International Business - Franchising Essay Example | Topics and Well Written Essays - 1000 words

worldwide Business - Franchising - Essay ExampleArnold (2003) claims franchising is an under-explored entry mode in international merchandises 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 utter, is dependent upon the ability to provide a market mix that matches expectations of consumers in different cultures.But major players argon said to be more and more 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 cattle in India in their food preparations, their not using lard also in food preparations in Muslim areas, their launching of China burg er in Asia in recognition of China as market for them, their psychiatric hospital 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. One thing that could be ascribe to McDonaldss success is their location, location, location strategy which their executives know too well (ibid.). Consider this - A friend of mine was in a seminar recently where one of the McDonalds executives was speaking. He asked the audience what kind of business they were in. Half the push laughed and said, Restaurant business. Wrong, he said. Were in the REAL ESTATE business. If you thing about it, hes right. look about the location that every McDonalds is at. Isnt it in a prime real estate location And McDonalds owns the dirt that just about every stand-al one McDonalds located at. Thats a TON of equity that the company has construct up over the years in each real estate location. They could sell any chaw and make a killing off it compared to how much they paid for it a number of years ago. I would say the secret to McDonalds success is very similar to real estate - location, location, location. (MFFI 2003)In targeting for international growth, the counterbalance step according to Siebert (1998) is identifying the best counties for ones busy concept with such factors as franchise climate, the market for ones particular product or service, competitive factors, proximity, language barrier, political climate, and relevant legal concerns. Once a market is identified, he says one effective means of targeting prospects is the use of trade missions. Sponsored by groups such as the International Franchise Association, trade missions attempt to provide franchisors with introductions to a number of qualified candidates in each country. Acco rdingly, the franchisor is said to typically be responsible for their own expenses (which can run upwards of $10,000 currently), their own follow-up, and their own negotiations. The sponsoring judicature is only responsible for the introduction. Another alternative Siebert (ibid.) suggests for franchisors interested in global expansion is the use of brokers. Brokers are said to work by promoting ones franchise within a particular market, and will often engagement a