Effects of Joint Venture on Morrison's Business in China Market

This research proposal examines the impact of a joint venture on Morrison's business expansion into the Chinese market. The proposal outlines the research aim, objectives, and questions, focusing on the concept of joint ventures as a market entry mode. It explores the benefits of this strategy, such as access to new markets, advanced resources, and brand enhancement, while also addressing potential challenges like foreign regulations and cultural differences. The literature review provides insights from various authors on joint ventures. The proposal aims to identify the significance of joint ventures for Morrison, recommending ways to increase sales and profits in China. The report emphasizes the importance of understanding local market dynamics, mitigating risks, and developing new products to gain a competitive advantage. Overall, the research seeks to provide a comprehensive analysis of Morrison's joint venture strategy in the Chinese market, offering valuable insights for business expansion in emerging markets.

RESEARCH
PROPOSAL

Table of Contents
TITLE .............................................................................................................................................1
CHAPTER 1: INTRODUCTION ...................................................................................................1
CHAPTER 2: LITERATURE REVIEW: .......................................................................................3
CHAPTER -3 RESEARCH METHODOLOGY ............................................................................8
CHAPTER 4: DATA ANALYSIS AND INTERPRETATION....................................................12
CHAPTER 5: REFLECTION, CONCLUSION AND RECOMMENDATION...........................23
REFERENCES .............................................................................................................................26

TITLE
“To identify effects of Joint Venture for Morrison while expanding their business in
China for increasing sales”.
CHAPTER 1: INTRODUCTION
Research proposal that clearly defines a research questions or hypothesis, supported by a
literature review
Market entry strategy is identify as an effective method in which an enterprise enters a
new market. It is a planned distribution and deliver way of services or goods to a new target
market. In the export and import of services, it refers to the establishment, management and
creation of contracts in a international market or foreign country (De Villa, Rajwani and Lawton,
2015). In this research proposal, chosen organisation is Morrison, they decide to expand their
business operation in emerging market by using Joint venture. In this report main organisation is
Morrison and it has been suggested that this company should make partnership with Marks &
Spencer that is an existing firm in United Kingdom. It is an arrangement or agreement between
tow or more parties to work together for a specific motive or on a specific project. In the joint
venture, different participants or players may have various shares, resulting in certain level of
loss or profit. Main purpose of conducting this research proposal is to identifying the
significance of entry mode for an organisation while they decide to expand their business.
Background of the research
Morrison is the largest supermarket chain in the United Kingdom. It was founded by
William Morrison in 1899 in Bradford, West Yorkshire, England. Company mainly specialize in
selling of Clothing, Books, food and drinks, Magazines, CDs and DVDs. Along with this,
company wants to expand their business operations in emerging market. For this, there are
different entry mode which will support an organization to successfully enlarge their business.
Joint venture, Export, Foreign direct investment are known as main market entry strategy which
support an organization to expand their product, services and operation in that country. All these
are beneficial and useful but Morrison decide to use Joint venture (Hennart and Slangen, 2015).
It is a type of cooperative arrangement or agreement between two or more independent parties
which track to the establishment of an another entity are called as parent company. Joint ventures
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gives large capital fund and suitable for main projects. Such type of entry mode also support an
enterprise to maximize their sales and profitability.
Research aim: “To examine the effects of Joint venture on Morrison with the aim of
expanding their business in China market for increasing sales”. A case study of Morrison.
Research objectives:1. To examine the concept of joint venture as an entry mode.2. To find out main issues faced by Morrison while expanding their business operation in
emerging market like China.3. To investigate importance of joint venture for Morrison while expanding their business in
China market.4. To recommended different ways through which Morrison can easily increase their sales
and profit.
Research questions:
1. What are the concept of joint venture as an entry mode?
2. What are the main issues faced by Morrison while expanding their business operation in
emerging market?
3. Why joint venture is importance for Morrison while expanding their business in China
market?
4. What are the different ways through which Morrison can easily increase their sales and
profit?
Rationale of the Research:
Main reason behind selecting this topic is to identify significance of joint venture for
Morrison while expanding their business in China market. It is one of the best and effective entry
mode because this make large project and move key projects possible and feasible (Hernández
and Nieto, 2015). Such method have direct participation or involvement in the local market and
hence gain a good understanding of how it work. This method also essential for the future
growth and success of company by providing large amount of capital. Joint venture is good for
the M&S because it help them to grow their business functions speedily. It is also essential for
the Marks and Spencer to increase their productivity and profitability level easily.
