...about the business operation of McDonald’s in India & how it applies their operation to interact with external environment. This discussed about the Porter’s five forces of models to imply the company’s strategies in details that helps to access the competitive environment in India. PESTLE analysis will give also the details about Political, Economic, Sociocultural and Technological, Environmental and Legal analysis and effects of this analysis on McDonald’s. Dunning eclectic framework provides to complete country’s advantages that helps the McDonalds to analysis India on the basis of how attractive India is in terms of market potential and investment risk.The study conducts a comprehensive study on the MacDonald which is one of the major players in the food services industry in India. The research tries to develop a case study which studies McDonalds and its business process very closely with a greater emphasis on major activities which it carries out in India. We have also discussed about market entry strategy of MacDonald in India. Usually McDonald’s follow franchising of entry mode but in India they followed the joint ventures of entry mode. They choose a busy residential area VasantVihar. Internationalization theory is also provide a prominent theory in international business regarding how firms expand overseas & it suggests that firms minimize the uncertainty associated with going abroad by adopting some kinds of internationalization strategy. Furthermore, the report...
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...political, economic, social, technology, and environmental factors. A. Political Factors The international operations of McDonald’s are highly influenced by the individual state policies enforced by each government. (2001, 705) For instance, there are certain groups in Europe and the United States that clamour for state actions pertaining to the health implications of eating fast food. (2005) They have indicated that harmful elements like cholesterol and adverse effects like obesity are attributable to consuming fast food products. On the other hand, the company is controlled by the individual policies and regulations of operations. Specific markets focus on different areas of concern such as that of health, worker protection, and environment. All these elements are seen in the government control of the licensing of the restaurants in the respective states. For instance, there is an impending legal dispute in the McDonald’s franchise in India where certain infringement of rights and violation of religious laws pertaining to the contents of the food. The existence of meat in their menus in India is apparently offensive to the Hindu religion in the said market. There are also other studies that point to the infringement of McDonald’s Stores with reference to the existing employment laws in the target market. Like any business venture, these McDonald’s stores have to contend with the issues of employment procedures as well as their tax obligations so as to succeed in the foreign...
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...Professor Roger Palmer, Head of the School of Management, Henley Business School, UK The globalization of companies is the involvement of customers, producers, suppliers, and other stakeholders in the global marketing process. Global marketing therefore reflects the trend of firms selling products and services across many countries. Drawing on an incomparable breadth of international examples, Svend Hollensen not only demonstrates how global marketing works, but also how it relates to real decisions around the world. This book offers a truly global approach with cases and exhibits from all parts of the world, including Europe, the Middle East, Africa, the Far East, North and South America. It provides a complete and concentrated overview of the total international marketing planning process, along with many new, up-to-date exhibits and cases, which illustrate the theory by showing practical applications. • Extensive coverage of hot topics such as glocalization, born globals, value creation, value net, celebrity branding, brand piracy, and viral marketing, as well as a comprehensive new section on integrated marketing communication through social networking. • Brand new case studies focus on globally recognized brands and companies operating in a number of countries, including Build-A-Bear Workshop, Hello Kitty, Ralph Lauren and Sony Music Entertainment. • Global Marketing ‘Svend Hollensen writes with real authority and insight having been...
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...process of internationalization of selected firm using a relevant framework to explain. * What is Internationalization? * As the process of increasing involvement in international operation. * Internationalization envelops all activities that a company undertakes with regards to its relations with foreign markets. * Internationalization can take many forms, such as investing in a foreign country (foreign direct investment), forming partnerships with foreign companies, subcontracting foreign experts, taking part in international networks, and many more. * Why consider going international? * To increase overall customer base * To offset seasonal fluctuations in local markets * To minimize risk of losing market share to clients who themselves use internet to find goods\ services in overseas markets * To offset increasing costs of doing business at home * To gain prestige with customers at home * Why STARBUCKS? In a globalized world where every company has the opportunity to explore the world in search of other profitable markets, there are different challenges and opportunities faced. I would like to explain this by focusing on Starbucks, one of the world’s leading coffee chains. Starbucks has come a long way from a coffee bean retailer to one of the world’s most recognized coffee houses. All throughout the years, Starbucks have expanded both domestically and internationally. In this answer, I would like to explain...
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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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...Modes of Entry into International Markets (Place) How does an organization enter an overseas market? Background A mode of entry into an international market is the channel which your organization employs to gain entry to a new international market. This lesson considers a number of key alternatives, but recognizes that alteratives are many and diverse. Here you will be consider modes of entry into international markets such as the Internet, Exporting, Licensing, International Agents, International Distributors, Strategic Alliances, Joint Ventures, Overseas Manufacture and International Sales Subsidiaries. Finally we consider the Stages of Internationalization. It is worth noting that not all authorities on international marketing agree as to which mode of entry sits where. For example, some see franchising as a stand alone mode, whilst others see franchising as part of licensing. In reality, the most important point is that you consider all useful modes of entry into international markets - over and above which pigeon-hole it fits into. If in doubt, always clarify your tutor's preferred view. The Internet The Internet is a new channel for some organizations and the sole channel for a large number of innovative new organizations. The eMarketing space consists of new Internet companies that have emerged as the Internet has developed, as well as those pre-existing companies that now employ eMarketing approaches as part of their overall marketing plan. For some companies the...
