Risk and Benefits of a Joint Business Venture for Market Expansion

This report analyzes the risks and benefits associated with a joint business venture, specifically focusing on The NAV People's strategy to enter the Spanish market. It begins with an introduction outlining the background of the research, the problem statement, project aims and objectives, and the justification for selecting the topic. A comprehensive literature review explores the benefits such as risk sharing, resource optimization, and access to new expertise, as well as the risks including cultural differences, lack of asset protection, and limited venture lifespan. The methodology section details the primary data collection method, sampling techniques, and ethical considerations. The results section presents qualitative data analysis. The report concludes with recommendations for overcoming joint venture risks and a reflective chapter. Appendices include a project log book and interview transcripts, providing detailed insights into the research process and findings.

Running head:RISK AND BENEFITS OF A JOINT BUSINESS VENTURE
RISK AND BENEFITS OF A JOINT BUSINESS VENTURE TO ENTER INTO SPAIN
MARKETS: A CASE STUDY OF NAV PEOPLE, UK
[Name of the Student]
[Name of the University]

1RISK AND BENEFITS OF A JOINT BUSINESS VENTURE
Table of Contents
Chapter 1: Introduction..............................................................................................................3
1.1 Background of the research study....................................................................................3
1.2 Problem Statement...........................................................................................................3
1.3 Project Aim and objectives..............................................................................................4
1.4 Justification for selecting the topic..................................................................................4
Chapter 2: Literature Review.....................................................................................................5
2.1 Introduction......................................................................................................................5
2.2 Benefits of Joint Venture for entering in Spain Market for The NAV People................5
2.3 Risks of Joint Venture for entering in Spain Market for the NAV People......................6
2.4 Strategies used to overcome with the joint business venture risks for entering in the
Spain Market..........................................................................................................................7
Chapter 3: Methodology............................................................................................................9
1.1 Primary Data Collection Method.................................................................................9
1.2 Sampling and Data Collection...................................................................................10
1.3 Primary Data Collection Instrument..........................................................................11
1.4 Ethical Considerations...............................................................................................11
Chapter 4: Results....................................................................................................................13
4.1 Introduction....................................................................................................................13
4.2 Qualitative Data Analysis..............................................................................................13
4.3 Summary........................................................................................................................16

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Chapter 5- Conclusions and Recommendations......................................................................17
5.1 Conclusion......................................................................................................................17
5.2 Recommendations..........................................................................................................19
Chapter 6: Reflection...............................................................................................................20
References................................................................................................................................22
Appendix..................................................................................................................................23
1. Project Log Book..........................................................................................................23
2. Interview Transcript.........................................................................................................25
2.1 Interview Transcript 1................................................................................................25
2.2 Interview Transcript 2................................................................................................27
2.3 Interview Transcript 3................................................................................................29
2.4 Interview Transcript 4................................................................................................31
2.5 Interview Transcript 5................................................................................................33

3RISK AND BENEFITS OF A JOINT BUSINESS VENTURE
Chapter 1: Introduction
1.1 Background of the research study
The research study is based on risks and benefits of the joint venture for entering into
the Spain market with reference to a small company, The NAV People in United Kingdom.
The selected company, The NAV People is a business and management consultant in
England and an experienced dealer of Microsoft Dynamics ERP software. The mission of the
company is to deliver greater software and excellent services to the customers. The company
is focused on developing their business functions by improving over their back office
functions like compliance and regulations. The study is analysing how the small company is
trying to enter in Spain market by using joint venture mode so that they can gain growth in
the business.
Caselli and Negri (2018) stated that joint venture is a term which is used to expand a
business in the international market for attaining business growth and expansion. Colombo,
D’Adda and Pirelli (2016) argued that joint venture has both benefits and risks. Owning a
partnership is presented a number of benefits such as sharing of risks, improvement over the
operational competencies and ability to collaborate with others. This partnership is also risks
of potential conflicts among the business partners, differ in culture, legal structure, technical
plus managerial competencies and lack of protection over their business assets.
1.2 Problem Statement
The problem of this study is that due to joint business venture for entering in the new
and international market, strategic alliances cause risks to the project. While entering in a
new market, it is difficult to conduct a market research of the country where the business is
tried to enter. There is an increase in capital investment and the researcher should understand

4RISK AND BENEFITS OF A JOINT BUSINESS VENTURE
the marketing rules and regulations of Spain. While entering in international market of a
small business, there is also problem of increasing in competiveness.
1.3 Project Aim and objectives
The aim of this research study is to examine the risks as well as benefits caused due to
joint venture of The NAV People, UK to enter in Spain Market. Following are the list of
objectives based on which entire study is carried out such as:
 To explore conceptual understanding of the business joint venture
 To examine possible benefits of joint venture for The NAV People to enter in Spain
market
 To examine possible risks of joint venture for The NAV People to enter in Spain
market
 To recommend business strategies to overcome with the risks of joint business
venture to penetrate into Spain market
1.4 Justification for selecting the topic
This topic is justified for this research so that the reader can understand the concepts
of the joint business venture for entering into the international market. This research study
helps to collect information about possible risks as well as benefits which are caused for joint
venture for entering in a particular market. The literature gap is that the study is only limited
to the risks and benefits of the joint venture for entering in the international market. The
study is only limited to conducting interview of the joint venture managers and it is only
carried out based on a small company.

