Problems encountered within international retail joint ventures: UK retailer case study evidence

Abstract

Purpose – The paper aims to investigate the problems encountered in retail international joint ventures (IJVs). It synthesizes and applies transaction cost economics and strategic management theories to help explain the dynamics within the international retail joint venture (IRJV) process. Design/methodology/approach – Applies a multiple case study approach based on a sample of UK-based retailers during the retail internationalisation process. Findings – Highlights the key problem areas encountered by retailers involved in IJV activity. Concludes that in contrast to production-driven joint venture activity, retailers appear to have a shorter and intensive adjustment period to effectively co-ordinate operational activity and bridge the corporate and behavioural differences between themselves and the partner. Research limitations/implications – Focuses on a sample of UK retail companies only. Given the intensive instantiation process, a predetermined approach may be more appropriate for retail firms to avoid problematic outcomes in IJV management. Practical implications – Retail companies may experience post formation risk in joint ventures, arising from partner resource limitations. Differences in management capability between the partners may lead to ineffective collaboration and poor operational performance. Originality/value – Addresses a previously neglected area of research and provides insights into the management of IRJV. Examines the relevance of key theoretical perspectives in relation to the problems encountered in IRJV activity.