Nobody downloaded yet

The Franchise Agreement with International Company - Case Study Example

Comments (0) Cite this document
Summary
The main idea of this study is to analyze the Auchan idea to enter into a franchise agreement with Landmark Group. The author assesses the rationale for choosing India, the justification for the entry mode, competitive advantage through entry mode…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.1% of users find it useful
The Franchise Agreement with International Company
Read TextPreview

Extract of sample "The Franchise Agreement with International Company"

Download file to see previous pages The Landmark Group, founded in Bahrain with a single shop, has grown into one of the largest retail organizations (Landmark Group, 2012). Currently, the Landmark Group operates the SPAR hypermarkets and supermarkets in India but their agreement with SPAR is set to come to an end. Auchan Groupe intends to enter into a franchise agreement with the Landmark Group until India amends its FDI policy. As of now, India does not permit FDI (Foreign Direct Investment) in multi-brand retailing.
The rationale for choosing India India offers huge potential for the retail sector as the disposable income of the middle-class has been growing. FDI in different sectors has been increasing in India and the Indian currency (Rupee) has become strong in the international market. However, PEST analysis would help in evaluating if Auchan’s decision to enter India is a viable proposition. Political The political situation in India is unstable as it has a coalition government since no single party has a clear majority. The industrial sector also faces opposition and the growth in agriculture has been slow. However, the role of the central government as the intermediary of the state governments is now ending (Mohan, 2006). This indicates that states now have autonomy while the growing middle-class favors liberalization.
The business conglomerates in India have turned their attention to retailing (Deloitte, 2008). The Ministry of Commerce and Industry, Government of India, is the nodal agency for monitoring and reviewing the FDI policy in India on a continuing basis (Tyagi, 2010). Economic The Indian economy has undergone tremendous change. The Indian economy has recorded high growth rates and is an attractive destination for investments (IBEF, 2011). The Indian economy is expected to grow at 7.5% and is expected to contribute to the recovery of the world economy. The Gross Domestic Product (GDP) was 8.5% during 2010-11 against 8% in 2009-2010. Over the next two years, India is expected to attract FDI worth USD 80 billion according to a research report by Morgan Stanley as cited by IBEF. India’s retail sector is expected to grow to $635bn by 2015 (Sengupta, 2008). At the same time, food retail is expected to grow to $1.6bn over the next five-year period (Srivastava, 2008). Social The modern cities such as Delhi, Mumbai, and Bangalore show evidence of modernization and adaptation to western standards under the influence of globalization (Pick & Dayaram, 2006). Growth and development in communications technology, development of transport infrastructure, widespread availability of western goods and rising real estate prices have challenged the traditional habits and practices in India. Consumerism has influenced the buying habits of the Indian consumer. India has become the “next big thing” for the world’s leading retailers (Deloitte, 2008). Consumer spending in India is expected to be strong.
India uses advanced telecommunications technology and is much advanced in different modes of communication such as broadband and mobile technology. The retail sector uses advanced technology globally and India offers the necessary infrastructure to handle this. India offers immense potential in the retail sector despite government constraints and regulations. Consumer spending, technology, the economic situation, and the political environment are all conducive to the growth of the retail sector in India. Thus, Auchan could consider expansion into India. ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“International Business Essay Example | Topics and Well Written Essays - 2250 words”, n.d.)
Retrieved from https://studentshare.org/business/1395088-international-business
(International Business Essay Example | Topics and Well Written Essays - 2250 Words)
https://studentshare.org/business/1395088-international-business.
“International Business Essay Example | Topics and Well Written Essays - 2250 Words”, n.d. https://studentshare.org/business/1395088-international-business.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF The Franchise Agreement with International Company

Franchise Business

...in different parts of the country. This idea was prompted by the fact that his company staff could not provide sufficient training to the customers who bought his product (Sherman, 2011). In 1960, Ray Kroc, an American fast food business man after taking over small chains of food companies laid strong foundations for one of the most successful food franchises in the world. Due to globalization and reduction of barriers to international trade like tariffs, many firms driven by the need to increase production of goods and services have used franchising as a perfect tool to market their products in other countries outside the place of incorporation...
5 Pages(1250 words)Research Paper

International Agreement of two companies

...? Law No: Scenario: George Ltd is a plumbing firm in London. It has entered into a five year agreement with the Malaysian company CheapStock Corp. for the supply of toilet flushes. Their contract contained the following term:  Any disagreement or dispute between the parties is to be settled by arbitration.  A year after the signature of the contract, George Ltd wishes to terminate the agreement due to changes in the business environment. CheapStock considers the termination a violation of their agreement.  Advise George Ltd as to the validity of the arbitration clause and on the steps that need to be taken to commence arbitral proceedings. Introduction Arbitration is an...
9 Pages(2250 words)Coursework