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Chapter 2: Literature Review
2.1 Introduction
Cumming and Zahra(2016) stated that the joint venture is the business preparation in
which the organization is sharing ownership, business expenses, return of the cost
investments, profits and others. This purpose of this particular chapter is based on
establishing the academic knowledge based on the risks as well as benefits of the joint
venture to enter in the international market of Spain. With help of foundation, the researcher
is required to enhance the selected research topic in detailed way so that the reader can
understand the critical perspectives of the study. The application related to theories as well as
models of the risk allocation will add value to the literature study such that in other chapters,
it will use for better analysis of the research related outcomes. In order to gain a positive
business strategy, the business organization is expanding by joint business ventures with
other international and overseas organizations.
2.2 Benefits of Joint Venture for entering in Spain Market for The NAV People
Following are the benefits of the joint venture such as:
Risk Sharing:In case there is failed of the joint venture projects, and then one
company is not alone responsible to bear the failure cost. As the company is shared
partnerships with other company, therefore there is sharing of expenses which would support
the business losses (Gao, Wang and Che 2018).
Better Resources: The joint venture is formed with better human and non-human
resources such as experienced staff and technology(Yan and Luo2016). All the equipment as
well as capital required for the project plan is used now in the project plan.

6RISK AND BENEFITS OF A JOINT BUSINESS VENTURE
New Insight and Expertise: Starting a joint venture among two of the companies
provide with an opportunity to achieve new insights as well as expertise (Shen and Wang
2018). In case of NAV People, the Spain market is now easier to understand provided with
the strategic partnerships.
Better Collaboration:Even both the partnered companies has a specific business
goals, therefore it can lead to create a better as well as long lasting business relationships and
collaboration among two of the companies (Dollar 2017). It helps to meet with the business
needs, achieve growth and expand the business in the international market.
2.3 Risks of Joint Venture for entering in Spain Market for the NAV People
Vaccarini, Spigarelli and Tavoletti(2016) pointed that the main risks of the joint
venture in Spain are conflicts of the internet among the two parties and dependence of partner
to make business related decisions. According to Ward and Zheng(2016), it is required to
adapt to different culture in Spain and market which is unknown to the NAV People company
as it is operated in UK and not familiar with the Spain market. There is also possibility of
integration as well as poor communication among the business partners so that it becomes
complex to discuss the business related issues and problems. Following are the risks of the
joint venture such as:
Difference in culture: There is a clash of cultures as well as management styles
among the business partners which is resulted in poor cooperation as well as integration.
People are from various beliefs, as well as preferences which can cause in a way that there
are difference suggestions of both the business partners (Miller and Weinberg 2017).
Lack of protection of business assets: As two different companies from two different
countries are working together, there is an imbalance of the expertise, capital investments as
well as business assets (Gómez-Miranda et al. 2015). It provides a negative impact on the

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business growth caused due to joint venture. The risk of joint venture is that the structure is
offered no such liability protection to the involved business parties.When the assets of joint
venture are not covered with debts as well as obligations of the company, the business
partners should loss the personal assets to that point where the debt becomes to be satisfied.
Therefore, the company should loss assets as result of obligations of business.
Limited life: The joint venture is formed for limited period of time. The business
venture is come to an end when the company can fulfill purpose for which it is being formed
(Park Vertinsky and Becerra 2015). Death as well as withdrawal of the business partner is
caused automatic termination of the joint venture. The joint venture is being terminated
automatically when the terms are contained in the joint agreement is occurred.
2.4 Strategies used to overcome with the joint business venture risks for entering
in the Spain Market
In order to overcome with the joint venture risks, the business management should
take strategic decisions so that relationship among the two companies should be better. In
order to enter in Spain market, The NAV People should ensure that they know their future
partners based on the financial as well as operational situations. Pallares-Barbera (2017)
discussed that the company should decide on each of their business partner’s responsibilities
before they are sealing their agreement. It limits potential to misunderstand the business
partners in case when The NAV People should start their business with them. They should be
written of verbal agreement so that later there is no confusion among the business partners.
According to Cumming, Grilli and Murtinu (2017), the joint venture is flexible which a
context to the organizational requirements is. The agreement among the companies is detailed
terms as well as conditions with respect to the business activities which are taken place. In
this study, UK based small company, The NAV People has a joint venture for entering in the
international market such as Spain Market so as to achieve a market growth and expand their

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business overseas. In this case, the NAV People should follow market rules and regulations
before entering in the joint venture with other company in Spain (Lasserre 2017). Before
entering in the international market, the company should set their financial as well as
operational goals.According to Dollar (2017), both the business companies should have clear
governance as well as management organizational structure those are helping them in their
decision making. Gil and Carrillo(2017) stated that it is required to set a clear business
model, align with the business objectives, structure the business governance and staffing the
joint venture are the business strategies which help to overcome with the risks of joint
venture. The NAV People should adapt those strategies should that they can get success after
entering in the Spain Market and can do a better business.

