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Franchise Business in China
Franchising is one of the entry methods used by multinationals and foreign businesses to venture into new markets. A Multinational that is trying to enter the Chinese market will experience several pros and cons of the market. Factors in favor of franchising for any MNC are such that the market is favorable for franchises as many thrive in a ready market. Secondly, the market is not only ready but is a large target market. Thirdly, the Chinese have the investments needed to buy a franchise. Fourthly, the market has the necessary laws that support the establishment of franchises by foreign companies receiving importation and exportation licenses. However, there are numerous factors unfavorable for franchising. The major problem an MNC will face is the challenges linked to the quality control systems and laws in the nation. This is an auxiliary complication from China's ambiguity in franchising in a regulatory...
Moreover, an MNC's franchising process will be hampered by weak enforcement laws on intellectual property that may lead to copyright issues and cheap imitations.
Q2:
The Yum's case depicts the advantage of operating its own stores instead of franchising in China is that it will have a more power to control the quality of its products as opposed to franchising. This advantage is associated to weak intellectual property protection laws and a weak legal framework. The other advantage is that Yum will actively participate in the rapidly growing market giving its products a competitive advantage over its competitors. This will also increase its customer base, as it will open more company controlled stores as it has the capital required to support the initial operational functions of stores. However, franchising poses the risk of reduction in the…
Franchising of Hotels: Advantages vs. Disadvantages The objective of this study is to examine the advantages and disadvantages of franchising hotel operations. Toward this end, this study will conduct an extensive review of literature in this area of inquiry as well as interview two individuals, Mr. X, and Mr. Y in order to determine whether there are more advantages or disadvantages. Mr. X is the General Manager of a well-known hotel in
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Right Food Company This report is based on the study carried out on The Right Food Company, based in Australia. The paper studies and analyses the company's entry strategy into Guangzhou, China. I have prepared this report as part of the company's expansion plan into the Chinese market. Company Profile The Right Food Company Industry Packed Food Private Founded New South Wales Headquarters Murwillumbah (NSW) Founder Anni Brownjohn Areas served countries Manufacturing Tweed Valley (NSW) Products Maxinne Lynch (Accounts) Organic, low allergy food developer and manufacturer Key people Eleni Nott (Brand
Another strategy companies often rely on are franchising their operations to attain economies of scale and global growth at the same time (Altinay, 2007). Franchising however has significant risk as it requires a high degree of branding consistency and brand enforcement over time (Altinay, 2007). Any expansion strategy has a direct implication on a company's value chain. A merger, acquisition, alliance or joint venture can completely re-define the value chain
McDonalds In the last 30 years, developing markets have shown the potential for fast food restaurants to realize increasing profit margins. This is because markets such as China provide them with the capacity to offer unique products and experiences to customers. However, specific concepts must be integrated with each other to effectively connect with them. In the case of McDonalds, they are facing considerable challenges and opportunities in China. (Allon, 2012)
International Business Report: Ultra High-Temperature Pasteurization (UHT) Milk for Chinese Children Aged 3 to 11 Years Executive Summary A number of important trends have converged in recent years that have significant implications for companies competing in the dairy industry that seek to expand their commercial operations into China. The world’s most populous country, China has an enormous population of infants which translates into a major demand for milk products (Cui, 2016). Moreover,