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

International Business - Franchising - Essay ExampleArnold (2003) claims franchising is an under-explored entry mode in international grocery stores but that it has been widely use in North America and Western Europe, most notably by fast food chains, hotel or car rental services. The craft format is fixed, including the military 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 turn in a marketing mix that matches expectations of consumers in varied cultures.But major players are said to be increasingly learning. McDonalds, for example, as described in MFFI (2003) is thinking spherically 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 b urger 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. One thing that could be credited to McDonaldss success is their posture, location, location strategy which their executives know too well (ibid.). Consider this - A champ 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 crowd laughed and said, Restaurant business. Wrong, he said. Were in the REAL ESTATE business. If you thing about it, hes right. Think about the location that every McDonalds is at. Isnt it in a prime real estate location And McDonalds declares the land that just about every stand-alon e McDonalds located at. Thats a TON of equity that the company has built up over the geezerhood in each real estate location. They could sell any lot 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 first step according to Siebert (1998) is identifying the best counties for ones concomitant concept with such factors as right 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. Accordingly, 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 organization 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 employ a