Issues in International Business The Fast-Food Market

Question: Describe about the Issues in International Business for The Fast-Food Market. Answer: Challenges The fast-food market of Bangladesh is upcoming and growing along with the country. It would be extremely difficult for a foreign brand to enter the market, without any proper strategy or knowledge of the market. Moreover, local brands are already there to provide tough competition. KFC is already an established name in the fast-food industry, and has many advantages that can work as its strength while entering the market. However, some barriers and challenges would definitely come up for the brand while entering the Bangladesh market. Some of them are discussed below: Economic factor: Bangladesh is one of the developing markets on the planet. Bangladesh is expanding from a farming based economy to a mechanical assemblage based economy; however, the nation keeps up solid production, benefits and rural industry. Bangladesh is yet sustaining to being politically and financially steady and is interested in overseas venture contributions (Siddique, Selvanathan and Selvanathan 2012.). Socio-cultural factor: Society's states of mind have changed in the previous decade toward eating more beneficial nourishment choices, eating less broiled sustenance, and eating more decreased fat sustenance determinations (Marcucci 2014). The dominant part of KFC's menu things are singed nourishments. Today, KFC's clients for the most part pick the eatery they will eat at in light of value, speed and assortment of things. KFC's clients in Bangladesh are additionally truly value touchy and will go somewhere else on the off chance that they find that the esteem is not worth the cost. The clients can likewise be portrayed by being individuals that need to be served quickly and be out of the eatery in a matter of seconds. This is because of the expanding. In, Bangladesh KFC is adorning their outlets unconcerned national and social occasions. Competitor factor: Each association has a few contenders who give comparable products and administrations. KFC likewise have a few rivals in the sustenance advertise. In spite of the fact that KFC get to a novel place in the market in view of its mystery formula and brand name, it confronts an extreme rivalry by other nourishment brands. Those brands might not have an indistinguishable acknowledgment and taste from KFC, yet they pull in a decent number of clients in light of their low cost. The principle contenders of KFC are BFC, CFC, DFC, FFC, et cetera. Some different organizations like NFC and RFC are likewise required in this opposition. In the Metro Shopping Mall, there is likewise a KFC (King Fried Chicken). A few people consider it as genuine KFC. These fast food organizations furnish clients with comparable sorts of browned chicken for low cost. The chicken might be distinctive in taste yet they utilize a similar recipe to make their fries fresh as KFC does. Accordingly, they get to be effecti ve in drawing in clients. In addition, as these organizations give broiled chicken to low value, they get countless. In KFC, the least cost for fried chicken is more than a similar item at BFC. So white-collar class individuals of the nation inclines towards BFC from KFC. Moreover, an enormous number of understudies, who cherish fricasseed chicken, are not ready to spend a considerable measure of cash, as their pocket cash is constrained. They are customary clients of neighborhood nourishment marks as they can manage the cost of KFC visit sporadically (Tabassum and Rahman 2012). Entry Mode The process of new market penetrations is a risky business the risk of failure looming above the head always. In a firms expansion strategy, the best mode of entry in a foreign market would come as an importance choice to make, thus making it a major concern. Understanding KFCs internal business environment and Bangladeshs overall market environment the franchise mode of entry has been decided upon. The new outlet would be set up in Chittagong, as it is an unexplored market, and after Dhaka has the most number of people living. The franchise mode has been chosen as in that way Yum! Restaurants, the subsidiary owner of KFC, would be able to implement more control over the franchisees (Enz, Canina and Palacios-Marques 2013). They can also acquire a fixed amount and royalty as per the sales condition. The franchise outlets would follow Yums requirement and quality (Hoffman, Munemo and Watson 2016). Also franchising has low financial risk, with cost cutting in the assessment of market potential (Burton and Cross 2015). It would also assist in avoiding tariffs and limitations on foreign investments. Other modes of entry were not chosen as licensing would have the possibility of creating competitors in future, direct investment would increase the cost for KFC. As KFC is in itself a well-established brand name, there is no need for a joint venture, and as there is no need to manufacture the products in huge amounts the contract-manufacturing mode would also be of no use. References Burton, F. and Cross, A.R., 2015. A Reappraisal of Franchising Across National Boundaries in Foreign Market Entry Mode Analysis. InProceedings of the 1993 Academy of Marketing Science (AMS) Annual Conference(pp. 638-642). Springer International Publishing. Enz, C.A., Canina, L. and Palacios-Marques, D., 2013. The relationship between new venture entry mode and firm performance.International Entrepreneurship and Management Journal,9(2), pp.129-145. Hoffman, R.C., Munemo, J. and Watson, S., 2016. International Franchise Expansion: The Role of Institutions and Transaction Costs.Journal of International Management,22(2), pp.101-114. Marcucci, P.N., 2014. Jobs, gender and small enterprises in Africa and Asia: Lessons drawn from Bangladesh, the Philippines, Tunisia and Zimbabwe. Siddique, A., Selvanathan, E.A. and Selvanathan, S., 2012. Remittances and economic growth: empirical evidence from Bangladesh, India and Sri Lanka.Journal of development studies,48(8), pp.1045-1062. Tabassum, A. and Rahman, T., 2012. Differences in consumer attitude towards selective fast food restaurants in Bangladesh: An implication of multiattribute attitude model.World Review of Business Research,2(3), pp.12-27.