Subway Restaurants in Middle East - Research Paper Example

Subway restaurants Factors related to the global market International trade is characterized by numerous factors that influence many aspects of organization s venturing in the international market. In an argument by Fujimoto & Shiozawa, the international market is identified with numerous risks which generate from the large consumer market (34). The authors further point out that apart from the large consumer market, many competitors and legal operating rights pose as much a challenge to international organizations (Fujimoto & Shiozawa 35). Factors related to the global environment revolve around ensuring significant relevance of an organization in the global market. This ensures that an organization captures a significant consumer population thus enhancing and increasing sales and increases profit levels. Additionally, retaining a large profit margin is important in the global market. An organization should ensure that it generates enough funds to support an organization’s operations (Fujimoto & Shiozawa 37). In the global market, an organization requires enough funds to fund factors like advertising and marketing. For instance, marketing in the international market is an expensive venture which needs a steady flow of income at great margins (Fujimoto & Shiozawa 32). If the income level is poorly managed funding marketing projects would fail which would reduce an organization’s exposure to the consumer market. This would automatically reduce the income levels and may lead to the exit from the global market. Fujimoto & Shiozawa point out that stability; relevance and effective management are the three factors an organization in the global market needs to have in order to gain from the vast global market (66). For instance, Subway restaurant has a lot of competitors in the Middle East. For this reason, the organization should ensure the local consumers appreciate and recognize their international entity. However, it is an obvious assumption that international restaurant ventures in the Middle East have a great consumer attention level which creates a fair level of competition in the international organizations in the venture. Fujimoto & Shiozawa however, argue that an organization can easily manage their consumer appraisal level by generating a target over a certain period of time (55). This would make it simpler to manage and generate strategies to enhance stability of the organization in the global market. The industry analysis Intensity of rivalry With the numerous technological advancements in the Middle East, the location has attracted numerous investors and international market. This has increased the level of competition in the market and increased caution by organizations venturing in the market. In terms of restaurants and hoteliers the level of competition is much greater (Fujimoto & Shiozawa 43). The Middle East has become a top hub for tourists. This attracts the investments of many stakeholders in the hotel industry. Regardless of the many organizations, the industry generates large profit returns (Fujimoto & Shiozawa 44). This eases the intensity of the rivalry since the quantity of consumers is enough to support most of the hotel ventures. In the case of subway restaurants, the organization is limited in terms of offers given to the consumers. Additionally, this limits their exposure. Many organizations in the Middle East offer the same services with an aim of acquiring the same profit returns as the Subway restaurant. Substitute The Middle East provides a great number of substitutes in the hotel industry which makes it an important factor to consider effective competitive strategies. Top restaurant ventures across the globe such as McDonalds, Dorman’s, Costa Coffee and the local organizations create a large variety of substitutes in the market. Additionally, the consumers in this particular market hold each of the organizations with same sensitivity and significance. This likely puts every organization in the same level to become the substitute of the other in the intensified competition (Fujimoto & Shiozawa 59). New entrants’ threats New entries in this particular market have an uphill task to identify themselves to the consumer population. The majority of the significant consumer populations are international consumers. These consumers have an effective way of selecting a significant organization based on their previous experiences in other global location. Subway restaurants bearing significant global brand is preferred my many international consumers. This makes the organization less affected by new entries in the market since they already have an established significant market base. Bargaining power of the buyer The bargaining power of buyers in the Middle East is much less compared to other global locations. The Middle East is characterized by large investments and well off consumers who focus on quality rather than price. However, Fujimoto & Shiozawa argue that the bargaining power of the buyer depends on the organization they are trading with (60). For instance, consumers tend to be less bargaining when they trade in international organizations. The Middle East however has a high economy which puts its dwellers in a good financial position. They have fewer complains on the pricing of commodities. Bargaining power of the supplier In an argument by Fujimoto & Shiozawa suppliers trading in markets with numerous investor and international organizations tend to quote very high in order to get the most out of the competitive market (95). This situation is the same in the Middle East with suppliers quoting higher prices. However, the bargaining power is rather less when dealing with international organization which may opt to import supplies from their mother branch. This option is not considered much by organizations due to the indulging logistic process. Internal and external factors and their impact on business Internal factors in this market revolve around gaining a greater competitive advantage. This is done by offering quality services. The factors include HR management, financial management, generating strategies to implement and maintaining the growth of the organizations in terms of financial growth. External factors have the greatest significance in the market. They include competitors, legal formalities, consumer culture, marketing and financial status of the market. Poor management of these factors may easily lead to the downfall of an organization regardless of the size (Fujimoto & Shiozawa 67). Effective management of the factors reflects greatly in the growth of an organization in such a competitive market. Conclusion The Middle East provides equal opportunities and well as risks in its market. It is the responsibility of an organization to effectively implement the PESTEL analysis to effectively understand the market and get the best from the market. The Middle East is modern economic hub and organizations have a great opportunity in thriving in the market if both the internal and external factors and effectively managed. Work cited Fujimoto, Tai. & Shiozawa, Yung. Inter and Intra Company Competition in the Age of Global Competition: A Micro and Macro Interpretation of Ricardian Trade Theory, Evolutionary and Institutional Economics Review, 8.1 (2012): 1–37. Print. Read More