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International Business - Franchising
Pages 4 (1004 words)
International franchises do not just happen in a vacuum. They succeed due to some factors. Franchising implies a professionally put-together concept whereby a franchisee sinks in money with the franchisor. The latter provides access to a tried-and-tested business plan to the former and helps him get established in the business.
Arnold (2003) claims franchising is an under-explored entry mode in international markets but that it has been widely used in North America and Western Europe, most notably by fast food chains, hotel or car rental services. The business format is fixed, including the operation and guidelines so that its ability to adapt is limited. The same is expressed by Toncar (2005), where franchising, he said, is dependent upon the ability to provide a marketing mix that matches expectations of consumers in different cultures.
But major players are said to be increasingly learning. McDonalds, for example, as described in MFFI (2003) is "thinking globally and acting locally," a fortunate global marketing strategy. This sensitivity for the locals is expressed in so many ways to include their not using beef in India in their food preparations, their not using lard also in food preparations in Muslim areas, their launching of China burger in Asia in recognition of China as market for them, their introduction of chicken sandwich the Arab way.
Further, management experts credit McDonalds for its maintaining the same efficiency in time to deliver, work-processes, cleanliness, changes in their menus, and ad-campaigns which are region-specific. Their use of franchising helps them set up business all over the world. ...
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