WHY GO GLOBAL?

PROACTIVE REASONS
1. Increased profits
2. Unique goods or services
3. Technological advantage
4. Exclusive market information
5. Owner-manager desire
6. Economies of scale

WHY GO GLOBAL?
REACTIVE REASONS
1. Competitive pressures
2. Declining domestic demand
3. Overcapacity
4. Proximity to customers
5. Counterattack foreign
competition

GLOBAL STRATEGIES
A. EXPORT STRATEGIES

B. CONTRACTUAL STRATEGIES

C. INVESTMENT STRATEGIES

EXPORT STRATEGIES
1. INDIRECT

2. DIRECT AGENT / DISTRIBUTOR

3. DIRECT BRANCH / SUBSIDIARY

CONTRACTUAL STRATEGIES
LICENSING
FRANCHISING
TECHNICAL AGREEMENTS
SERVICE CONTRACTS
MANAGEMENT CONTRACTS
CONSTRUCTION / TURNKEY CONTRACTS
CONTRACT MANUFACTURE
COUNTERTRADE AGREEMENTS

INVESTMENT STRATEGIES
1. SOLE VENTURE
(a) NEW ESTABLISHMENT
(b) ACQUISITION

2. JOINT VENTURE
(a) NEW ESTABLISHMENT
(b) ACQUISITION

Global Franchise Explosion

Increased disposable income
Rising educational levels
Universal cultural trends
More women entering workforce
Smaller families with more incomes
Enthusiasm of younger generations
Demand for quality & service

Why Franchise?
More rapid expansion at lower capital
cost
Motivated owner/operators
Economies of scale and operating
efficiencies
Revenue
Location
Flexibility

Barriers to Global
Franchising
Culture, Culture, Culture!
Location, Location, Location!
Intellectual Property Protection
Political/Legal Framework
Availability of Raw Materials
Availability of Skilled Managers
Education and Training
Quality Control
Marketing Strategy