International Joint Venture: Blackbird Coffee & Costa Coffee

Desklib provides past papers and solved assignments for students. This report analyzes the risks and benefits of joint ventures for international market expansion.

The risks and benefits of a joint business venture to
enter International markets
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Executive Summary
The concept of globalization has been subjected to a topic of discussion for many developing
countries. The concept of trade has been implied for a better and effective growth of the
business research. Therefore, there are companies that invest in joint ventures for making
consistent profits. This has an impact on the business and inflicts them with a responsibility
to function smoothly and effectively. Therefore, the companies make use of this venture to
initiate a proper exhibition of their products and services. Globalization has a significant
impact on the business and can cater to the understanding of the trade initiated between
companies.
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Table of Contents
Introduction................................................................................................................................4
Task 1.........................................................................................................................................5
Task 2.......................................................................................................................................10
Conclusion................................................................................................................................27
Reference List..........................................................................................................................28
Appendix 1...............................................................................................................................30
Appendix 2...............................................................................................................................34
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Introduction
Globalisation in business is changing the concept of business operation in contemporary
global business industries. It is seen that companies are acquiring new strategies through
which they are acquiring different necessary factors in order to introduce sustainability in the
business process. By acquiring global markets, companies can acquire large markets through
which challenges such as financial issue can be mitigated properly. This study introduces a
business situation where a company Blackbird Coffee is willing to introduce its business in
UK by merging with Costa coffee. Through the study, benefits and challenges of joint
venturing are discussed properly.
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Task 1
A brief explanation of the proposed topic and why you have chosen it
The main aim of the joint venture company is to boost and increase the business of a
company through the integration of partnered resources that would have an impact on the
growth of a business. There are companies that make the use of partnership and agreements
with their partner companies are able to build a strategic alliance and share a compatible
understanding of the business. The project will emphasize on the factors that are associated
with the risks and benefits of a joint business venture. It will take into consideration the
coffee business of Australia and it joint collaboration with United Kingdom. Blackbird Cafe
is based in Australia and is themed according to the delicacies provided by the company.
Costa Coffee is based in UK and is a British multinational coffee house.
The companies that have been taken into consideration are Blackbird Cafe in Australia with
Costa Coffee in UK. The company Blackbird Cafe will infuse its business operations
through the medium of joint business alliances with the well thriving company in United
Kingdom. Therefore, the project will be explored to understand the potential abilities and
capabilities of the customers of UK to build in a strategic relationship with the Australian
business venture. Therefore, there would be factors that might pose probable risks for the
growth of the business. The research will take into consideration the probable benefits that
would enjoyed by the business. The international market of the company will be analysed
and their positive and negative aspects on the growth of the business. Therefore, the
significance of the research lies in the risks and benefits that are required of a business to
function successfully in the international market. It will serve the purpose of catering to the
limitations and the risks of a joint venture business for the growth of a company.
An aim and some objectives for your proposed research
Aim of the project
The aim of the research project is to classify the benefits and risks of the Australian cafe
Blackbird with a UK company known as Costa Coffee based in United Kingdom.
Objective of the project
The objectives of the business project will be clearly enumerated below:
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 To classify the benefits of making the use of joint venture partnership in the United
Kingdom
 To comprehend the negative factors that could hinder favourable business prospectys
of Blackbird Cafe with Costa Coffee
 To identify the various impact on the Australian company after the political situation
of BREXIT from the United Kingdom
 To assess the buying behaviour of the customers of the United Kingdom and initiate
marketing conditions
A brief discussion of the scope and limitations of the project
The term project scope is known as an essential factor, which involves planning and
documentation of goals and objectives for the project. This project takes into consideration
the cost and deliverables, which are a part of the proceedings of project. The researcher will
take into consideration the excluded and included scope of the research. This will be clearly
illustrated below:
Included Scope
The researcher will make the use of critical journals, articles and literary articles that would
pertain to the concept of globalization. However, a primary data collection will be done to
acquire an understanding of the business and the initiatives in joint venturing. It will acquire a
comprehensive understanding of the cafe business Blackbird and its partnership with Costa
Coffee.
Excluded Scope
The excluded scope of the research is the precise information and data that would have been
acquired through the medium of secondary data (Heagney, 2016). The research does not take
into account the qualitative data analysis of the business. Therefore, there is no scope of
getting beneficial critical analysis on the joint venture business between Blackbird and Costa
Coffee.
Resources and cost considerations.
The research is subjected to the use of resources and the cost and expenses of the business.
Therefore, the research will take into account the activities that are important for the growth
of business.
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Activities Time Period Per hour cost Total Sum
Picking out
resources for
research initiation
24 16 384
Collection of human
resources and inputs
for project initiation
48 10 480
Primary Data
Collection
36 20 720
Primary Data
Analysis
48 10 480
Expenses of project
and growth of
business
52 25 1300
Documentation of
final business project
24 15 360
Total = 3724
Table 1: Resource and Cost budget
(Source: Created by Learners)
A Gantt chart or work breakdown structure in order to provide timeframes and stages
for completion.
The researcher will take into account a significant timeframe in order to steer the process of
the business. Therefore, the researcher will take a month for the completion of business
activities. However, with an understanding of the work breakdown structure, the researcher
will initiate division of important tasks.
