Transcript Growth and Expansion - University of Texas at Austin

Growth and Global Expansion
Learning Objectives
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Recommend an expansion strategy for a
service firm.
Discuss the nature of franchising.
Discuss the factors to be considered in
multinational development.
Describe and contrast global service
strategies.
Expansion Strategies
Single Service
Single
Location
Multisite
Multiservice
Focused service:
* Dental practice
* Retail Store
* Family restaurant
Clustered service:
* Stanford University
* Mayo Clinic
* USAA Insurance
Focused network:
* Federal Express
* McDonald’s
* Red Roof Inns
Diversified network:
* Nations Bank
* American Express
* Arthur Andersen
Franchising
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Benefits to the Franchisee
Management Training
Brand Name
National Advertising
Acquisition of Proven Business
Economics of Scale
Issues for the Franchisor
Franchisee Autonomy
Franchise Contract
Conflict Resolution
Multinational Development
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The Nature of the Borderless World (Triad)
Customers - information has empowered
Competitors - nothing stays proprietary
Company - fixed costs require large markets
Currency - become currency neutral
Country - deprive competitor of home market
Planning Multinational Operations
Cultural Transferability
Worker Norms
Host Government Policy
International
Strategic Service Vision
Target Market
Service Concept
Operating Strategy
Service Delivery System
--culture
--culture
--labor market
--technology
--industry structure
--perceptions
of value
--managerial
practices
--operating premises
--demographics
--expectations
--language
--usage patterns
--labor market norms
and customs
Considerations in Selecting a
Global Service Strategy
Global Service Strategies
Globalization
Factors
Multicountry
Expansion
Importing
Customers
Follow Your
Customers
Customer
Contact
Train local
workers
Develop
foreign
customers
Customization
Information
Intensity
Usually a
standard
service
Usually
routine
Satellite
network
Develop foreign
language &
cultural sensitivity
skills
Strategic
opportunity
Strategic
opportunity
On site advantage
Cultural
Adaptation
Modify
service
Accommodate
foreign guests
Labor Intensity
Reduced
labor costs
Government
restrictions
Increased labor
costs
Logistics
management
Modify
operations
Move
experienced
managers
Could be
necessary to
achieve scale
Hire local
personnel
Inadequate
infrastructure
Complexity
Other
Re-prototype
locally
Service
Unbundling
Beating the
Clock
Specialize in
Provide
front- or backextended
office service
hours of
components
service
Meet segments’ More need for
needs better
reliability &
coordination
Opportunity for
Time
focus
compression
May require
Exploit
heavy capital
opportunity
investments
Manage worker
Common
diversity
language
necessary
Reduced labor
Reduced labor
costs
costs
Merchandise
Capital
unbundled
investments
component
Topics for Discussion
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For service firms, how does the operations strategy
differ from the marketing strategy?
Is the competitive role of operations more important
for a service firm than a manufacturing firm?
Do you agree that the effect of learning and
experience on total unit cost has not been
demonstrated in a service situation?
Manufacturing firms often grow through product
innovation. Are there examples of service firms that
practice the equivalent strategy?
What is your assessment of the multinational
competition in services?
Goodwill Industries International
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Who are Goodwill’s customers and how have
their demographics changed over time?
How should the introduction of for-profit thrifts
affect Goodwill’s decisions about the role of
customer service?
How can Goodwill differentiate itself from the
competition?
Visit http://shopgoodwill.com/ where Goodwill
auctions items of special interest and discuss
why this on-line store has great profit
potential.
Goodwill Industries International
Sources of Revenue
Donated Goods
4%5%
5%
6%
Temporary
Services
Subcontract
Services
15%
65%
Public Support
Grants
Miscellaneous