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Chapter 3: Methodology
1.1 Primary Data Collection Method
In this particular research study, primary data collection method is used where the data is
collected based on the interview of the joint venture managers. It is collected by means of the
research project in mind and directly from the prsimary sources. As compared to other data
collection process such as secondary data collection collected through journal articles, blogs
and others, primary data collection method is expensive as well as time consuming (Kumar
2019). Based on the selected research topic, this data collection method would be suitable as
it will perform a market research of Spain to collect data based on their current market
position and business activities so that the NAV People should enter their market for joint
business partnerships. The primary data collection method is primary in nature and it is
related to the research problems which are identified in Chapter 1 for this particular research
study. The collected information will provide specific details that the researcher is wanted to
know as well as report a way that the benefits of specific situation is being analyzed. Through
the interview of the respondents, the data is collected from selected population or sample size
of 5 joint venture managers.
Main advantage of this primary data collection method is that the data are being collected
personally and it is directly related to the researcher’s study. Based on the qualitative
research, the primary data collection method is consisted sample size which is the population
selected to conduct the interview. Other advantage of this method is that the researcher is on
control of how as well as from where the data is to be collected (Silverman 2016). The
primary market research is a source of latest as well as up-to-date information as it is
collected directly from field into real time. The information are to be collected by the

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researcher and it is not shared with others. The information remains hidden from current as
well as possible competitors.
The disadvantage of the primary data collection is that it is expensive to collect data as
well as it also takes long time to process the data collection as interview method is used to
collect data. Interview method is a time consuming process as it can set up, interview,
transcribe, analyse, take feedback as well as report the interview in written form. The way to
understand as well as transcribe the interview is different and therefore the interview result is
also different. As the researcher is in charge, therefore there is no back up of the responses, if
there are any mistakes after entering the responses; therefore it causes errors (Taylor, Bogdan
and DeVault 2015). It will difficult to analyze if there is anything for comparison. As
compared to secondary research, it is expensive as there is involvement of marketers as well
as expense to prepare and carry out the interview.
1.2 Sampling and Data Collection
The sampling method is a process to select the sample members from population. In
this particular study, purposive sampling method is selected. Through this sampling
technique, a limited number of people are selected those have expertise and knowledge
into the selected area being researched. The entire process of sampling is to be done based
on single step with each of subject designated self-sufficiently of other members of
population. It is the critical element of entire interview research design process. The
target population is joint venture managers of the selected company, NAV People from
which the sample is being carried out. The total sample population is group of people
those are taking part in the research investigation. People those are taking part in the
research study and providing their responses for the research are the research participants.
The sample size for this particular research study is 5. The data are to be collected by
means of interview method and the participants selected for this study are joint venture

11RISK AND BENEFITS OF A JOINT BUSINESS VENTURE
managers of NAV People. There are total of7interview questions linked with the research
questions.
1.3 Primary Data Collection Instrument
In this research study, the selected questions for the interview are open ended
questions which are easier as well as quicker for the participants to answer particular
questions.The interview method is defined as the qualitative technique which is involved
to conduct intensive of the individual interviews with smaller number of participants for
exploring perspectives of the specific idea.The researcher has performed structured
interviews with series of questions that the interviewees are required to answer. The data
analysis is tending to straightforward as the researcher can evaluate as well as
dissimilarity of various answers presented to same questions.The answers of each of the
respondents are easier to code as well as analyze and also easier to compare the responses
of each individual respondents. All the selected questions are linked with the literature
study so that it can provide answers to the benefits and risks of joint venture for entering
in the international market. It is carried out to meet with research objectives as well as
aim of the study. The selected interview questions are related to literature review as it
researched about the benefits and risks of the joint venture which helps to understand the
reader related to if joint venture is required to enter into the international market.
1.4 Ethical Considerations
The entire research study is carried out based on the research guidelines. It is seen that
entire research study is carried out in such a way that it should complete on scheduled
time period and ensure that the data are to be collected to conduct the research with
accurate knowledge of the researcher. The data are collected in secured place so that it is
not accessed by any third party person. The entire questions are prepared based on the
research objectives and aim and there is no such question in the interview those can hurt