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...Strategies for Service Businesses. Author: Lovelock, Christopher H. Yip, George S. Source: California Management Review. 38(2): 64-86. 1996 Winter. Abstract A study provides a framework for developing global strategies for service businesses. It integrates existing, separate frameworks on globalization and on service businesses, analyzes how the distinctive characteristics of service businesses affect globalization and which do not. It then applies the new framework to numerous industry and company examples, with particular emphasis on the role of information technology. Full Text How do the distinctive characteristics of service businesses affect globalization and the use of global strategy? This is a crucial question for managers in numerous industries. Not only are services continuing to grow rapidly in domestic economies, but international trade in services is increasing, too. The United States, like some other developed countries, has a trade surplus in services that helps offset the deficit in merchandise trade. In contrast, Japan has been much less successful in internationalizing its service businesses.1 So it is essential to national competitiveness that governments, as well as companies, achieve a better understanding of how to develop effective global strategies for different types of service businesses. Most research to date has focused either on why and how service firms internationalize or on different modes of internationalization.2 In contrast, we examine...
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...EXPANDING ABROAD: MOTIVATIONS & MEANS INTERNATIONAL BUSINESS: It consists of transactions that are devised and carried out across national borders to satisfy the objectives of individuals, companies, and organizations The main characteristics of the international business are: - flow of ideas, services and capital across the world - new choices to consumers - acquisition of a wider variety of products is offered - the mobility of labor, capital and tech is facilitated - new challenging employment opportunities - reallocation of resources, shift of activities to a global level International business has created a network of global links that bind countries, institutions, and individuals with trade, financial markets, technology, and living standards. MULTINATIONAL ENTERPRISE (MNE): is a business –profit or non-profit – that operates in the global arena (across national borders), with no regard to the dimension of the firm The main peculiarity of an MNE is the fact that manage actively and coordinately a set of operations located in different countries. To be true MNE a company must: * have substantial, direct investment in foreign countries (not just the trading relationships of an import-export business) * and actively manage those operations as affecting their strategy and organization The MNE is a recent phenomenon, mostly developed in the post-WW II years. The United Nations has changed...
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...YUM! BRANDS, PIZZA HUT, AND KFC Teaching Note Overview This case describes the evolution of the global fast-food industry and Yum! Brands, Inc.’s development of the Pizza Hut and KFC franchises worldwide. It focuses on international business risk assessment and develops a model of country evaluation that students can use to analyze international business and market entry decisions in a variety of industries, regions, and countries. Teaching Objectives 1. Develop skills in industry analysis 2. Develop skills in global industry analysis. 3. Develop knowledge of franchising and the costs and benefits of expanding globally using franchises versus company-owned stores. 4. Develop skills in international business risk analysis. 5. Develop skills in country portfolio evaluation and assessment. Suggestions for Using the Case This case has been used successfully in undergraduate, MBA, and Executive MBA classes in strategic management, marketing management, and international business. It can be used in undergraduate courses to develop student skills in industry structure analysis, strategy analysis, and international business risk assessment. The teaching note is designed to give students practice in each of these three areas. Instructors may choose to use the case to discuss only one of these three areas during a single class period or to cover all three areas over two class periods. The case can be also...
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...International Business ( Semester 2, 2014) * Topic 1: Context * Globalization: There is no agreed or consistent definition for globalization but the key features including: * Everything and everyone equal * Intensive and rapid flows cross border flows (eg product, finance) * Not just economic but social, culture also. * Implication for nation states (countries)- a loss on power for the countries on politically as well as economically. * “ Globalization is about growing mobility across frontiers- mobility of goods and commodities, mobility of information and communications products and services, and mobility of people” ( Robins 2000). * Globalization has become a leading concept in doing business during last few decades, there are various aspects of globalization that influencing in doing business such as Competition, exchange of technology, knowledge/information transfer. * Competition: there is increase in competition. It can relate to product, service cost, price, target market, technological adaptation, quick response, quick production by companies. Company needs to focus on production with less cost to sell cheaper in order to increase its market share. On the other hand, customers also have a large multitude of choices in the markets and it affects their behavior: they want to acquire goods and services quickly and in more efficient way than before with high expectation in quality and low prices. * Exchange of...