Subway Franchise

...? Subway Franchise Subway Franchise The franchise concept has several advantages for both the franchisor and the franchisee. For the franchisor, offering a franchise arrangement means an easy access to capital formation brought about by the investments of franchisees (Om Sai Ram Center for Financial Management Research, 2006). Furthermore, it provides incremental income for the franchisor through royalty payments. Another advantage of the franchise concept is that it makes possible a faster expansion program for the franchisor supported by motivated distributors in the person of the franchisees (Om Sai Ram Center for Financial Management Research, 2006)....
4 Pages(1000 words)Essay

Franchise law

...Franchise Law Take Home Exam Joe’s Franchise Renewal In general, a franchise renewal involves the expiration of an existing franchise agreement and the formation of a new franchise agreement. In other words, a renewal operates to replace the expired franchise contract. All state laws refer to the right of refusal to renew or non-renewal parameters with a general understanding that should the parties renew the franchise, it is on very different terms and conditions (Barkoff and Selden). The main issue is usually whether or not the terms and conditions for renewal constitute good faith and...
12 Pages(3000 words)Essay

Wendy's Franchise

...arrangements or markets which are far removed from the orbit of operations. However franchising would enable the company to carry out a market evaluation and make appropriate changes in its strategy as a continuous task. Continuity at every level of foreign operations is ensured when the host country operations are wholly owned by the parent company. Franchising fast food restaurants would be just appropriate due to the strategically determined advantages associated with the international marketing mix. Wendy’s fast food items especially hamburgers have been known to attract the busy people including those couples going to work in the morning....
5 Pages(1250 words)Essay

Franchise Paper

...Franchise business Franchise Business Franchise business is the type of business when the founders of the business sell operating rights to the interested parties. The third party buys the right to operate a business using the logo of the franchiser. In the business world, franchises are so common that it is easy to spot one almost in any street within a business district. Franchise operation requires the franchisee to subscribe an initial amount of payment to acquire the right to operate his/her business. The franchisee will also receive training and equipment requisite for the conception of the business, from the...
2 Pages(500 words)Research Paper

Franchise Business and Non-franchise Business

...businesses as it allows the company to grow capital invested by the individual franchise; (2) It also allows multiple units to be opened at the same time which are supported by the parent organization in terms of advertisements and other promotional activities; (3) such a business has a greater market because of the availability of the availability of the business units in different parts of the market, bringing the business close to the customers while at the same time increasing competitiveness; (4) there are increased chances of a developed employee morale because of the fact that they are working with a large organization not an individual as they feel that their jobs are secure and that the parent...
9 Pages(2250 words)Case Study

Any franchise

...the limited sport shops for utilities. The city offers a ready market for sports utility Management; The success of these company beings with exceptional leadership as well as an innovative management team that is knowledgeable and experienced to handle the matters in the franchise business. Since this is a small start up, we would not be in a position to have a big management team ( Liberson 23). The C.E.O will be accorded the mandate to higher his workers. The management team will be liable in the running of the operations of this franchise under the authority of the CEO. The CEO will have the powers to take the company to another level. Marketing; Marketing remains...
2 Pages(500 words)Essay

Subway Franchise

...Subway, a global franchise, presents lucrative opportunities for investment. The franchise has many franchisees anchored by solid entrepreneurial spirit. The company has various franchise options for anyone interested in franchising. The available options encompass satellite locations, non-traditional locations, school lunch program areas, national park locations, airport terminal locations, and community development program locations (Franchise Direct). The franchise has set different franchise fee. The investors in the United States and Canada pay $15,000 as franchise fees (Subway). On...
1 Pages(250 words)Article

Franchise business VS non-franchise small business

... Franchise business vs. non-franchise small business Introduction This report focuses on the differences between a franchised and a non franchised small business in the same industry. Mrs. Kai’s dry cleaning service in Korea is a franchised laundry pick up store by the franchise ‘Cleantopia’. Mr. Choi’s Burnham Cleaners is a dry cleaning shop in Burnham Apartments, Chicago. Both businesses are sole proprietorships and have only a few employees. They are successful dry cleaning stores that have been operating for less than five years. Franchisee: Cleantopia Deachi, Korea Cleantopia is the leading laundry service in Korea. It introduced...
10 Pages(2500 words)Term Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Case Study on topic The Franchise Agreement with International Company for FREE!

Contact Us