• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Business memo - Challenges McDonalds faces by establishing franchises abroad

Extracts from this document...

Introduction

TO: Franchisees FROM: Market analyst DATE: November 27, 2012 SUBJECT: Challenges McDonald´s faces by establishing franchises abroad Market research and analysis show the successful franchise adaptation of McDonald´s, a leader in the fast-food market for decades, around the world. Owning a McDonald's franchise can be safer than lesser-known franchises. On the other hand, becoming its franchisee oftentimes ties up the entrepreneur’s hands. What challenges does a franchisee face to successfully establish the business in a foreign market? To help potential franchisees, following is a brief explanation of the benefits as well as the drawbacks of this type of business. First off all, let´s mention the major advantages to buying a franchise: 1. Help with start-up – acquire all the equipment, supplies and instruction or training needed to start the business and running it afterwards from a single source. ...read more.

Middle

2. No Absenteeism – for the sake of its fixed model, the franchisee needs to involved with the day-to-day operations of the restaurants. 3. Entrance costs and on-going costs – obtaining the franchise license demands a significant amount of capital as well as paying a royalty. 4. Pigeonhole – the vision in consumers’ eyes correspond to an obesity epidemic, which portrays McDonaldss in a highly negative light in the media. Taking franchising into consideration from both sides as well as market analysis generally is the best way for new business owners to reduce risk. Buying a McDonald´s franchise may be an easy way to enter the fast-food industry but it is definitely not an easy walk. The advantages and disadvantages of setting up a franchise are not the only important factor. ...read more.

Conclusion

5. Language barriers – even a bad translation into foreign language may depreciate the value of the franchisor image 6. Consider the difference in perception – an example is McDonald´s food in Japan where it is considered a snack because of the impossibility to share with others, as well as mixing bread and meat which is alien to them. Major important difference is lack of rice, seen as a good nutrition. All these problems are ones that the potential franchisee may think about before his decision to enter a foreign market. The excellent orientation on home market, the possibility to modify business plan with necessary changes to incorporate into a new environment is the only feasible way to turn the business into a successful one in a foreign market. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Case Studies and Analysis section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Case Studies and Analysis essays

  1. Unit 9: Marketing Strategy

    "To improve on sales by 10% per month" My final marketing objective was simply sales related, I think that the enthusiasm of prospective customers shows that sales will increase by at least 10% per month as the business builds up a strong customer base and brand loyalty.

  2. Unit 12 - International Dimensions of Business Task 1

    A target market is a specific brand of people mixed with different characteristics that a company are focusing on to sell their product or service to. For this part of the task, I will identifying and explaining the target markets of both RyanAir and British Airways and the similarities and differences I find along the way.

  1. What are the micro and macro environmental forces which may pose direct or indirect ...

    Losing a customer as huge as McDonald's could break the supplier. McDonald's also has to make sure the supplier can supply, given the large scale they need to make sure the supplier can meet their demands. Threat of substitute products or services is the third force.

  2. Small Business Strategies - identifying the target market, necessary skills, plans for development and ...

    Therefore, learning new skills as well as making the most of the skills that I already possess is really important. Very rarely does one person posses all the skills required in the running of a successful business therefore recruiting the right staff to take on certain roles is a must.

  1. PEST is a planning tool which is used by a business to evaluate and ...

    This is because Ginsters could end up having fewer customers than their competitors Puka pies due to the fact that there is more competition in the recession between these businesses in the savoury food market as there is less money in the economy meaning that businesses have to compete against

  2. The main purpose of this research is to know and analyze whether the Olympic ...

    and engage them selves in celebrating these kinds of activities such as torch relays, test events as well as live sites. On these special occasion the business packages such as tourism, travel as well as hospitality services are been included. The prospective customers are been informed with the services available.

  1. NETFLIX CUSTOMERS SATISFACTION

    Dissatisfaction, in the other h?nd, m?y le?d to public compl?ints neg?tive word of mouth communic?tion, ?nd shopping beh?vior ch?rges. ?ccording to J?cobs (1999) ? customer is s?tisfied when ? product performs better then expected, diss?tisfied when expect?tions exceed perform?nce. Customer Dissatisfaction Liter?ture h?s t?ken two ?ppro?ches to conceptu?lizing ?nd oper?tion?l zing the dissatisfaction construct.

  2. The international business environment of Apple Inc

    The international monetary fund is located in America. The purpose of this organisation is: 1. to monitor the global financial health 2. present the guidance that is required by those who need it 3. maintain the global monetary cooperation 4. help international trading 5. ensure financial stability 6.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work