Time Scale:
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CHAPTER 2: LITERATURE REVIEW:
It is identify as a scholarly paper, which cover the actual knowledge about substantive
findings, as well as methodological and theoretical contribution to a specific topic. In this section
of research, different authors and writers are give their point of view about the research topic.
Concept of joint venture as an entry mode
According to Wolfe, (2018), joint venture is most of the popular or famous modes of
entry in which two or more entities combine resources in order to sell services or products.
Different nations with tightly controlled and monitored economics, such as China. Although joint
venture give international organizations with a partner knowledgeable or experienced in the
international marketplace. Joint venture help a Morrison supermarket to expand their business in
emerging marketplace without any difficulties.
Joint venture is an approach of initiating an agreement in which two or more than two
parties work together to maximize utilization of resources to its fullest. It is an short term
partnership with specific time period which is set by the parties while signing the deal. Both
parties have equal responsibility which is related to loss or profits as it is divided according to
the deal signed. Venture could be in same industry company or with others, it depends upon the
preference of both the parties. According to Murray, ( 2018), Joint Venture is an enterprise of
two or more than two business entities for the purpose of conducting any business activity. Main
purpose of Joint Venture contracts to is to combine the strengths of both parties and remove the
weakness by working together so to increase competitive advantage over others and besides this
it also helps to minimize the risk of getting failed in the market. For example, if a company
wants to increase their market share in the new market then it can collaborate with other
company to produce a unique product which can help both the parties to increase their customer
base in market. Business entities should clear their purpose, goals and limitations before entering
into joint venture with new entity as it will decrease the chances of conflict in future. A joint
venture agreement should be specific, measurable, attainable, achievable and time realistic (De
Villa, Rajwani and Lawton, 2015). There are two types of JV, In domestic joint venture
companies collaborate with other entity which are operating their business in the same
nationality. In international JV, foreign companies partnered with domestic company of other
country to increase their market share and profitability.
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Importance of Joint Venture for Morrison while expanding their business in China market
There are various importance of Joint venture for Morrison while enlarging their business
in China market. The objective of JV is to increase market share and profitability of partner
companies while working. Importance of Morrison is explained below,
 Access to new market: According to Murray, (2018) JV can help the business entity to
enter into new market as all the rules and regulations is handled by local entity. If
Morrisons is entering into China which is a new market for the company then they have a
high chances of improving their profitability through increasing the customer and market
base. Other than that Morrisons can also increase their product portfolio and market size
in China.
 Advanced resources and technology: Company can only increase their product quality
or quantity if they are using the latest technology which could be the key factor for
attaining competitive advantage (Hennart and Slangen, 2015). Entity which are entering
into JV have their unique strengths which other company do not have. If the strengths and
resources of both the companies are combine then it will help them produce a unique
product. Local partner of china productivity will increase due to sharing of advanced
resources by the global brand Morrisons. Morrisons can also use resources of local entity
like their knowledge of customer and market base, their buying behaviour etc and
considered while making a new product.
 Enhance the credibility and brand image: If company is expanding their business into
new markets then brand awareness also improves with time. Company prefers to create
positive image in the mind of customer by doing CSR activities or advertising as it helps
them to increase their sales. If Morrisons enters into the market of China and investing lot
on R&D and promoting the band and their products then chances of increase in brand
equity is also high.
 Avoid barriers: The main benefit of JV is that it helps the foreign company to enter into
new market while all the legal issues are faced by the local partner (Hernández and Nieto,
2015). If Morrisons is entering into china with local entity then they must be aware about
their country's rules and regulations which will help the Morrisons by reducing their cost
and time while fulfilling the rules and regulations. Chances of subsidiary by local
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government is also high as new plant of Morrisons will reduce the unemployment rate of
China.
 Risk mitigation: Risk mitigation means when chances of loss is also divide among
partners. Cost incurred due to loss in business or profit gain while doing business is share
by Morrisons and local partner. Due to this investment done by both companies decreases
significantly.
New product development: If different business entities are coming together to work for
a same project then chances of producing the new and unique product is also high which can also
help the company to gain the competitive advantage over their competitors (Johanson and
Mattsson, 2015). Morrisons can work with local company to produce a product which can satisfy
the needs and demands of the customers. New product development can help the company to
increase their market share and profitability.
Main issues faced by Morrison while expanding their business operation in emerging market
Foreign regulations and Laws: According to the Reynolds, (2018) In order to getting
business structure in emerging market, gaining a comprehensive knowing of the local regulations
and laws governing their target markets. It is a main issue which is faced by Morrison and effect
on its operations and sales in a direct manner.
