Risks and Benefits of Joint Ventures for International Market Entry

This report investigates the risks and benefits of joint ventures as a strategy for entering international markets, with a focus on the Tesco-China joint venture. It begins with an introduction outlining the research topic, background, aims, objectives, and research questions. A comprehensive literature review explores the advantages and disadvantages of joint ventures, examining aspects such as access to resources, cost-sharing, flexibility, and potential for market expansion. The methodology section details the data collection, analysis, sampling methods, and ethical considerations, including the use of surveys. The results chapter presents findings from the research, supported by tables and charts illustrating key data points related to the benefits and risks of joint ventures. The report concludes with recommendations for organizations considering joint ventures, focusing on partner selection, agreement terms, and intellectual property protection. Finally, the report includes reflections and a list of references to support the findings.

Running Head: MANAGEMENT
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Table of Contents
CHAPTER 1:Introduction..........................................................................................................2
Research topic........................................................................................................................2
Research background..............................................................................................................2
Research aim and objectives..................................................................................................3
Research questions.................................................................................................................3
Project scope...........................................................................................................................3
CHAPTER 2 Literature review..................................................................................................4
Advantages of a Joint Venture...............................................................................................4
Disadvantages of a Joint Venture...........................................................................................5
Strategies used by organization for improving the joint venture...........................................7
CHAPTER 3 Methodology........................................................................................................8
Data collection method...........................................................................................................8
Data analysis method..............................................................................................................8
Sampling method....................................................................................................................9
Ethical consideration..............................................................................................................9
Survey through questionnaire...............................................................................................10
CHAPTER 4 Results.............................................................................................................13
CHAPTER 5: Conclusions and Recommendations.................................................................25
Partner’s Features.................................................................................................................25
Partner’s Background...........................................................................................................26
Clear Agreement Terms.......................................................................................................26
Intellectual Property Protection............................................................................................26
CHAPTER 6 Reflections......................................................................................................27
References................................................................................................................................29
Table 1: Gender...................................................................................................................................14
Table 2: Age........................................................................................................................................14
Table 3: Experience.............................................................................................................................15
Table 4: Starting the joint venture facilitates the chances for increasing the new expertise as well as,
insights................................................................................................................................................16
Table 5: Joint venture is only a temporary deal between the company and another.............................17
Table 6: companies can separate the business from the rest of the company and then sell it to other
parent corporation................................................................................................................................18
Table 7: International joint venture may eradicate the risk of discrimination......................................19
Table 8: Joint venture could be disadvantageous for the company in terms of limited outside
opportunities........................................................................................................................................20
Table 9: the success of the joint venture highly relies on thorough investigation and assessment of
objectives.............................................................................................................................................21
Table 10: Company may be tempted for leaving the joint venture. The company would get enough for
leadership and supporting in early phases of the joint venture and may be tempted for leaving..........22
Table 11: Which one following is practiced to improve joint venture practices in the international
market?................................................................................................................................................23
Chart 1: Gender...................................................................................................................................15
Chart 2: Age........................................................................................................................................16
Chart 3: Experience.............................................................................................................................16
Chart 4: Starting the joint venture facilitates the chances for increasing the new expertise as well as,
insights................................................................................................................................................18

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Chart 5: a joint venture is only a temporary deal between the company and another..........................18
Chart 6: companies can separate the business from the rest of the company and then sell it to other
parent corporation................................................................................................................................19
Chart 7: international joint venture may eradicate the risk of discrimination......................................20
Chart 8: joint venture could be disadvantageous for the company in terms of limited outside
opportunities........................................................................................................................................21
Chart 9: the success of the joint venture highly relies on thorough investigation and assessment of
objectives.............................................................................................................................................22
Chart 10: Company may be tempted for leaving the joint venture. The company would get enough for
leadership and supporting in early phases of the joint venture and may be tempted for leaving..........24
Chart 11: Which one following is practiced to improve joint venture practices in the international
market..................................................................................................................................................25

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CHAPTER 1: Introduction
Research topic
The risks and benefits of a joint business venture to enter international markets Joint venture
of Tesco in China.
Research background
A joint venture is a strategy that allows to the firms for developing an association to integrate
their capabilities and resources. The main purpose of this study is to develop tougher
competitive position. The company can decline the unfavourable impact of competitive rivals
through developing higher barriers for penetrating via amalgamating the financial capitals,
production, distribution networks, and research and development (Johanson and Mattsson,
2015).
The joint venture is beneficial for gaining the profitability of an industry by declining the
rivalry into the market in which both companies are exist. The global companies penetrate
their business into the global market is through the joint venture with the regional companies
followed through the acquisition. The superstore chain group Auchan developed the joint
venture Sun Art RetailGrop with the Taiwan Conglomerate Ruentex for developing the
largest hypermarket chain to China. In addition, global competitors such as Carrefour and
Wal-Mart Stores, Tesco, and Germany’s Metrohad is making slow down in their plan and
developing an alliance with each another corporation and that is the key strength of venture
(Wilson and Wilson, 2017).
Auchan has recently re-structured its stake into a joint venture with Ruentex, important for
acquisition about mainstream stick in Sun Art Retail Group. Furthermore, General Electric
and Microsoft have developed the Caradim were, the joint venture was intended to sustain
in the health industry by using online medical records for enhancing the health services.

