Global Business
1
Global Business Entry: Strategies and Alliances
Team: Global Integration
Greg Florey, Cherry Greene, Laurie Hackett, Clayton Mitchell, Ben Mosby, Tony Peralta University of Maryland, University College Dr. Monica Bolesta/AMBA 606D Spring 2006
2 Executive Summary Global expansion is the foundation to becoming a multinational firm. When attempting to enter into foreign markets, selection of the proper strategies and alliances play a critical role in determining company success. The purpose of this report is to review the possible modes of entry that the Tastykake Baking Company can select in order to successfully expand its operations. These entry options include: franchising, joint ventures, and outsourcing/off shoring. In this report there will be a discussion of each of these concepts that will include a review of their advantages and disadvantages along with how each of them apply to the expansion of the Tastykake Baking Company into the Brazilian and Turkish foreign markets.
3
Franchising in Brazil (Clayton Mitchell)
Defining Franchising Over the years, the Tastykake Baking Company has experienced tremendous growth. With annual sales reaching over $200 million, global expansion needs to be considered. The next possible mode of entry to be discussed is that of franchising. In the Hill text (20005), he describes it as being very similar to licensing and defines it as “a specialized form of licensing in which the franchisor not only sells intangible property (normally a trademark) to the franchisee, but also insists that the franchisee agree to abide by strict rules as to how it does business” (p.492). Typically, most companies that provide a service choose franchising as a way to enter foreign markets. The reason being is that this method is extremely cost effective and allows global identity to be established at a much faster pace. Some franchising examples include McDonald’s, Marriott Hotels Inc., Hilton Hotels Corp., KFC, and Wendy’s. The companies
Global Business Entry: Strategies and Alliances
Team: Global Integration
Greg Florey, Cherry Greene, Laurie Hackett, Clayton Mitchell, Ben Mosby, Tony Peralta University of Maryland, University College Dr. Monica Bolesta/AMBA 606D Spring 2006
2 Executive Summary Global expansion is the foundation to becoming a multinational firm. When attempting to enter into foreign markets, selection of the proper strategies and alliances play a critical role in determining company success. The purpose of this report is to review the possible modes of entry that the Tastykake Baking Company can select in order to successfully expand its operations. These entry options include: franchising, joint ventures, and outsourcing/off shoring. In this report there will be a discussion of each of these concepts that will include a review of their advantages and disadvantages along with how each of them apply to the expansion of the Tastykake Baking Company into the Brazilian and Turkish foreign markets.
3
Franchising in Brazil (Clayton Mitchell)
Defining Franchising Over the years, the Tastykake Baking Company has experienced tremendous growth. With annual sales reaching over $200 million, global expansion needs to be considered. The next possible mode of entry to be discussed is that of franchising. In the Hill text (20005), he describes it as being very similar to licensing and defines it as “a specialized form of licensing in which the franchisor not only sells intangible property (normally a trademark) to the franchisee, but also insists that the franchisee agree to abide by strict rules as to how it does business” (p.492). Typically, most companies that provide a service choose franchising as a way to enter foreign markets. The reason being is that this method is extremely cost effective and allows global identity to be established at a much faster pace. Some franchising examples include McDonald’s, Marriott Hotels Inc., Hilton Hotels Corp., KFC, and Wendy’s. The companies
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