International franchising is an important mode of entry for domestic economic that the purpose to get a share markets in globalized. It also for the benefit to stakeholders to gain profit by using the well-known franchising brand such as McDonald, Kentucky Fried Chicken (KFC), Jollibee, Mark and Spencer and etc. In stakeholders model state that how they can handle and studies to adapt other countries culture can help us to do the same thing for making the market segmentation. Franchising has become a one of the big ways in the globalization of product or service businesses. Other than that, international retailing has become an important feature of global distribution systems. This has been brought about through knowing the socio-economic pattern, favourable political, cultural environment and change the product or services based on their economic. This research journal has contributed to the globalization of retail franchising in emerging market.
In the retail franchising sector, it shows that United Kingdom and U.S was started to focus in the franchising studies over three decades. The retail franchising becomes one of the big growths for their economy follow by United Kingdom as well.
In every countries had a same economy that every business revenue will be saturated when it come to the breakeven point. The figure 1 show the example went the breakeven point occurs.
In economics & business, specifically cost accounting, the break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has "broken even". A profit or a loss has not been made, although opportunity costs have been "paid", and capital has received the risk-adjusted, expected return. In short, all costs that need to be paid are paid by the firm but the profit is equal to 0.
It was happened in the United States, Canada and parts of Western Europe had reached their domestic market saturation. Emerging market show that based on the past researcher, it made a result that the market can grow back and had a potential for a long-term growth to business and the impact for the stakeholders and shareholders.
Emerging market is the most potential faster growing for the investor. Furthermore, the experts also support the emerging market had big an opportunities but still they will face high risk. The recent acceleration of franchising in emerging market was occur when the expert make a researcher that the opportunities to avoid the break-even point and open the new target market globally based on expending economy development. It can assist the retail franchising to earn profit for the future investment.
When the business start to involved globally such franchising, it will appear the risk and challenges that the franchisor need to faced such as who will be monitoring, to find the resource scarcity and to make risk reduction. It because the difference geographical and cultural distance that take high cost to monitoring all the operating management. So they use the domestic stakeholders model highlights.
The new problem that their faces were the behaviour systems work to create value had been ignored because they cited the lack of franchising case studies. Overall not only the big franchises started to involved in emerging market but also all the franchisors that they can expansion their business.
There is two theories research stream of international franchising. For the first one is focuses on environmental, and the second focuses on organizational capabilities of the franchisor. The past researchers give the result that all franchisor need to find new market abroad to avoid the saturated in domestic market. We need to research the new target market for the future possible scene.
Characteristics of Emerging Markets
* Level of Economic Development
For the level economic development they are measured with the gross domestic...
Please join StudyMode to read the full document