Promotional channels: It is another issue which is faced by companies while they decide
to enlarging their operation in China market. Beside this, company confused what type of
promotional channel they use (Kraus, Ambos, Eggers and Cesinger, 2015). There are mainly two
type of method such as traditional and modern. It is a costly method for the company which
highly impact on its profitability and productivity in a direct manner.
Rules and regulations: Laws in United kingdom is different when compare to china's.
They are more strict towards the JV as China government refuse foreign companies to enter in
their country and use their money to increase their profitability. Employment and working
condition law are strict and Morrisons have to follow it to stay away from any legal issues.
Culture of china and their working style: Working culture of china is opposite to to
UK. China people prefers to work on a Sunday but the opposite happens in UK. Proper research
analysis should be done by the company before entering in china market (Bouncken, Plüschke,
Pesch and Kraus, 2016). As chances of clashes are high due to cross culture environment in
workplace. The deal between cannot be terminate before the deadlines which has been set in the
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starting thus more loss could be incurred by the Morrisons if the working style does not match to
other partner.
Conflict while decision making: Perceptions while taking decision over their business is
different for both the parties. As Morrison is aggressive while making strategies or making
decision while local part prefers to wait and analyse the external environment while taking
decision. If there is conflict between the parties then it will affect the productivity and
performance of the Morrisons in negative way.
Allotments of capital and their excess: Companies are coming together to work on a
single product but the work is divided according to their skills and capabilities. Both the
companies want to get more funds to give their best performance which will raise the conflict
among their executives (Burns, 2016). Apart from that currency fluctuations and exchanges rates
plays an important part while investing in other companies.
Wrong local partner: Chances of getting failed in JV due to less synchronization among
the entities are high. If local partner of china is not performing up to the level of Morrisons then
it will affect the overall productivity of the venture which will create the negative impact in the
balance sheet of Morrisons. If local partner is not removing their weakness or if there leaderships
skills is not effective then it will hamper the effectivity and efficiency of the JV.
Competitors: China is a vast market for any company and due to this the competition is
also high. There are many big players in retail industry like Auchan, Carrefour or city super who
offers products in low prices as compare to Morrisons. Local partner should be aware of
strategies used by the competitors and make their strategies in consult with Morrisons to tackle
them. JV can only compete with key players if they invest more on promotions and advertising
and try to set their profit margins low as it will leads to less price of product which will attract
more customers.
Different ways through which Morrison can easily increase their sales and profit
There are different ways which is used by the Morrison in order to increase their sales
and profit. Some ways are determined as under:
Introduce new product or service: This is identify as an effective and essential way
through which Morrison can easily increase their sales and profit (Cooke and Huggins, 2018).
Beside this, company decide to lunch new product which will help them to maximize customers
base and achieve better outcomes within predetermined time period.
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Increase promotional channels: It is another important and essential way via which
Morrison can easily maximize their sales. In this, they use modern method of promotion such as
Facebook, Twitter, Instagram and many other. All this channels help an organization to easily
introduce their goods or services in market.
New product development: Morrisons should make new product in china market
according to their needs and preference as it will get automatically sell if they are satisfying the
unmet needs of the customers. High sales will generate high profit for company. According to
Kramer, (2018) Company can use latest technology to enhance their product quality and quantity
which could create competitive advantage over others.
Training and development to their employees: Training is important for any
employees to excel in their specific work. If proper skills and abilities is inculcate to the
employees then motivation level would increase which would leads to improves in overall
productivity of the company. According to the Schaltegger, Lüdeke-Freund and Hansen, (2016)
if employees are giving their best performance then it will automatically satisfy the consumer
needs thus retention rate of customer would also increase to a certain level. Latest technology
should be provided by the company as it can help the company to differentiate their product with
their competitors.
Improving brand image: Sales and profits of the company would increase gradually if
brand awareness of the company high. Company can improve their brand image in the mind of
the customers by investing in promotions, advertising, CSR activities, opting different types of
marketing strategies according to the external environment and competitor etc. Better brand
image is proportionate to better sales and profit. Other than that, Morrisons can use marketing
mix technique to place their product at the right place and at the right time to increase sales
(Cooke and Huggins, 2018).
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CHAPTER -3 RESEARCH METHODOLOGY
Appropriate research methods and conduct primary and secondary research
There are different methods of research which is used by the researcher in order to collect
accurate amount of information from the respondents. Some methods are determined as under:
Research Onion
It is referred to explain the methodology of research in which different layers are
available to represent research framework. The research onion is used from outer layer to inner
layer (Bouncken and et. al., 2016).
