Order from us for quality, customized work in due time of your choice.
Given the nature of the business, Sprout&Co plans to adopt a licensing and franchising entry strategy into the international market since it offers numerous benefits over other market entry approaches. Franchising is a global market entry option referring to a licensing agreement between two parties, the franchisor, and the franchisee, stipulating the obligations of each of the parties concerning the business and its services. Generally, a company may license the production of its goods and services to retail companies or semi-independent subsidiaries responsible for providing these goods to consumers at an agreed price (Skripak et al., 2018). However, the franchisee does not sell these products under their brands. Instead, they adopt the franchisors brand and tailor their services to conform to services provided in similar outlets. As a result, adopting this approach will enable the organization to set up its restaurant and create awareness of its brand in several areas simultaneously.
The international business landscape exhibits different characteristics because of economic regulations, sanctions, currency flows, and unstable markets. However, licensing and franchising is a market entry solution that allows entrepreneurs to shield their businesses against most of these risks since they only provide others with the right to sell products without investing resources and personnel. As a result, franchising is beneficial because it allows organizations to focus on other critical factors of market expansion instead of the establishment, distribution, and sales. Thus, the approach is recommended to organizations seeking to expand their services to other areas or international borders faster and with less effort. Since Sprout&Co aims to minimize its expansion costs, franchising is the best option since it will allow them to plan and manage its resources and finances.
The global expansion comes with unique challenges due to the uncertainties of introducing products to new environments, litigation, problems with establishing relationships with new suppliers, and other issues. However, licensing and franchising leverage the management skills of teams that are familiar with the business environment in their regions. Therefore, the strategy is reliable in limiting the complexities of market entry into a new environment. Furthermore, licensing and franchising provide more control and exposure of an organizations brand, its value, and its benefits to consumers, as the franchisor has the upper hand and control over critical management decisions, the organizations culture, and priorities (Skripak et al., 2018). Therefore, the solution will enable Sprout&Co to create awareness of its brand to a larger consumer population and attract individuals with their shared value of health and wellness.
Proposed Internationalization Strategy
An internationalization strategy refers to the solutions a business adopts in the exchange of goods and services in a new territory. Thus, an internationalization strategy can either focus on creating a competitive advantage or consumer satisfaction to attract more individuals to purchase its products. However, internationalization strategies are critical to the success of businesses because they target market appeals (Couto & Ferreira, 2017). On that account, Sprout&Co plans to embark on a product internationalization strategy that takes advantage of the organizations unique approaches to meal preparation. These days, many individuals do not have the time to prepare healthy food using natural ingredients since generic items are cheaper and easier to access. Therefore, an internationalization strategy that focuses on offering unique servings will propel the organization to greater heights.
Moreover, a multi-domestic internationalization strategy reflects the ultimate aim and purpose of the business, which is to help individuals live happy and healthier life by keeping them satisfied with rich nutrient organic foods. Thus, considering the products and services provided by the organization, it would be best to introduce its values to new regions and compete as a local service provider because most individuals still prefer their local delicacies. Therefore, the organization plans to attract more people by serving them a healthier version of their popular local dishes. Nonetheless, the organization may include specialized international dishes for adventurous individuals and people who love trying out exotic foods. When targeting a new market segment, it is crucial to provide services that the market segment can resonate with and compare to other products or services. Therefore, the multi-domestic approach focusing on product quality will enhance its business and provide a continuous flow of customers.
Moreover, a multi-domestic internalization strategy introducing consumers to various variants of the food they are familiar with at home aligns with the business expansion strategy of licensing and franchising since it accommodates hiring managers, personnel, suppliers, and service providers from the local areas. Since the company plans to compete with local players in the regions where it is expanding its business, it would be wise to employ people who have worked in the industry before and professionals who can provide essential management insights on how to achieve higher sales and ensure sustainability (Couto & Ferreira, 2017). Therefore, a multi-domestic approach will allow the organization to streamline all its activities, avoid complications, and deliver the highest quality food servings in the area using the regions labor force, resources, and collective minds of experts in their industries.
References
Couto, M., & Ferreira, J. J. (2017). Brand management as an internationalization strategy for SME: A multiple case study. Journal of Global Marketing, 30(3), 192-206.
Skripak, S. J., Cortes, A., Walz, A. R., Parsons, R., & Walton, G. (2018). Fundamentals of business. VT Publishing.
Order from us for quality, customized work in due time of your choice.