...restaurants serving 52 million people in more than 100 countries each | |day. More than 70% of McDonald's restaurants worldwide are owned and operated by independent local men and women. | |McDonald's is one of the world's most well-known and valuable brands and holds a leading share in the globally branded quick service restaurant segment of | |the informal eating-out market in virtually every country in which we do business. | | | |Serves the world some of its favorite foods - World Famous French Fries, Big Mac, Quarter Pounder, Chicken McNuggets and Egg McMuffin. | | | |[pic] [pic] [pic] | | | | | ...
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...“Ministry of Crab” (MOC) restaurant to launch overseas. Situated at Dutch hospital, a prominent tourist location in Colombo city, MOC is currently a popular restaurant in Sri Lankan food industry. Author has analysed all the strategies that are available to go international evaluating their pros and cons. Franchising is introduced as the best option to go international for MOC in this report and facts are justified with relevant examples. Next author has looked at the market attractiveness proposing the two places which MOC should approach first in developed and developing countries. Geographical and historical facts are researched and analysed to find why MOC should approach these countries first. Next author has focused on country comparative analysis and discussed barriers to entry common to international trade. Non tariff barriers are identified related to two chosen countries that is United Kingdom and Bangladesh. In the final question author has discussed the product life cycle and international product life cycle with examples. Concluding the question author has identified the importance of Product Life Cycle for MOC to go international with franchising. The report is concluded with a conclusion chapter with relevant recommendations to MOC to enter overseas market using business format franchising. Introduction 1 Company profile This is a...
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...A study on the franchising opportunities and the barriers to it in Pakistan A Proposal Submitted by: Faizan mujtaba malik TP027822 BA (hons).International Business Management In Partial fulfilment of requirements of the programme Bachelors of Arts in International Business Management Asia Pacific University of Technology and Innovation 06-11-2013 Abstract Recently countries over the world have been in a very fast economic development race with the most modern and appropriate strategies and technologies. However, franchising has been of the most successful and useful strategies that helped in the development and improvement of countries. On the other hand Pakistan is one of the developing countries that suffer from the lack of such strategies and technologies that would play the role in the economic development of the country. This report provides an overview of franchising strategy with its advantages and drawbacks. Moreover the report is about the market in Pakistan and provides a much clear image of the environmental factors and current situation in the country. The aim of research is to study the opportunities of franchising in Pakistan as well as the challenges that organizations face in the market of Pakistan specially in franchising. The research focuses on the environmental factors, political and social and cultural factors and its impact on the franchising market in Pakistan. The report also focuses on how technology and infrastructure can...
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...International franchising is often regarded as a low-risk foreign market entry strategy. Does this view fully reflect the attraction of international franchising as a market entry mode? International trade is booming and the world is shrinking rapidly due to faster communication, transportation, and financial flows. Today’s business environment is undergoing fundermental transformation as a result of globalization (Kotler & Armstrong, 2001). According to Hodgetts and Luthans (2003), “globalization is the production and distribution of products and services of a homogenous type and quality on a worldwide basis”. According to Root(1994, P.2) the new global economy has created business environment that require companies to look past the traditional thinking of the domestic market, and start looking at business from an international perspective. The main challenge of global companies is to develop managers that are capable of working across cultures and who are competent in international business (Brake, et al. 1995, p. 2). According to Elashmawi (2000), companies that want to react effectively to changes in its global marketplace, has to have a flexible and adoptable corporate culture. Want (2003) explain corporate culture as the collective belief system that people within a company has about their ability to compete in the marketplace. According to Hoffman and Preble (2004), franchising is a well working theory that helps companies adapt to different cultures and business...
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...International Marketing Management Using Business Format Franchising as a Market Entry Method McDonald’s Student Name: Nursulu Student ID: Lecturer: Dr. Lester Massingham/ Dr. Tom Abstract This report is based on the advantages and disadvantages of business format franchising and the fundamentals of market entry methods. Using McDonalds which happens to be one of the largest food service companies in the world, the author of this paper will look into the concepts of various market entry strategies in comparison to business format franchising. This report will also look into various elements that will essentially be needed to be addressed. It will critically discuss the various aspects involved in franchising as a market entry strategy and focus on how business format franchising can assessed as an expansion strategy in contrast to other modes of entry. Contents A Brief Journey into the History of McDonalds 3 1.0 An Introduction to Franchising (Facts about Franchising) 4 2.0 The Advantages and Disadvantages of Business Format Franchising 5 2.1 Marketing Franchises Vs Marketing Standalone Enterprises 7 2.2 Brand Image Transformation – Maintained Brand Equity of Franchises 8 2.2 Franchise Marketing Mix Vs Other Entry Modes 9 3.0 Market Entry Methods 10 3.1 Direct Export & Indirect Exportation 10 3.2 Licensing 11 3.3 Contracting 11 3.4 Manufacturing Abroad 11 3.5 Joint Venture 11 4.0 Conclusions & Recommendations 12 Bibliography 13 List of Figures ...
