Internatioal Management Case Study: Metro Cash & Carry

Corporate culture from the founders of the company continues to be observed. The basic foundations on which the company was built is maintained. By franchising CMG would be passing its trademarks, and systems to outsiders. They would need to find ways to monitor them to make sure they are being maintained. Also there is the risk that the franchises may not maintain the culture of CMG and this may change the perception of Chipotle to customers. This would have a negative effect on the corporate branches. Even though CMG will have the right to terminate franchisee operations that do not follow the system it may have already caused damage. Also by not franchising CMG does not lose some profits by involving a

A new business claims a great deal of time, effort and sacrifice. New individuals are motivated by their ownership of the business and the capital they have invested. So by franchising, you are going to get better talent that will work harder to form the business.

Patient’s property stored in the safe in the Cashier areas that remains unclaimed for 30 days after the second written notification has been sent to the patient, shall be transferred from the medical centers to a centralized secured repository within Finance/Treasury at 1400 Treat for further disposition.

Macdonald’s offers a strict, but mutually beneficial franchising and licensing agreements that have a term of 20 years (McDonald’s, 2014). Before an individual obtains a franchise or a licensing opportunity, a careful scrutiny of the restaurant location must conform to expectation of future growth of the business. The scrutiny ensures long-term profitability of the restaurant. The process of setting up a restaurant is very thorough. The franchising and licensing agreement allows the corporation to have enough cash for further expansion. Expansion creates dominance and goes a long way to stamp authority as a

The final strategy MacDonald’s can use for growth is Diversification. This is when a business decides to sell new products in a new market. MacDonald’s may open a new store in a different location such as Bangladesh and sell new products like the four times bigger cheese burger I was discussing about earlier on. This could more likely put MacDonald’s in risk because and they wont have much knowledge about the new market. If they know selling a new product in an existing market might be risky then selling a new product at a new market would be twice more risky. The reason for this is because they won’t know if the new product is going to succeed they don’t have much knowledge about the market

Diversification is not the best of the idea for the association since it can't stand to make new things in the new markets. It's truly implausible with the franchisee structure that McDonald's grips. Keeping adjacent to Franchisee structure McDonald has moreover shown achievement in this framework by owning a prevailing part stake in Chipotle Mexican Grill and Pert A Manger and securing Donatos Pizza. McDonald's grasped both thing and business part headway frameworks which was outside the inside abilities of the

• The most critical opportunity is the location(s) of expansion. Focusing on long-run profit potential would be expanding in a familiar ‘home-base’ region. From the alternatives, a location(s) that could achieve all key success factors coupled with a strong Franchisee base (that meets required criteria) would be the first step to the desired goal of the revenue growth process. From this foundation, a critical path to overcome market entry obstacles would need to be addressed.

The third circumstance for MNEs using IJV is to gain access to a specific market, where regulations favour domestic companies for example China, Russia (EU) (Dr. Ananthram. 2016). In this case the MNEs do not have the understanding of carrying out business activities in another country, which may include the taste of consumer products or appropriate methods of distribution which in turn can prove to be expensive and time

Multinational companies opt to franchise as a way of expansion strategy (Siebert, n.d.). Chick-fil-A is dominant only in the US market. The firm has only ventured into the Canadian market in the airport of Calgary. Many United States Corporations have engaged in franchising in the United States as a form of the expansion strategy. Laws concerning franchising are neither strict in Canada. Our form of non-equity mode will be franchising, therefore our form of entry will be a small-scale entry. This will allow our company to get exposure in key locations and learn from Canadian consumers. The benefit to franchising at first is that it is less costly and less risky for the franchisor.

The 3 entry modes present different advantages and drawbacks, Franchising Strategy showed low control in the operations, low risk of exposure, low investment and high support from the local partner. Joint Venture entry mode indicated moderate-high investment, moderate risk, medium exposure and moderate control. Lastly, Greenfield entry mode denoted high risk, high investment, high control of the operations and high exposure.

It has its advantages and disadvantages to franchise the business. It is a careful decision to make for anyone to invest a lot of money into a franchise and everyone should be comparing pros and cons.

Franchisors are increasingly having to be more and more selective in the adoption of franchisees with factors such as economic climate and the potential difficulty with growth playing key factors in the decision making process. It is not simply an ability to grow which creates a successful Franchise and nor is it the desire of any franchisor to adopt every potential franchisee. Franchisors are becoming more and more scrutinising as the global economy declines. There is a general understanding within any franchised

McDonald’s has extremely strict rules when it comes to awarding franchises. First, it is very costly to open a new location or purchase an existing location, with the median startup cost being $300,000 (Kalnins & Lafontaine, 2004, p. 750). As well, the company does an extensive background check on a variety of issues including credit history, business management experience, and the acceptance of the contractual agreement that the company provides. Because of these strict rules and the large amount of capital needed to purchase a location, “rates for franchise applicants are 1% for McDonald's” (Norton, 1988, p. 204). This is an extremely low acceptance rate and is even lower than McDonald’s chief competitor, Burger King, who accepts 1.5% percent of applicants (Norton, 1988, p. 199). These low numbers are understandable in the context of the business and risk that is involved. Though the franchise purchaser must pay a large amount of money to gain the rights to the restaurant, they truly have nothing to lose besides money because they are simply running another company’s business model as well as using their trademarks and logos. McDonald’s on the other hand, has a great amount at stake because they place the well being of an entire restaurant into the caretaking of an individual who simply purchased the rights for the store. If the store does poorly or if there are issues with customer service, it reflects

* To structure deal as joint venture, which would be an economical approach to entering the market with the access to the technology, cross-marketing and profits. May bring, however, the lack of control to achieving "Anywhere, Anytime" vision.

‘As a result, expansion can proceed at a much faster pace than would otherwise be possible, enabling the franchisor to achieve increased market share whilst benefiting from economies of scale.’ (http://www.butterfield.co.za) Finally, franchisors can benefit from the cultural knowledge and know-how of local managers. This can be helpful in lowering the risk of business failure in unfamiliar markets, as well as creating a competitive advantage. Franchising offers franchisees the advantage of starting up a new business quickly based on a proven trademark and way of doing business, as opposed to building a new business from scratch. The franchised business is based on a proven idea and has an existing customer base, therefore making it much easier to sell your product than it would if you were to start up your own business.