Quite naturally, franchisors that have already done well in their own country would be looking to expand overseas. So what are some basic questions that they need to ask themselves? Asiawide Franchise Consultants CEO Albert Kong explains: At Asiawide Franchise Consultants, we constantly urge our clients to go back to basics. This is important because even very big, established brands can make (and have made) mistakes when they expand successfully overseas and later realise their home ground has become unstable due to various outside and internal factors.
The world is definitely flat (whether you believe Thomas Friedman or not). There is no more excuse not to deliver better services and products.
Culturally, thanks to the internet, cheaper travels (with budget airlines aggressively competing with the bigger players), and other media, cultural gaps are narrowing, and it is no longer the ‘big company’ beating the ‘small’ but the ‘fleet-footed’ winning over the ‘laggards’.
The caveat here is: know precisely why, where, when and how—do not expand overseas due to a whim.
Why go overseas?
The following questions will help the franchisor to go through some soul-searching:
- Is your home market saturated?
- If there is still a lot of potential domestically, does it not make more sense to focus on the local market first?
- Is your business very solid in your own country?
- If your own business is wobbly, or you have a lot of weak areas not addressed yet, can you afford to spend time and money going overseas to explore new opportunities?
- Do you have the resources to manage the overseas business?
- Do you have a trusted team of well-trained personnel who can readily adapt to foreign culture, and is effective in ensuring that the foreign franchisees follow the established operation procedures faithfully, etc.
- Are there real opportunities overseas?
- Have you done a pre-entry study on the market/s?
- Who are the competitors, what strategies are they employing and can you calve out a portion of the market for your own brand?