Joint Venture Risks and Benefits: M&S and Fabiani Case Study

This project report examines the potential risks and benefits of a joint business venture between Marks & Spencer (M&S) and Fabiani, focusing on M&S's expansion into the South African market. The report begins with a project plan, outlining the topic, aims, objectives, scope, limitations, resource considerations, a Gantt chart, work breakdown structure, and a risk register. The project then delves into a detailed project report, encompassing an introduction, literature review, methodology, results, conclusion, and reflection. The report analyzes the strategic rationale for the joint venture, considering market dynamics, cultural differences, and financial implications. The findings highlight the importance of thorough market research, risk assessment, and strategic planning for successful international expansion. The project concludes with recommendations for M&S to mitigate potential risks and maximize the benefits of the joint venture, emphasizing the need for adaptive strategies to navigate the complexities of the South African market.

MANAGING A
SUCCESSFUL
BUSINESS PROJECT

Table of Contents
TITLE..............................................................................................................................................1
TASK 1- Project Plan .....................................................................................................................1
1) Explanation of the proposed topic and the reason behind choosing it...............................1
2) Aims and objectives of the proposed research...................................................................1
3) Scope and limitation of the project....................................................................................2
4) Resources and cost considerations.....................................................................................2
5) Gantt chart and work break down structure to provide time-frames and stages for
completion..............................................................................................................................3
6) Risk register including main risks with the proposed research..........................................5
TASK 2- Project Report ..................................................................................................................6
Chapter 1: Introduction ...................................................................................................................6
Chapter 2: Literature review............................................................................................................8
Chapter 3: Methodology................................................................................................................10
Chapter 4: Results .........................................................................................................................14
Chapter 5: Conclusion and recommendation.................................................................................23
Chapter 6: Reflection ....................................................................................................................24
CONCLUSION.............................................................................................................................26
REFERENCES................................................................................................................................1

TITLE
“To identify the risks and benefits of a joint business venture to enter international
market. A case study on Marks & Spencer and Fabiani”.
TASK 1- Project Plan
1) Explanation of the proposed topic and the reason behind choosing it
Marks & Spencer is a Britain based fashion retailing company which specialised in
offering home products, cloths and food items. Organisation was established by Michael Marks
and Thomas Spencer in 1884. At present, company is successfully operating approx 980 stores
within UK. As company operates at global level, to enhance its business presence in African
continent M&S is going to joint venture with Fabiani which is a clothing retailer company
offering high quality fabrics and cut suits. Fabiani is renowned for its style, passion and quality
which is offered to customers. Thus, joint venture of M&S and Fabiani will results in achieving
successful outcomes for both companies.
M&S is going to expand its presence in South Africa due to some specific reasons. The
main reason behind choosing this destination is its wide population. Due to high population and
people preferring trendy products, South African markets promises high revenues and
profitability to the company. After Brexit, firms within UK have got considerably impacted. To
overcome its impact, company is expanding its presence in new international market.
2) Aims and objectives of the proposed research
Aims:
“To identify the risk and benefits of joint business venture with Fabiani company in
Africa. A case study on Marks & Spencer”.
Objectives:
 To understand the concept of Joint venture
 To evaluate the benefits of joint venture for M&S while expanding their business
presence in South Africa with Fabiani company.
 To analyse the risks associated with joint business venture for M&S while expanding
their business in South Africa with Fabiani.
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3) Scope and limitation of the project
From the company perspective, it can be considered that the scope of this project will be
wider. This is because while expanding its business presence in Africa, M&S will formulate
different strategies and planning that will results in increment of sales and revenues which will
also enhance the scope of the sector in which M&S is operating. In case of researcher, scope of
research will be high. Research is performed with the help of qualitative method in which new
data and information will be collected with the help of questionnaire. This questionnaire is going
to be filled by employees and customers of M&S. This research will benefits the researcher in
enhancing its both personal and professional knowledge which will helps in sustaining a high
career growth. Due to this, scope of research is very high
Limitations associated with project: M&S is going to joint venture with Fabiani so that
its business presence can be expanded within Africa. In achieving this, a project is initiated by
the company but it includes some limitations (Dutta and Bose, 2015). Some of these are
mentioned below:
 In case of company, lack in data or information can be a limit to the scope of the project.
As South Africa is a new market for M&S, it is essential for manager of company to
analyse market conditions and preferences properly otherwise joint venture can results in
business failure.
 In case of researcher, limited access to data, people and organisation along with weak
communication skills can be a big limitation. As this will limits the ability of researcher
to carry-out research.
