
due to any
emergency
For conducting
market survey
and operating
business across
Company
requires to do
major task
manually which
9 6

the territorial
boundaries,
internet refers to a
major resource.
doesn't need
internet sources
much
Client change
demand
Developing plan
to meet instant
demand of
customers
Modifications can
be done within
existing project to
meet demand of
clients.
6 3
Government
increases tax rate
Provision can be
made to reduce
impact of such
long term risk.
Optimise use of
cost of business
helps in reducing
impact of same
4 2

REFERENCES
Books and Journals
Hollender, L., Zapkau, F. B. and Schwens, C., 2017. SME foreign market entry mode choice and
foreign venture performance: The moderating effect of international experience and
product adaptation. International Business Review. 26(2). pp.250-263.
Milosevic, D. Z. and Martinelli, R. J., 2016. Project management toolbox: tools and techniques
for the practicing project manager. John Wiley & Sons.
Nicholas, J. M. and Steyn, H., 2017. Project management for engineering, business and
technology. Routledge.
Singh, D. and Delios, A., 2017. Corporate governance, board networks and growth in domestic
and international markets: Evidence from India. Journal of World Business, 52(5),
pp.615-627.
Yan, A. and Luo, Y., 2016. International Joint Ventures: Theory and Practice: Theory and
Practice. Routledge.