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Furthermore, the joint venture is tending for having the reasonably higher failure rate but,
they enjoy several benefits from it (Meuleman, et al., 2017).
Research aim and objectives
The primary purpose of study is to evaluate risks and benefits of the joint venture to enter
into the international markets: in the context of Tesco, China. The following objectives will
be accomplished by the researcher to meet their objectives:
 To comprehend benefits of a joint venture in the international market
 To examine risk of a joint venture in the international market
 To recommended different strategies used by the organization to effectively
implement the joint venture into international market
Research questions
 What are the benefits of a joint venture in the international market
 What are the risks of a joint venture in the international market
 Which strategies used by the organization to effectively implement the joint venture
into the international market
Project scope
This research has a wider scope for an academician to understand the benefits of joint
ventures in international business. It has also a wider scope for practitioners to comprehend
the limitations of implementing the joint venture into international business. This research
has a wider scope for readers to increase the knowledge regarding the joint venture into
international business. This project has a higher scope for international business to apply the
strategies for implementing the joint venture into international business.

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CHAPTER 2 Literature review
Advantages of a Joint Venture
According to Monios and Bergqvist (2015) starting the joint venture facilitates the chances
for increasing the new expertise as well as, insights. It should also think that the market is
easier for international business in terms of the short-term partnership. Moreover, developing
joint venture would provide access to better resources like proficient employees and
technology. Furthermore, all capital and equipment’s are required in the implementation of
the joint venture.
In contrast to this, Buckley (2016) evaluated that joint venture is provisional deal between the
business with other firm. Company will not be committed to it at longer-term. In a joint
venture, both organization could share costs as well as risks. Furthermore, joint group project
is failed then the company is not alone if affording cost of their failure. Since both partners
had offered for sharing the expenses hence, both would support the losses. The joint venture
could be flexible and it could have limited lifecycle as well as cover the only portion
regarding what a company does, hence limiting the commitment and exposure of the
business.
As per the opinion of Larimo, Le Nguyen, and Ali (2016), there are different ways of exiting
from the joint venture. In timeline of alliance as well as a divestiture, joint venture provides
the creative manner for corporations to escape the non-core business. The company can
understand about themselves and would be competent for selling it. Gradually, companies
could separate the commercial from rest of company for sold their products to other parent
corporation. There are about 80% of all joint ventures end in the sale from the companion to
another.
In contrast to this, Buckley, et al. (2016) evaluated that a company is more likely to thrive.
The success chances would be higher as company is already riding with famous brand.

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Consequently, credibility would vastly enhance international business. Through the joint
venture, the company can develop a relationship and network. Moreover, the partnership is
only in the particular purpose, then this move would make competent in developing the long-
lasting the commercial associations.
On the other side, Hoope (2016) evaluated that the potential of the company would virtually
unlimited. Further, it is founded that the company could develop more momentum as well as,
creates a partnership. It could be advantageous for international business. The company can
save money by sharing the advertising as well as, marketing expenses. It works for different
kinds of expenses. Along with this, starting a joint venture is a significant manner for saving
money and split expenses.
According to López-Duarte et al., (2016) world-wide joint venture may eradicat risk
discrimination. It is a higher chance for cooperating with an individual from different nations
and integrates the strengths.
Disadvantages of a Joint Venture
According to Jacobides, et al. (2018) the objective of the joint venture cannot be 100% clear
as well as, rarely interacted with all engaged individuals. Another disadvantage of the joint
venture is that flexibility can be limited. Furthermore, members have rely on joint venture
and their individual businesses experience in procedure. Furthermore, in a joint venture,
equal pay might be likely however it is extremely unlikely for corporations performing for
sharing same participation as well as, accountabilities. For example, firm A is performing on
production procedure while company B is accountable for production, as well firm C is in
custody of planning as well as executing the market approaches. However, firm A is not
straight entailed in the promotion and production procedure, pressure is latter firms. It would
influence individual companies.

