Transcript Growth and Expansion

Ch.14 Growth and Global
Expansion
McGraw-Hill/Irwin
Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved.
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Learning Objectives
1. Domestic growth strategies.
2. Franchising: franchiser, franchisee.
3. International strategies, 5C in a
borderless world.
4. Global service Strategies
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1. Expansion Strategies (Risks)
Single Service
Single
Location
Multisite
Multiservice
Focused service:
Clustered service:
* Family restaurant
* USAA Insurance
Focused network:
* Federal Express
* McDonald’s
Diversified network:
* American Express
e.g. Concentric diversification!
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2. 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
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3. Generic International Strategies
High
Force
Towards
Global
Integration
Low
Global
Strategy
No
International
Strategy
Low
Transnational
Strategy
Multidomestic
Strategy
High
Force Towards Local Responsiveness
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3. Globalization of Services
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The Borderless World (Kenichi Ohmae,
1990), 5C: Customers (Triad), Competitors,
Company, Currency, Country
It may be offset by others!
Sony: Global localization!
McDonald in Germany: Beer!
Mr. Donut’s in Japan: changed everything
but logo!
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3. Planning Transnational Operations
1. Cultural Transferability: Commercial bank
in Middle East (Muslim)
2. Worker Norms: Cultural Dimensions,
Hofstede, 2004
3. Host Government Policy:
Labor-intensive services: ok.
Information? Restrictions in China!
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4. Global service Strategies
(Risks)
1. Multicountry Expansion: standard, routine.
2. Importing Customers: Develop foreign language
& cultural sensitivity.
3. Follow Your Customers: Move experienced
managers.
4. Service Offshoring: Home office employee
morale.
5. Beating the Clock: Provide extended hours of
service, Common language necessary. e.g. India.
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Topics for Discussion
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Recall that service operations can be classified as
processing people, goods, or information. What
challenges are faced in each category when
globalization is undertaken?
Chili’s, a U.S. – based restaurant chain that offers
Mexican food, has its largest establishment in
Monterrey, Mexico. Why is Chili’s so successful in
Monterrey?
What is the inherent conflict in a franchising
arrangement?
What explains the continuing trade surplus in services
for the United States?
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Interactive Exercise
Break the class into small groups with at
least one international student in each group,
if possible. Based on overseas travel, have
the group report on features of day-to-day
living that they have found different from
home and worth emulating.