Research Philosophy
The philosophy taken here for this research is Pragmatist research philosophy which is
the outermost layer. The reason behind adopting the pragmatist philosophy was based on the
consequences that corporate social responsibilities cannot be seen as a fact. There is opportunity
to mix different methods in research because it provides better research result. There is also a
type of philosophy which can replace the pragmatist philosophy which is interpretive research
philosophy or positivist research philosophy (Burns, 2016). These are the major philosophies in
the context of research but it cannot be used because of not fitting in the requirement of research.
This philosophy is considered to be new and an alternative philosophy by the researchers. The
pragmatism philosophy stands in between the positivist and interpretive research philosophy.
Research Approach
It is the next approach in research in which deductive approach is taken which best fits
with pragmatist research philosophy. In this approach empirical data is taken which helps in the
observation which are required in forming views to find the research objective. Another research
approach which can be used in this research is inductive research approach. It is possible to use
inductive approach with pragmatist research philosophy. This helps in the evaluation of
observations to support the results of approach (Cooke and Huggins, 2018). As per the research
deductive approach is more suitable and essential for the researcher to gather proper data and
information from the respondents.,
Research Strategy
In research strategy case study approach is taken into consideration. In this research
strategy research is moved on to single target. This strategy helps in focusing on the case. The
organization taken in this strategy is Chevron in which the observations taken are focused on
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relating and applying organizational setting and situation (Crane and Matten, 2016). This
approach helps in focusing on the relevant issues focused on the problems related with
organization.
Research Choice:
The next layer of research is research choice. In this section, there are two types of
research choices that are qualitative and quantitative (Eriksson, Johanson and Sharma, 2015).
The qualitative research choice is based on the questionnaire which are asked from the customers
while qualitative research choice makes the research wider ins cope so that complexity can be
increase in pragmatist research philosophy. The quantitative research choice is more suitable
with pragmatist research philosophy because it provides quality in the research data with
accuracy.
Qualitative research: It is a scientific method of observation to collect non-numerical
information. It is identified as as market research method that emphasis on obtaining information
via conversational and open-ended communication (Frow and et. al., 2015). Qualitative data
provide accurate and reliable information which increases the effectiveness of conclusion drawn
by the researcher at the end of research. Therefore, it is mostly adopted by the researcher. But on
the other hand, it consumes more time, money and efforts in collecting such data. It is more
difficult to interpret collect data in meaningful and understandable manner.
Quantitative research: In this data or information produced are always quantitative, and
they are examined applying statistical and mathematical methods (Johanson and Mattsson,
2015). Quantitative data provide less accurate and reliable information but consumes less time,
efforts and funds to collect data which are qualitative in nature. It become easy for researcher to
interpret gathered information due to having information in statistical form. As per the research
topic, qualitative method of research is more suitable because it give accurate information from
the respondents.
Time Horizon:
It is the next phase in research in which a time zone is et first that in how much time ther
report will be prepared. This will help the project to complete within time. There are two types of
approach which can be used in this research report such as cross-sectional approach and
longitudinal approach (Grayson and Hodges, 2017). The longitudinal approach is not suitable for
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pragmatist research philosophy while the cross-section approach helps in focusing on current
time data which is updated within time.
Techniques and procedures and Research Instruments
This is known as the final layer in research onion which relates to techniques and
procedures that are undertaken. There are two types of research which can be utilized in this
report such as primary research and secondary research. The secondary research is based on the
books, journals and magazines through which data is collected. On the other hand, primary
research is undertaken with questionnaire which are developed with the respondents (Gurung and
Prater, 2017). The structured questionnaire is focused on the corporate social responsibility of
Chevron. The use of primary research is beneficial for this report because the questions can be
answered by the respondent with ease.
Data Sources:
The sources of data are from the above two types such as primary research and secondary
research. The secondary research incudes the books, journals, magazines, publications etc. While
the primary sources includes questionnaire which are cleared by the respondent to answer on
specific questions.
Primary data collection: For collecting accurate and appropriate amount of information,
primary data is more suitable for the respondents (Johanson and Mattsson, 2015). In this
researcher prepare a questionnaire which will support an investigator to gather accurate amount
of data.
Secondary data collection: It is another method of research which is also suitable for
collecting information from the customers. Beside this, researcher use to ready some books,
articles, publication research, magazines etc. All these ways are also support an investigator to
identify appropriate information about the topic (Kerzner and Kerzner, 2017).
Therefore, Primary method of data collection is more appropriate and suitable for the
respondents to collect information among the managers.
Research Sampling:
In research sampling the convenience sampling approach is taken into consideration. This
approach helps in finding the answers of questions based on primary research. The answers
collected through this approach are urgent and simple so that it may be possible to utilize other
sampling techniques. There are mainly two kind of data sampling techniques such as Random
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