Question

in context to internationalization of business explain the concept of franchising and strategic alliances

Answer 1

International franchising is the expansion of domestic business into international countries and markets. The aspects of international franchising are discussed as below:

-- Replication: In international franchising, companies usually strive to replicate successful business models in domestic markets to the global markets.

-- Benefits: International franchising can result to new customers in new markets and selling potentials.

-- Challenge: Differences in laws, language, and financial systems among the franchising business and host foreign market may result to difficulties during international expansion

-- Adaptability: The learning to adapt according to the international demands may attract local buyers and customers, leading to more business in a new country

-- Counsel: The experts in International franchising can assist the companies understand a global market before expansion. They may provide advice on numerous subjects, from financing to culture gaps

A strategic alliance refers to an inter-firm collaboration over a given time and space in an economy to achieve the desired goal. The main characteristics of international strategic alliances are:

-- Two or more unit of firm pursue a set of agreed upon targets however remain independent subsequent to the Alliance formation.

-- The firm's partner share the gains of the alliance and also holds control over the performances; and the one that makes them so tough to manage.

-- The firm's partner contributes on a continuing basis in one or more key strategic areas, such as product, technology, and so forth