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...chapter 10 the international context There never were, since the creation of the world, two cases exactly parallel. Philip Dormer Stanhope (1694–1773); English Secretary of State INTRODUCTION firms move out of their domestic market on to the Aswith differinglanguage, arenas.system, technologicalinternational stage, they aretofaced business The nations they expand to can vary with regard consumer behavior, legal infrastructure, business culture, educational system, labor relations, political ideology, distribution structures and fiscal regime, to name just a few. At face value, the plurality of the international context can seem daunting. Yet, the question is how important the international differences are for firms operating across borders. Do firms need to adapt to the international diversity encountered, or can they find ways of overcoming the constraints imposed by distinct national systems, structures and behaviors? This matter of understanding and dealing with international variety is one of the key topics for managers operating across borders. A second question with regard to the international context is that of international linkages – to what extent do events in one country have an impact on what happens in other countries? When a number of nations are tightly linked to one another in a particular area, this is referred to as a case of international integration. If, on the other hand, there are very weak links between developments in one country and developments...
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...Description International business activity is one of the key features of the contemporary global economy. The decision to venture abroad involves the evaluation of alternative entry modes, bearing in mind the degree of risk and the suitability of the business environment in a potential host country or region. Political, economic, cultural and other factors are all of vital importance. This short course aims to explore these issues in the light of current research and with reference to recent developments in the global economy. The course will be delivered through a combination of lectures, discussion groups, plenary discussion and case study analysis. LECTURE PROGRAMME: INTERNATIONAL ENTRY AND COUNTRY ANALYSIS 1. Motives for Going International Businesses venture abroad for a variety of reasons and there is a large international business literature on this...
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...Is culture really all that International Human Resource Manager is about? * Introduction * Diversity Management * IHRM & Culture issue * Conclusion * References Introduction People have always been the driving force of business and management. This force is a challenge and if not addressed with the right skills, it will develop into disturbing elements that are very dangerous for the management of the company. The challenges of global talent selection and mobility of labor, established by a career concept that transcends national borders and organizational groups and the emergence of virtual collaboration on international projects requires companies to develop new skills in their employees to be effective in the complexity of today's contexts. The workforces are people, and as we are human, we are all different from various points of view. This paper aims to answer the question: “Is culture really all that International Human Resource Manager is about?” I’ve analyzed the differences between HRM and IHRM based on the concept of diversity, characteristics that influence both topics but in a different way. After this, the next stop is to define IHRM and the concept of culture to reach the conclusion that managing cultural differences in an international team is the major challenge to IHRM. Due to the movement of employees between foreign subsidiaries and headquarters and between foreign locales, HRM professionals are likely to...
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...Managing the internationalization process Learning outcomes After reading this chapter, you should be able to: ➤ Understand the motives for internationalization. ➤ Apply the theories underpinning the internationalization process. ➤ Explain the Psychic Distance and Born Global concepts. 5 ➤ Advise a multinational firm on choosing an appropriate entry mode for internationalization. ➤ Advise a multinational firm on de-internationalization. 148 Global strategic development Opening case study Internationalization of a French retailer—Carrefour In 1960, Carrefour opened its first supermarket in France. In 1963, Carrefour invented a new store concept—the hypermarket. The hypermarket concept was novel, and revolutionized the way French people did their shopping. It moved daily shopping from small stores to enormous stores where customers find everything they want under one roof, in addition to selfservice, discount price, and free parking space. The first Carrefour hypermarket store was established at the intersection of five roads—hence the name, Carrefour, which means ‘crossroads’. Carrefour is the leading retailer in Europe and the second largest worldwide, with Exhibit A International development of Carrefour Year Country and mode of entry No. of stores (2009) 1969 1973 1975 1982 1989 1991 1993 1993 1994 1995 1996 1997 1997 1998 1998 2000 Belgium—Carrefour’s first hypermarket outside France Spain Brazil—Carrefour’s first hypermarket in the Americas Argentina Taiwan—Carrefour’s...
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...entry used by international firms to enter into new markets. Introduction A mode of entry into an international market is the channel which an organization employs to gain entry to a new international market. International firms use several entry modes to expand their businesses globally, and to enter into new markets, there are some basic decisions that the firm must takes before foreign expansion like: first they determine which markets to enter, when to enter those markets, and on what scale. The decision on which foreign markets to enteris based on the nation’s long run profit potential.-The international firm looks in detail at economic and political factors which influence foreign markets.-Long run benefits of doing business in a country depends on following factors:- Size of market (in terms of demographics)- The present wealth of consumer markets (purchasing power)- Nature of competition. By considering such factors firm can rank countries in terms of their attractiveness andlong-run profit. The time of entry is an important factor to be considered. Entry is early when an international business enters a foreign market before other foreign firms and late when it enters after other international businesses. The advantage is when firms enter early in the foreign market commonly known as first-mover advantages which include; it’s the ability to prevent rivals and capture demand by establishing a strong brand name; Ability to build sales volume in that country.so that they...
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