Michel’s Patisserie
Global Marketing
325-309
Assignment 2: Michel’s Patisserie
Word Count: 1979
(excluding title page, executive summary, tables, and bibliography)
I Executive Summary
This report analyses the expansion of Michel’s Patisserie into the Chinese market through the creation of joint venture franchise agreements. Michel’s will be evaluated based on the motivations for expanding to China, process of internationalisation, choice of entry mode, and standardisation versus adaptation decisions. This analysis will be undertaken so that recommendations can be made to determine the most effective means of securing the future success of Michel’s in Shanghai. It will be demonstrated that while the motivations for expansion were fundamentally sound (being largely proactive rather than reactive), Michel’s Australian managers should have invested more time and money into research before the commitment was made. The process of internationalisation was perhaps too informal and while the entry mode was sound, there should have been more support for the franchisees from Australian management. Moreover, the initial standardisation versus adaptation decisions did not recognise the significant differences in culture and tastes in Shanghai. Accordingly, we have recommended that Michel’s Patisserie develop a long-term strategic commitment sympathetic to cultural, social and legal differences, and invest more heavily in advertising to establish the brand and avoid confusion regarding its French-Australian origins. Further, Michel’s may continue to test the market and engage in further research to determine the most viable product offerings for the Shanghai market.
II Introduction
Michel’s Patisserie was established in 1988 and has grown to become one of Australia’s most successful patisserie and franchise groups. It now has over 300 outlets throughout Australia (http://www.michels.com.au) and has expanded internationally into New Zealand and Shanghai, China. This report will
325-309
Assignment 2: Michel’s Patisserie
Word Count: 1979
(excluding title page, executive summary, tables, and bibliography)
I Executive Summary
This report analyses the expansion of Michel’s Patisserie into the Chinese market through the creation of joint venture franchise agreements. Michel’s will be evaluated based on the motivations for expanding to China, process of internationalisation, choice of entry mode, and standardisation versus adaptation decisions. This analysis will be undertaken so that recommendations can be made to determine the most effective means of securing the future success of Michel’s in Shanghai. It will be demonstrated that while the motivations for expansion were fundamentally sound (being largely proactive rather than reactive), Michel’s Australian managers should have invested more time and money into research before the commitment was made. The process of internationalisation was perhaps too informal and while the entry mode was sound, there should have been more support for the franchisees from Australian management. Moreover, the initial standardisation versus adaptation decisions did not recognise the significant differences in culture and tastes in Shanghai. Accordingly, we have recommended that Michel’s Patisserie develop a long-term strategic commitment sympathetic to cultural, social and legal differences, and invest more heavily in advertising to establish the brand and avoid confusion regarding its French-Australian origins. Further, Michel’s may continue to test the market and engage in further research to determine the most viable product offerings for the Shanghai market.
II Introduction
Michel’s Patisserie was established in 1988 and has grown to become one of Australia’s most successful patisserie and franchise groups. It now has over 300 outlets throughout Australia (http://www.michels.com.au) and has expanded internationally into New Zealand and Shanghai, China. This report will
Bibliography: Czinkota, M. R. and Ronkainen, I. A. 2004, International Marketing, 7th ed, Thomson South-Western. Deckers, W. (2004), China, ‘Globalisation and the World Trade Organisation,’ in Journal of Contemporary Asia, Manila: Vol.34, Iss Hofstede, G. and Hofstede, G. J. 2005, Cultures and Organisations: Software of the Mind, McGraw-Hill, New York. Hougan, G., Hung, C. L. & Wardell, R. (2000), ‘Research note: Product Adaptations for the Chinese’, Thunderbird International Business Review, 42 (5), pp Mac Donald, F., Mayer, M., and Buck, T. (1999) The Process of Internationalisation, London, UK.