 Difference in culture and language in-fluency can be another potential limitation while
perusing research.
4) Resources and cost considerations
Resources helps the project manager in acknowledging those materials that are required
to perform project operations desirably. In case of M&S, potential resources of company are
technology, financial resources, human resources, machinery etc. as all these materials will allow
the firm to earn high revenues and profitability within international market. For researcher point
of view, main resources will be Online surveys, books, journals, magazines, social media etc.
Cost is another essential aspect which must be considered by project manager in M&S, so
that the revenues and profit margins of the company can be managed and retained properly. To
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conduct appropriate research, estimated cost required by researcher will be 120 pounds. In case
of M&S, estimated cost is 157,000 pounds. The researcher will utilise this cost in travelling
purpose for gathering the information required for conducting the research.
Total forecasted budget
Particular 2018-19($)
Implementing technology cost 17000
Promotional expense 50000
Advertisement expense 35000
Catalogues 10000
Training charges 45000
Total cost 157000
5) Gantt chart and work break down structure to provide time-frames and stages for completion
Work break-down structure: It is defined as deliverable oriented breakdown of a
project in small manageable components. It is a key project deliverable which organises the
project work into smaller sections (Tidd and Bessant, 2018). This structure will helps in
identifying potential risks in project which is initiated by M&S to expand their presence in
African continent.
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Gantt chart: It is defined as a graphical representation of a project schedule. This is a
bar chart that specifies the initiation and end dates of different elements of a project along with
resources. It will benefits the project manager of M&S to acknowledge dependency relation
between diffident project activities in a desired way (Dutta and Bose, 2015).
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6) Risk register including main risks with the proposed research
Risk register is a technique that will assists in documenting risks and an action plan to
manage those risk. To manage risk successfully, it is essential for project manager of M&S to
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formulate an effective risk register so that potential risk while expanding business in South
Africa can be acknowledged.
S.
No.
Risk
Description
Likelih
ood
Impact Mitigation Contingen
cy
Pre
action
weightin
g score
out of 10
Post
action
weightin
g Score
out of 10
1 Over cost risk High High Keep a proper
record for costs
and expanses,
cheap resources
Arrange
alternate
resources
which are
cheaper
7 5
2 Technological
risk
high high Updating of
software and
online
applications
Implement
new
technology
on regular
basis
7 6
3 Operational
risk
Mediu
m
Low By performing
operational
activities in a
systematic
manner
Before
implementi
ng a
strategy,
consider its
outcomes
so that
undesired
strategies
can be
avoided.
1 3
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TASK 2- Project Report
Chapter 1: Introduction
Background of the study
Managing a project is a one of the most crucial aspect in management. Project
management is specified as a combination of procedures to attain a management objective with a
specific time-frame. To manage a project in a successful manner specific skill, knowledge, tools
and techniques are required. Every project requires specific amount of resources so that all the
business related activities can be performed desirably. For this particular research, the chosen
company is Marks & Spencer which is a British retailer organisation dealing in clothing, food
products and luxurious home products. It is a public limited company which was established in
1884 by Michael Marks and Thomas Spencer. Headquarter of M&S is registered at London, UK.
At present, company posses a successful online presence in Europe, Asia, Australia, North
America and middle east Asia (Fageha and Aibinu, 2013). Company have maintained successful
joint ventures in Greece, India and Czech. To expand its business further so that high
profitability can be achieved, company is going to joint venture with Fabiani which is a retail
company offering suit cuttings and high quality fabric. Firm was founded at 1978 in st. George's
Mall, Cape town. At present this company has 25 stores countrywide. Joint venturing with
Fabiani will benefits M&S in gaining competitive advantage over rival companies at global
level.
Rationale of the study
Main reason for selecting the topic “ risks and benefits of a joint business venture to enter
international market” is to understand that what kind of risks and benefits a company can
encounter while expanding their business in international market or at global level. This research
will helps in understanding all those aspects which are required to be acknowledged to sustain a
firm position within new market (Storey, Basterretxea and Salaman, 2014). Risks such as small
market size, currency change fluctuation, cultural differences, market instability will be
acknowledged with this research in an appropriate manner. Before joint venturing with another
company, M&S needs to acknowledge all the important aspects which can be a potential risks for
company in future. By this, company can eliminate those aspects which can acts as a barrier in
the success of M&S. If company joint venture with Fabiani without analysing all conditions
properly, then this collaboration can results in business failure too.
