Developing and Managing an Enterprise Essay Example | Topics and Well Written Essays - 2500 words

Developing and Managing an Enterprise - Essay Example Majority of the operation of the company are operated by franchises in which separate franchisers buy the rights to operate their business under the name of McDonalds while providing the same quality and service in its products as is the product and service offering of the McDonalds Company. (Rensi, 1995) Standalone businesses as well as franchises can be launched by entrepreneurs who seek to establish unique and innovative business. The main difference between an entrepreneur and any other form of business man is that entrepreneurs are willing to take on risks. They do not take on excessive risk; instead they are "calculated risk takers, who define the risks inherent in any venture and attempt to minimize them" (Kathleen, 2006, p6) The advantages that are available to standalone businesses pertain to the fact that the proprietor can run the business, according to their own wishes and plan the product and service offering as per the plans of the proprietor (Lewis, 1994). They have almost complete control in the development of the business, its strategic expansion as well as the positioning of the company and the products in the market. "The advantage of buying an independent business over a franchi... "The advantage of buying an independent business over a franchise is that the business you buy is yours to do with what you will. You do not have to maintain any aspects of the business that do not increase profits, and you can implement new ideas as you see fit. In fact, some business buyers look for struggling businesses that are undervalued because they know they can improve their profitability. Once the transition has been made, as the new owner, you have the full decision-making power." ('Should You Purchase a Stand-Alone Business or a Franchise', 2008, p1) The disadvantage of a standalone business however pertain to the increased risk that the company has to bear and the limited resource for funding and support that are available to the business. "Of course, with greater flexibility and full control comes increased risk. After all, as an independent owner, the business is contingent on your decisions. For this reason it is not always easy to obtain the necessary financing without an established track record of running such a business." ('Should You Purchase a Stand-Alone Business or a Franchise', 2008, p2) Moreover the business is solely responsible for establishing new relationships with suppliers, clients as well as vendors, distribution agents, media contacts and developing the marketing campaign of the business. The advantages of operating a franchise include that the franchise business is formed with a basis of a proven idea supporting it. Moreover it is possible for business to assess the performance and the success of other franchises of the same company before committing one. (Peterson & Dant, 1990)Aside from this, in a franchise the business can use recognized brand names and trademarks. The franchisor also

International Business Strategy Essay Example | Topics and Well Written Essays - 1750 words - 1

International Business Strategy - Essay Example Howard Schultz turned out to be the key success factors of the company. Such decision is discussed in this section. Product diversification to customer segment (Explanation Using Ansoff Model) Throughout the 90’s and the 00’s In order to target new customer segments Starbucks decided to go for product diversification. In 1994 Starbucks and PepsiCo entered in to a joint venture, which is now known as the North-American Coffee Partnership to sell product closely related to coffee in cans and bottles. Thus the Starbucks catered to a whole new customer segment. In 1998 the company allowed Kraft foods to become a licensed provider of the Starbucks ground coffees and whole bean across US. In this case Starbucks ensured product quality, while Kraft foods took care of promotion and distribution. In 2008 Starbucks struck a partnership with Apple iTunes and started providing pick of the week music card in the 7000 stores (Henry, 2008, p.131). The diversification strategy can be w ell explained by using the Ansoff Product grid matrix. The four key elements of the product matrix grid are market penetration, Market Development, Product Development and Diversification. Among these Starbucks went for diversification as the company launched new product in a new market. Here it may be added that although Starbucks provided new products, but the core product remained the same. Rather the company went for augmentation. This also meant that the company used concentric diversification instead of conglomerate diversification, because the company added new product s hat was similar in nature keeping the core product i.e. Coffee in mind. Store Expansion Strategy to achieve Market Expansion (Explanation Using Different Market Entry Modes and Strategic Actions) Even before becoming the President and CEO of the company Mr. Schultz had a vision to expand the business of the company. This was one of the key reasons for which Mr. Schultz bought the company. In the early 90†™s the company began the geographic market expansion strategy. The management of the company decided to work on a hub and spoke model to expand the market. In this case the major cities acted as a hub. It had specialist teams of professionals located in the hub. As a number of stores opened in the hub the company decided to open additional stores in the surrounding cities. The stores in the surrounding cities were monitored by the team of professional located in the hub cities. Due to such strategies very soon the company had a blanket of retail stores in the major as well as surrounding cities of the country (Wenderoth, 2009, p. 145). In the mid 90’s as a part of the expansion strategy the company got in to licensing agreements to cover those locations where the company may not able to have own outlets. The company entered into a licensing agreement with Marriot host international hotel operates in airport locations. Once the company had established a strong store network in United States the company decided to venture internationally. There were various options available in front of the company which