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...mid-day break and enjoys a bottle of Coca-Cola on a warm summer day. She pulls out her Macbook and quickly reviews her notes in preparation for an afternoon business meeting. Ellen is an organic dairy farm consultant for Free Range Foods, an American organic dairy farm. Ellen will attempt to persuade a consortium of business leaders that her agribusiness company is best-suited for the five year, five million dollar contract to provide organic dairy farm products to local school systems in Tokyo. This is Free Range Food’s first attempt to compete on the international landscape. Since the local school systems contract begins in one year, Free Range Food must determine if their company can compete globally while simultaneously maintaining its eco-friendly business operations. Thomas L. Friedman, in The Lexus and the Olive Tree, explains globalization as a movement that enables individuals, corporations, and countries to reach around the globe farther, faster, deeper, and cheaper than ever before. Due to more accepting international trade laws and modern advances in technology business globalization is becoming more common and some will argue a necessary component to sustaining one’s business. This script will discuss four elements Free Range Foods must consider when deciding to whether to go global: 1-analyze the pros/cons of how at least two globalization strategies might apply to their decision 2-identify the factors to be reviewed before going global 3-make a recommendation...
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...Part 2 A. Introduction Franchise is a method of marketing and distributing based on a two parties relationship; that is the franchisor (the owner and granter of right) and the franchisee (recipient of right) relationship. The right granted is for the purpose of running the business by using the trademark or trade name based on a specific system, at specified location or area within a specified period of time (Malaysian Franchise Association). Types of Franchise There are two main types of franchising; which are product distribution franchise and business format franchise (Beshel. B,2010). The product distribution franchises just simply sell the franchisor’s products and are supplier-dealer relationships. Under this type of franchising, the franchisor licenses its trademark and logo to the franchisees but the entire system for running their business is not provided by franchisor. There are some popular industries which lying under products distribution franchises; they are drink distributors, automobile dealers and gas stations. Pepsi, Shell, Toyota are some examples in this category. Product distribution franchise issues tend to be found in the vertical restraint literature. They typically focus on issues of exclusive dealing, inventory controls and the problem of double marginalization. Double marginalization (Kevin. J.W. 2007) refers to the problem of both a wholesaler and retailer using a price markup formula. The wholesaler sells his good to a retailer at the wholesaler’s...
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...McDonald’s Franchising McDonald's was first started in 1940 by two brothers named Mac and Dick McDonald in California. As of 2008, it continues to be a worldwide hit in more than 119 different countries and 30,000 different restaurants (McDonald’s.com, 2008). International franchising is a special form of licensing which allows a firm in another country to be given the rights by the firm in the original country (Griffin, Pustay, 2013). It allows the firm to be able to use the same operating systems, logos, trademarks, and brand names in exchange for a royalty payment (Griffin, Pustay, 2013). In this essay I will be talking about McDonald's, which franchises its restaurants all around the globe. McDonald's as a company considers itself to be a brand franchisor. If someone wishes to buy or purchase a restaurant, they brand the goods to the individual and the store (McDonald’s.com, 2008). McDonald's owns the right to own or lease any site and restaurant building to anyone who can afford it. The franchisee that purchases the rights has it for 20 years from McDonald's. They are also responsible for all the equipment and store fittings (McDonald's.com, 2008). The franchisee must comply with the standards that McDonald's has. That means the layout; brand, menus, design and administration of that restaurant must all fall within the standards. Each McDonald's must have the same type of menus and operating systems through its licensing agreement (McDonald’s.com, 2008). Now each menu...
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...1. 2. Franchising is the practice of the right to use a firm's business model and brand for a prescribed period of time. The word "franchise" is of Anglo-French derivation—from franc, meaning free and is used both as a noun and as a (transitive) verb. For the franchiser, the franchise is an alternative to building "chain stores" to distribute goods that avoids the investments and liability of a chain. The franchisor's success depends on the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business. A franchise makes it possible for people who have never been in business before to run one successfully,” says Professor Lorelle Frazer, director of the Asia-Pacific Centre for Franchising Excellence at Griffith University. A major benefit of being part of a franchise is support. “When we compared independent and franchised businesses during the economic downturn we found that support made a difference to business survival,” says Frazer. “Group peer learning in properly facilitated education environments is one of the most powerful tools for franchise growth and profitability,” says Tony Arena, managing director of BCI Business Brokers. However the benefits of a franchise come at a price; some people choose an independent business for the simple reason that it can cost less to start up. But start an independent business and you’re effectively taking a gamble that there...
