Tesco's Joint Venture Strategy in India: A Case Study Analysis

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JOINT VENTURE AS AN ENTRY STRATEGY: A CASE STUDY OF TESCO
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JOINT VENTURE AS AN ENTRY STRATEGY: A CASE STUDY OF TESCO
Table of Contents
Background of the Research............................................................................................................3
Research Question...........................................................................................................................3
Research Aim...................................................................................................................................3
Research Objectives.........................................................................................................................3
Literature Review............................................................................................................................4
Entry strategies used by the global organizations........................................................................4
Impact of joint venture for a global organization........................................................................5
Importance of India as emerging market for retail business........................................................6
Methodology....................................................................................................................................6
Sampling..........................................................................................................................................8
Data Collection and Analysis..........................................................................................................8
Action Plan......................................................................................................................................8
References......................................................................................................................................10
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JOINT VENTURE AS AN ENTRY STRATEGY: A CASE STUDY OF TESCO
Background of the Research
In the modern era of globalisation, many different organisations have been able to successfully
spread themselves in a foreign market that has helped in their growth in terms of market
exposure and customer base as well as in sales, revenue generation, and profitability. However,
in order to enter a foreign market, a global organisation is required to use an effective entry
strategy. Tesco is a UK based retail organisation, which deals with groceries and retail products
and is one of the largest retail organisations in the world. Tesco has been able to establish in
different countries through effective entry strategy, which allowed them to gain success as well
as growth and increase in sales, customer base, revenue generation, and profitability.
Research Question
What is the effectiveness of using joint venture as an entry strategy for Tesco to enter the Indian
market? What are the factors responsible for an emerging foreign market to attract global
organisations? Furthermore, what is the impact of using joint venture for a global retail
organisation in an emerging foreign market?
Research Aim
The research aim for this study is to evaluate the use of a joint venture as an entry strategy of
Tesco to enter the Indian market.
Research Objectives
 To evaluate the effectiveness of using joint venture as a mode of entry for Tesco in Indian
Market
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JOINT VENTURE AS AN ENTRY STRATEGY: A CASE STUDY OF TESCO
 To understand the factors responsible for the Indian market to attract a global
organisation like Tesco
 To evaluate the impact of using joint venture for Tesco in the Indian market
Literature Review
Entry strategies used by the global organizations
Most of the global organizations use different strategies for entering into a new market. It can
also be stated that the global organizations examine and evaluate the potential market in the new
country and decide their entry strategies according to the evaluation. Strategies such as direct
exporting, acquisition of a new company, joint venture, collaborating, licensing and franchising
are the most common form of the market entry strategies used by the global organizations as
stated by Wood et al. (2017). The company can belong to the different sector, such as retail,
automobile, fashion or any other sector.
Direct exporting: One of the most common ways to enter a new market is the direct exporting.
In the initial period of the business venture, the organizations start to develop their sales channels
using their initial resources. Later, they can develop their distributorship or agency in that
concerned market.
Acquisition of a new company: In many cases, it can be seen that a company has been enter the
business by acquiring a new company in the market, where they are going to develop their
business, as opined by as stated by Sundström and Radon, (2015). The newly bought company
can be the direct competitor or has a large market share. It is also possible that it can be the only
option to enter the new market.
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JOINT VENTURE AS AN ENTRY STRATEGY: A CASE STUDY OF TESCO
Joint venture: One of the mostly used market entry strategy is forming the joint venture. For
developing an independent third company, it is the perfect strategy. On the other hand, it is also
beneficial as the risks and profits, both are equally shared among the partners.
Apart from the above-mentioned strategies, other strategies such as collaborating, licensing and
franchising can also be used.
Impact of joint venture for a global organization
A number of positive and negative impacts of the joint venture can be seen in case of the global
organizations that use this method for entering into a new market.
 One of the major benefits of using the joint venture is that it helped to develop and grow
the new business faster than any other market entry strategy
 The cost and liability or risks of the business can be shared between the two partners and
thus none of them have to bear the burden
 The capacity of the organization can be developed
 Greater resources such as staffs, finance and technological help can be developed from
this strategy
However, some negative factors can also be developed from it
 The partners may have their different objectives towards the business
 Cultural conflicts and the problems regarding the management of the employees can be
developed in the business
 Lack of expertise, skills and investments can be seen among the partners which may lead
to the conflicts in the business
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JOINT VENTURE AS AN ENTRY STRATEGY: A CASE STUDY OF TESCO
Importance of India as emerging market for retail business
India is considered as one of the important emerging market for the retail business in the recent
time. It is expected that the excellent growth of the retail business has made it to reach about
US$ 3,600 billion by 2020 from US$ 1,824 billion in 2017, as stated by Batsakis and Mohr,
(2017). On the other hand, the technological development of the country has made it acquire an
important place in the global retail business map. The changing lifestyle of the middle-income
group of people is another factor that helped into the growth of the retail business in the country.