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On the other hand, Lee, Paik, and Uygur (2016) stated that a joint venture is created the great
imbalance. Since a different corporation is performing together, there is higher imbalance
regarding expertise, investment, and assets. It could have an unfavourable effect on the
significance of joint venture. Furthermore, clashes of cultures as well management styles
could outcome in underprivileged organization as well as, integration. People who have
dissimilar tastes, beliefs, and favourites can obtain in way big time when left unimpeded.
According to Razzaq et al. (2018) joint venture could be unfavourable for business with
respect to limited outside chances. The company should comprehend what it is getting into
joint venture and can restrict the practices of whole commercial. It is required for joint
venture contracts in terms of restricting the outside practices of respondent corporations when
dealing on venture scheme. The company should assure to comprehend regarding what it is
receiving if it does not wish for unfavorably effect on the entire business.
On the other side, Huda et al. (2019) evaluated that a lot of investigation and planning is
required. The achievement of the joint venture could relied on investigation as well as
assessment of organizational objectives. It could be harder for the company to exit business
as there is agreement entailed. It is significant that the company understands what it is getting
into when it does not wish to be locked into partnership.
According to Thompson et al. (2015) company may be tempted for leaving the joint venture.
The company would get sufficient for leadership as well as supporting in initial phases of the
joint venture and may be desirous for leaving. As a joint venture entails different corporations
from several horizons with several goals but sometimes there is lack od efefctive
communication bewttn the organizations that are aprt of it. It could affted to the overall
performance of the research outcome.
On the other side, Gundes and Aydogan (2016) evaluated that unreliable partner could be
disadvantageous for the joint venture. Due to separate nature regarding the joint venture, it is

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a prospect that associates did not dedicate 100% of its attention to project as well as, become
unreliable. Unclear and unrealistic objectives could be developed. For eliminating this, it is
required that the company and their partners do higher research before initiating with the joint
venture.
Strategies used by the organization for improving the joint venture
Yan and Luo, (2016) suggested that an organization should need to evaluate the background
of partner due to effectively performing the study. The depth knowledge about background
could enable both organizations to make a favourable decision in favour of the organization.
It is also stated that the organization should also evaluate the intellectual property of the
organization for making higher competitive benefits. The organization should also evaluate
that the venture should not be hampered to the intellectual property.

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CHAPTER 3 Methodology
A research methodology aids the researcher to select research methods for obtaining the data
about study matter. A study can consider various tools such as information gathering
methods, data evaluation tools, sampling tools, as well as ethical consideration.
Data collection method
Data gathering procedure is the technique which aids to the get the data from different
sources and method research purpose named as secondary as well as primary gathering tool.
The information gathering process is the way by which the researcher could be able to find
out a way by which information has been collected and meet research purpose (Hwang, Zhao,
and Chin, 2017). This study has been considered the primary data and secondary data
gathering technique to perform the study in an efficient manner. The primary information is
gathered by entailing survey through questionnaire method. This method enables investigator
to directly contact with the research participants to comprehend what they think and get
experience towards risks as well benefits of joint venture to enter Tesco in the China market.
It is illustrated that secondary information collection technique could also be vital to getting
information by entailing articles, books, and academic data sources (Zhang, et al., 2016).
Data analysis method
The collected information of study is evaluated by entailing different sources of data analysis
tools named as statistical data analysis as well as literature review method. From the
statistical analysis technique, the researcher would be able to deeply evaluating the factual
information that is collected by research participants towards the research issue. The
evaluated data is presenting by different charts, graphs, and tables. The data will be supported
by literature review tool that is vital for collecting a meaningful conclusion with the favor of
the research (Hitt, Li, and Xu, 2016).
Sampling method

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Sampling tool could permit to discover the method that would lead to getting the information
about research matter. In the study, many methods have been considered by the investigator
named as probability and non-probability sampling technique (Buckley and Ghauri, 2015).
This tool could allow the researcher to effectively conducting research activities and meet the
research aim. The researcher would be able to get the information towards the study issue
(Dunning, 2015). This study has considered the probability sampling tool with simple random
sampling tool. This tool will aid to randomly select the people for comprehending their
opinion and views for study to meet research purpose. This tool is vital for meeting the
organizational task. Furthermore, the probability sampling tool could permit the researcher to
get deeply evaluate the research issue. This study was performed on 50 worforces of Tesco to
enter the international market. It would facilitate to meet the organizational task.
Ethical consideration
Ethical consideration can enables to perform suitable behaviour with research candidates
towards study matter. Ethical consideration enable to perform well in working place. The
investigator and confront by certain issues of ethics named as plagiarism, language, data
manipulation, and reference (Deresky, 2017). The researcher has given in-text citation in
each paragraph for avoiding the ethical issue and give value to the actual author. The
researcher would also avoid data manipulation due to the decline of the ethical process from
the research process (Sadgrove, 2016). The researcher should use ethical norms by which the
researcher would be capable to secure the private info of members. It would facilitate to get
the depth information the depth data about the research dilemma. The ethics would also
enable the investigator to make an effective relationship with the research candidates and
perform study effectively (Sadgrove, 2016).
Survey through questionnaire
Please tick mark on your gender

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A. Male
B. Female
Please specify your age
A. Under 22
B. 23 to 26 years
C. 27-31 years
D. More than 32
Please specify your experience
A. Less than 1 years
B. 2 years to 5 years
C. 6 to 9 years
D. More than 9 years
Objectives
To comprehend the advantages of the joint venture
In your opinion, starting the joint venture facilitates the chances for increasing the new
expertise as well as, insights?
A. Strongly agree
B. Agree
C. Neutral
D. Disagree
E. Strongly disagree
Do you think that that joint venture is only a temporary deal between the company and
another?
A. Yes
B. No