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...An Introduction to Franchising Franchising * Franchising is a form of business organization in which a firm that already has a SUCCESSFUL product or service (FRANCHISOR) licenses its trademark and method of doing business to another business or individual (FRANCHISEE), in exchange for a franchise fee and ongoing royalty payment * International Franchise Association (IFA): “A franchise operation is a contractual relationship between the franchisor and franchisee in which the franchisor offers or is obliged to maintain a continuing interest in the business of the franchisee in such areas as know-how and training; wherein the franchisee operates under a common trade name, format and/or procedure owned or controlled by the franchisor, and in which the franchisee has or will make a substantial capital investment in his business from his own resources.” * Franchising is MORE than just distributorship because it extends to an ENTIRE operation or method of dong business, involves greater assistance, control and longer duration, whereas the distributor merely re-sells products to retailers or customers Growth of Franchising The word “franchise” comes from an old dialect of French and means privilege or freedom Singer Sewing Machine - first franchise (mid 19th century) Automobile - Ford, Petroleum Products - Shell, Softdrinks - Coca Cola, Food & Restaurants - McDonalds & Starbucks Home markets became saturated, resulting in attractive opportunities overseas...
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...MASON** Abstract. There is a tension in business format franchising between, on the one hand, standardisation and uniformity and, on the other hand, geographical variations in market conditions and resource availability. Previous research has demonstrated in the case of independent small firms that local geographical conditions influence business strategy. This paper examines whether variations in the local geographical environment, notably in terms of demand and supply side conditions, affect format implementation and whether franchisors permit franchisees to make local adaptations of the format in response to local environmental conditions. The study is based on interviews with 40 UK-based franchisors, all of whom were at the later stages of roll-out or in the consolidation stage of network development. Local variations in the business environment do create a conflict with the need to maintain the uniformity of the franchise format. Adaptation was restricted to peripheral format components. No changes were made to the core format components. Most franchisors recognise that their franchisees are an important source of new innovation. However, implementation of franchisee ideas across the system is found in only a minority of cases. Key words: franchising, geography, adaptation, standardisation Please direct correspondence about this paper to Colin Mason 1. Introduction Business format franchising operates on the principle of ‘cloning’ a standardised tried...
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... selling pizzas of such high quality was not common. At the same time, this is not easily imitable by companies because focusing on higher quality will need a major shift from their current procedures and marketing strategies. Furthermore, Papa Johns has been extremely organized in exploiting this competence to its benefit. Hence, as this competence fulfills all the criteria of the VRIO framework, it is both a core and a distinctive competence. Operating System Papa Johns’ efficient operating system is also considered to be one of the competences as it provides value to the company by reducing restaurant operating costs, improving the food quality and promoting superior customer service. The most significant aspect of its operating system is its commissary system or its domestic QC Center system which benefits from bulk purchasing of food and supplies, and also provides efficiencies of scale in the production of fresh dough. This kind of a...
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...feature in this kind of environment to understand and identify the on-going advances, issues and trends in the hospitality industry. There are a number of academic journals that can list few themes to review in the hospitality sector. some of the issues have been addressed in this annual review of WHATT (IJCHM, Vol. 7 No. 7, 1996 and Vol. 8 No. 7, 1996), and other themes below are seen as new themes, which are research, strategy and organization policy; current perspectives in human resources management; new concepts in management and organization; information technology support; finance and investment. The three main trends that I would like to address are - human resources management, empowerment - management and organization , franchising - information technology, hotel computer systems Human Resources Management- Empowerment “Empowerment has been described as a venue to enable employees make decisions (Bowen & Lawler, 1992) and as a personal experience where individuals take responsibility for their own actions (Pastor, 1996)”. There has not been enough study on empowerment in the hospitality sector and in today’s competitive world any service industry to survive and grow, empowered human resources are vital and the core requirement of any organization including the hospitality sector. Recruiting talented manpower is the key to any employee related functions, empowered human resources adds individuals or teams who are knowledgeable, work in teams or...
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...................................................................................................................... 8 2.2 Identity or Branding .................................................................................................................................... 8 2.3 Expansion or Growth ................................................................................................................................... 8 3.0 Setting Up The Business ............................................................................................................. 9 4.0 Market Entry .............................................................................................................................. 9 5.0 Opportunity or Franchising ..................................................................................................... 11 6.0 Changes In Business Enviroment...
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...Plaisir Case Synopsis McDonald’s as we know is the biggest multinational-corporation in fast-food industry. McDonald’s is a symbol of American power and hegemony just like Coca Cola and Nike which its operations is all around the world. And how McDonald’s could successfully entering global markets ? the key components is its standardization in all McDonald’s outlets in the world known as QSC&V (Quality, Service, Cleanliness, Value). You can see and feel the same burger quality, same fast service, cleanliness of restroom and the same price in all McDonald’s outlets in every country. McDonald’s also made a strong relationship with supplier because this is another key success, every supplier which supply all McDonald’s products have to comply with McDonald’s standard or specification. McDonald’s also give reward for every supplier that achieve its specification process. And the most important thing that made McDonald’s globally success in entering every country is Plan to Win Strategy, this strategy actually bring McDonald’s products to become more relevant to local and regional preferences. In France, McDonald’s referred as McDo and every products in France is environmental friendly and based on local resources. Menu also different, its have P’tit Plaisir (mini snack foods), Little Mozza (tomato and mozzarella salad), Croques Monsieurs (Grilled Ham and Cheese) etc. In the US McDonald’s is food to go orders but in France is dine in because people in France usually like to dine in and...
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