Moreover, it is also seen that about 10% of the gross domestic products and the 8% of the total
employment has been covered by the retail business (Swoboda et al. 2015).
Thus, it can be stated that being an emerging market economy, the Indian market have great
potential for developing the retail business.
Methodology
Research Philosophy
Research philosophy is used in a research study in order to explain and evaluate the process
through which details related to the research topic can be gathered or acquired. For any research
study, the research philosophy includes positivism, interpretivism, and realism (Sekaran and
Bougie, 2016). For this current study, use of positivism would be applicable. This is because
positivism would help to analyse all the facts and data in a logical manner.
Research Approach
Research approach is used in a research study in order to create the format through which the
research study can be effectively conducted. For any research study, the research approach
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JOINT VENTURE AS AN ENTRY STRATEGY: A CASE STUDY OF TESCO
includes inductive approach and deductive approach (Marshall, Coleman, and Reason, 2017).
For this current study, the use of deductive approach would be applicable. This is because the
deductive approach would help to create a research study with a dense amount of information
and concepts related to the research topic that can be used to depict the practical application of
the theories and models.
Data Collection
The data collection process used in a research study is helpful for gaining an in-depth insight into
the research topic through the acquisition of credible data and information (Quinlan et al., 2019).
For this current study, the use of both primary and secondary data would be used. The main
sources of secondary data would be books, journals, articles, and many such similar sources. The
main sources of the primary data would include both quantitative and qualitative analysis. The
quantitative data would be collected from employees of Tesco where the qualitative data would
be collected from the managers of Tesco.
Data Analysis Technique
For the quantitative data analysis, internet administered surveys would be provided to the
employees of Tesco. For the qualitative data analysis, semi-structured interviews would be
conducted with the managers of Tesco. Both of these data sources would be able to provide
primary data for the research study and this would help to contribute to the understanding of the
research topic.
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JOINT VENTURE AS AN ENTRY STRATEGY: A CASE STUDY OF TESCO
Sampling
Sampling method is done to collect the population for the primary data collection process.
Random probability method of sampling is done to collect random people as participants for the
research study. On the other hand, a non-random non-probability method of sampling is done to
collect specific people for specific research data collection (Cooper, 2015). For the quantitative
data collection process, the use of random probability sampling method would be done to select
50 employees of Tesco so that random unbiased data can be collected from the surveys. For the
qualitative data collection process, the use of non-random non-probability sampling method
would be done to gather 3 managers of Tesco for unbiased data collection from the semi-
structured interviews.
Data Collection and Analysis
The data collected would be from both secondary and primary sources. While the secondary
sources such as books, journals, and articles are analysed easily, the primary sources of data,
which would be collected from both quantitative, and qualitative analysis would be analysed in
different manners. Quantitative data gathered from surveys from the employees would be
analysed using graphs, charts, and excel sheets. Qualitative data gathered from semi-structured
interviews with the managers would be analyzed through case analysis.
Action Plan
The research study would commence using the resources and preparation and it is estimated that
the research would take an approximate of six weeks.
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JOINT VENTURE AS AN ENTRY STRATEGY: A CASE STUDY OF TESCO
Main activities/ stages Week 1 Week 2 Week 3 Week 4 Week 5 Week 6
Selection of Research Topic 
Collection of Data from Secondary Sources  
Developing Layout of Research 
Literature Review   
Development of Research Plan  
Selection of the correct Research Techniques  
Collection of Primary Data  
Data Collection Analysis and Evaluation  
Data Findings and Discussion 
Research Study Conclusion 
Creation of Research Draft 
Final Research Work Submission 
Table 1: Gantt Chart
(Source: Created by Learner)
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JOINT VENTURE AS AN ENTRY STRATEGY: A CASE STUDY OF TESCO
References
Batsakis, G. and Mohr, A.T., 2017. Revisiting the relationship between product diversification
and internationalization process in the context of emerging market MNEs. Journal of World
Business, 52(4), pp.564-577.
Cooper, H., 2015. Research synthesis and meta-analysis: A step-by-step approach (Vol. 2). Sage
publications.
Marshall, J., Coleman, G. and Reason, P., 2017. Leadership for sustainability: An action
research approach. Routledge.
Quinlan, C., Babin, B., Carr, J. and Griffin, M., 2019. Business research methods. South Western
Cengage.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.
Sundström, M. and Radon, A., 2015. Utilizing the concept of convenience as a business
opportunity in emerging markets. Organizations and Markets in Emerging Economies, 6(2),
pp.7-21.
Swoboda, B., Elsner, S. and Olejnik, E., 2015. How do past mode choices influence subsequent
entry? A study on the boundary conditions of preferred entry modes of retail firms. International
Business Review, 24(3), pp.506-517.
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JOINT VENTURE AS AN ENTRY STRATEGY: A CASE STUDY OF TESCO
Wood, S., Wrigley, N. and Coe, N.M., 2016. Capital discipline and financial market relations in
retail globalization: insights from the case of Tesco plc. Journal of Economic Geography, 17(1),
pp.31-57.
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