Number Activities Start Date Duration End Date
1 Starting Project 2/1/2019 1 2/2/2019
2 Outline of Research
methods
2/2/2019 6 2/8/2019
3 Data Collection 2/8/2019 8 2/16/2019
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4 Analyzing collected
Data
2/16/2019 6 2/22/2019
5 Forming conclusion
and recommendations
2/22/2019 5 2/27/2019
6 Documentation of
business project
2/27/2019 2 3/1/2019
7 Project Submission 3/1/2019 2 3/3/2019
Table 2: Gantt chart
(Source: Created by Learner)
Starting Project
Outline of Research methods
Data Collection
Analyzing collected Data
Forming conclusion and reccomendations
Documentation of busienss project
Project Submission
2/1/2019 2/11/2019 2/21/2019 3/3/2019
Figure 1: Gantt chart
(Source: Created by Learner)
A risk registers covering the main risks with the proposed research
This register identifies the probable factors that could be harmful while proceeding with the
project.
Risk
Description
Chance
of risk
occuring
Risk
nature Effect of Risk Outcome of Risk Ways to
eradicate risks
Poor collection
and division of
resources
Medium High This risk could
lead to a havoc
on the proper
research
This risk could
delay the growth
and understanding
With a critical
analysis of
resources, the
research will
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outcome of the
business
of business be able to thrive
No proper
analysis of
data
Low High This risk is
harmful as there
would be less
collection of the
proper and
survey and
questionnaires
It could result n
improper
collection of the
efficiency in the
research resources
A proper
understanding
and training
should be given
for achievement
of research
objectives
Issues general
in nature
associated
with research
Medium Medium A general
misuse of the
business
information
could hinder the
objectives of
the research
There would be
less data that
would cater to the
poor compilation
of the data
General issues
could be
prevented by a
proper research
Table 3: Project Risk Register
(Source: Created by Learner)
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Task 2
CHAPTER 1 Introduction
In contemporary world of business, drivers of globalisation are hugely influencing companies
through which modern-day companies are acquiring new markets in order to improve their
business in global context. It is opined by Stienstra and Martin (2017), global companies are
using new strategies in order to introduce sustainability in business through financial and
resource related challenges can be mitigated properly. This study introduces thorough
research regarding benefits and challenges of joint venturing in context of Blackbird Cafe
that is willing to introduce a joint venture with Costa Coffee UK. Through different chapters,
this research work has introduced a proper result and recommendations are mentioned.
Background of Companies
Blackbird Cafe is an Australian based beverage chain which has huge popularity among the
new age community of Australia. It is situated in the harbour of Sydney and its popularity in
the locality is commendable. CEO of the company is willing to expand its business into the
market of UK and merge its business with Costa Coffee UK. Costa Coffee is one of leading
coffee that is a UK based company. It has more than 3400 locations all over the world and in
the year 2016, the company has gained net income of £153 million (costa.co.uk, 2018).
Rationale
Joint Venturing in global business introduces huge opportunities and along with such
opportunities, certain threats of joint venturing also can be seen. In contemporary business,
joint ventures mainly face issues regarding improper political and economic condition. This
is an issue for Blackbird Cafe as the company is willing to expand its business in context of
UK. Achinivu et al. (2017) opine it; economic changes because of Brexit can affect foreign
companies through which economic condition of UK can be hampered. Aim of this study is
to highlight benefits and challenges of joint venturing considering mentioned companies.
CHAPTER 2 Literature Review
Joint Venture in business
According to Stienstra and Martin (2017), Joint venture in business is a new process of
business arrangement through which different parties in business industry agree to merge
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their resources in order to do any specific task in different business context. In the joint
venture business, it is seen that different parties have different responsibilities through which
financial functions are properly monitored. Apart from the different legal structure, in the
context of joint venturing, it is seen that the JV agreement is the most important legal
document where parties agree with different terms according to the objective of the company
(Versteven et al., 2018).
Theories and models of international business
Internationalisation of business in a contemporary business context is one of the most
practised processes of business. It is mentioned in Product Lifecycle Theory companies often
seek features of foreign markets through which sale of a company’s product or service can be
improved and the home business condition is also can be improved properly. It is opined by
Tolentino (2017) multinational companies acquire foreign markets in order to avail different
networks through which they can introduce diversity in their service and production
processes. According to Achinivu et al. (2017), there are Five motives for internationalisation
of a company which is seen in most of the contemporary business processes.
Figure 1: Motives for Internationalisation
(Source: Bonou et al., 2016)
Companies seek new markets across the globe in order to improve their market, brand name
and to acquire proper market growth. On the other hand, gaining an attractive customer base
is also an important one for the company through which production of both home and host
country can be improved. Efficiency of a company can be improved in the global business
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environment because of ever-present healthy competition among companies and healthy
resources through which a rich business process can be constructed properly. On the other
hand, Buckley and Ghauri (2015) opined that companies in global markets could have
enough human and capital resource through which they can introduce different beneficiary
strategies.
Monopolistic Advantage Theory is one of the most important theories in order to understand
international business in contemporary global business trends. This theory has mentioned that
international investments are mainly divided into two groups that are Portfolio Investment
and Direct Investment. If investors control foreign investment directly then it is called direct
investment otherwise it is called portfolio investment. In foreign business, capital investment
is the main thing which is needed to be hugely considered by companies who are willing to
expand their business in foreign markets.
Figure 2: Monopolistic Advantage Theory
(Source: Aguinis et al., 2016)
Benefits of Joint Venturing
Joint venturing has a huge history of business success through which rival companies often
use their resources to acquire success in different business condition (Dheensa et al., 2017). It
was mentioned in a report that Jaguar Land Rover, the Luxury carmaker of Britain had
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