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The concerned project is based on the analysing the risks and benefits that can be faced
by a company during a joint business venture with other organisation to expand its business
presence within international market. This is one of the best method to expand business presence
of M&S in South Africa as Fibiani is already a well established company in South Africa due to
which products offered during joint-venture will be widely accepted by existing customer base of
Fabiani (Jeston, 2014). By this revenue and market shares of company will enhance at global
level. Therefore outcomes associated with a joint business venture highly depends upon the
research which is carried out to examine the new market where company is going to expand its
presence.
Aims:
“To identify the risk and benefits of joint business venture with Fabiani company in
Africa. A case study on Marks & Spencer”.
Objectives:
 To understand the concept of Joint venture
 To evaluate the benefits of joint venture for M&S while expanding their business
presence in South Africa with Fabiani company.
 To analyse the risks associated with joint business venture for M&S while expanding
their business in South Africa with Fabiani.
Chapter 2: Literature review
Literature review is a kind of scholarly paper that involves the substantive and current
knowledge about a specific topic. Along with this, methodological and theoretical contributions
for a particular topic are also specified. These are secondary resources and doesn't denote any
new report & experimental research and findings of literature review are founded in academic
journals (Nicholas and Steyn, 2017). Literature reviews are of three kinds i.e. exploratory,
evaluative and instrumental. Main objectives of this literature review is to survey the literatures
associated with risks and benefits of joint business venture in international market. All the
required information will be transformed into a summery. Also critical analysis of gathered
information will takes place due to which positive and negative aspects of joint business venture
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will be acknowledged in a desirable manner. Literature review benefits the researcher in
justifying the reason for research in a convincing manner.
Concept of Joint venture
INTRODUCTION
Joint venture is a temporary kind of business activity that is performed by more than one
organisation to earn high profitability in a contractual manner. When the business venture will be
completed, this joint partnership will be over. Business persons which enters into this kind of
partnership is called co-venturing.
MAIN BODY
According to Kenton. W, 2018 “ A joint venture is described as a business arrangement
in which different organisations usually two parties share their resources so that business
objectives can be accomplished in a desired manner.” These business objectives can either be a
new business activity or project. In case of joint business venture between M&S and Fabiani,
both organisations will be responsible for costs, expanses, losses or profits. Hence, this business
venture will have a specific identity which is separate form the identities of parent companies.
CONCLUSION
To form business venture, M&S and Fabiani must sign some sort of written agreement so
that all the terms and conditions related with businesses can be stated clearly. After joint
venturing, M&S and Fabiani will contribute physical, managerial, intellectual and financial
resources so that business activities can be carried out properly. Also, risks and returns will also
be shared in a predetermined ratio.
Benefits of joint venture for M&S while expanding their business presence in South Africa with
Fabiani company
INTRODUCTION
There are many benefits to the companies for joining their business interests such as
shared expenses, enhanced credibility, intellectual and product property gains, new market
penetration, large market reach etc. A business joint venture will enable the growth of a company
without borrowing finances and funds or looking for investment form outside.
MAIN BODY
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According to Martyak. M, 2014, there are various benefits of joint business ventures to
organisations of all size. Usually a joint venture takes place between a large and small or
medium scale organisation. As per the opinion of Murray. J, 2019, an organisation will form
joint business ventures to combine resources so that no shortage of resources will be faced by
company during business operations. Also to combine expertise, so that different activities will
be carried out by experts and specialists according to their business field. Also, joint venture will
benefit M&S in saving their money in promotion and advertising their products and offerings as
expanses will be shared by both companies.
CONCLUSION
From above information it is concluded that this business expansion method is flexible as
it can have a limited lifespan or until both parties wants to maintain business relationship. By
this, it will be easy for M&S to attain its expected goals in a specific manner. By this, M&S will
be benefited to expand their presence in South Africa with the help of Fabiani company.
Risks associated with joint business venture for M&S while expanding their business in South
Africa with Fabiani
INTRODUCTION
There are some risks which are involved in business ventures such as it lacks in
specifying the clarity regarding responsibilities and obligations of each partners. Due to business
venture in two different parties, clashes due to respective management styles can also takes
place.
MAIN BODY
According to Chowne. P, 2017 “ A joint venture seems like partnership but these two
aspects are very different from one another in their tenure. Joint ventures are goal specific and
get dissolved when these objectives will be realised. As techniques of both M&S and Fabiani to
manage business will be different, this can results in issues and conflicts. Other than that,
imbalance in resources and capitals which will be invested by both companies can be faced. This
will be due to the conflicts of interest (Polonsky and Waller, 2018). If both organisations i.e.
Marks & Spencer and Fabiani will have different business objectives and expectations then this
joint business venture will fail due to which both companies will have to face heavy loss of
revenues and market shares.
CONCLUSION
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