Mode Of Entry Analysis

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Introduction It often comes a time when a company must decide if they want to expand their business or not. This is a critical choice to make for the future of the company. This is a time where a management of a company must evaluate their pros or cons when it comes to expanding the company. There are many ways to expand a company but it’s difficult to choose the right one. The term franchising is derived from the French, meaning “to be free from servitude”. Franchise activity was almost unknown in Europe until the beginning of the 1970s. The concept was popularized in the United State, where one-third of retail sales are derived from franchising, in comparison with about 11 per cent in Europe (Young et al.1989, p 111). Franchising is basically…show more content…
This mode of entry is very exciting for me. It has various of methods to export and manage a company from another angle. As marketers we talk about making decisions an organizations entry mode. When an organization goes like McDonald’s, Burger king or Rema 1000 goes from marketing their products only in their home market to also target one or several foreign markets in different countries or regions we talk about an organization internationalization process. Organizations go through different stages before they go international. They first go through a market selection process and then come to a choice of a global market. The marketing mix organizations use on foreign markets may vary to the one they use on the home market. They would have to address issues regarding standardization or adaption of foreign market. Choosing the right entry mode. Lets us use Norwegian cake firm Millba located in Skien as an example. The firm produces muffins, cakes and desserts. In a modern production facility in Skien where well educated confections develop recipes and create delicious cakes and desserts ready to be sold and distributed. The cake and dessert are immediately frozen after production and are the distributed to a variety companies, restaurants and cafés around…show more content…
- Tested system of operations. - Brand standard and services. - Site selection and development assistance. - Initial and continual training. - Headquarters and field support. - Support of other franchisees. - With established, well managed, well-structured and capitalized franchisors. But not all franchisors are equal. This last one is important because you’re getting support from other franchisees not only on general things, but you can pick up to phone and call other franchisees who has been in the business five or ten years and say, “I have a problem” and the response are likely that they been through the same problem when they were on the same stage as you. Because you both have the same brand and the exact same system, and they are more likely to give you a specific answer. They are basically you’re franchisees consultant advisors. Other key advantages for franchisees - Knowledge of range initial investment and working capital. - Leverage initial and continuing costs. - Professional marketing and assistance. - System accounts. - Better able to compete with established competition. - May improve exit value for
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