International Business and Globalization

Published: 2019-05-15 19:22:44
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Gazebo is an Indian restaurant that is found in UAE. The restaurant serves the Middle East market and more specifically, it serves the UAE market. The market is attractive because of the large number of potential customers traveling to the country to engage in trade. With the high rate of globalization, the restaurant should expand in the international market so that it is more diversified to offer its services to the market. This will reduce the risks of operation as well as increase the revenue generation. The aim of this paper is to convince the manager of the restaurant to expand the service provision in the international market (Gazebo, n.d). The paper analyzes one of the potential countries where the restaurant should operate, the opportunities in the international market as well as the entry strategies that are best for the company. This will then help make a recommendation on the decision that the company should make.

Company backgroundGazebo restaurant is mainly an Indian restaurant that targets the Indians in both UAE. It prepares food that is mostly liked by the Indians and also avails food to the other groups in the society. From the menu, one may realize that many of the items are named using the Indian names. However, the products are common in various societies, and they include milk, vegetables, cereals and fruit juices. Most important, one may find organic foods that are very healthy for the people.

Value chainThe value chain of an organization explains how it can create value for its products so as to ensure that the customers are satisfied. It is a combination of various processes, and activities that aim at ensuring that the customers are satisfied.

The suppliers are well organized, and trade deals are made in such a way that they are satisfied. This means that Gazebo ensures that there are no complaints by suppliers so that they can supply the required inputs at the right time. An important part of inputs is the employees who supply their important services to the company. The employees are well trained for the various jobs in the company. This ensures that assigned duties are performed without complains. The employees and the management are innovative in such a way that they develop new ideas that improve the service delivery of their organization. Technology is a major input in the company. Its major activities are characterized by the application of technology. This starts with the marketing activities where the company website gives an attractive view of the company premises. The foods that are available and the other important information about the company are available on the website. Additionally, the use of social media is common and aims at ensuring that more customers are reached.

The processes in Gazebo restaurant involve receiving orders from the customers, preparing the orders and delivering the orders to the customers. The customers may be within the restaurant, or one may be required to deliver the orders (Gazebo, n.d). The orders can be received through phone calls, or through the company website. The other important process involves processing of bookings for the customers that wish to spend time at the restaurant. Various customers have to be handled to ensure that the customers are satisfied.

It is obvious that a major output for the company is quality food products to the customers. However, a major target output is the satisfied customers who are more likely to come for a repeat purchase. This is possible if the customers enjoy the environment and the meal at Gazebo restaurant. To achieve this, the restaurant provides a relaxing environment for the customers. This is possible through having in place spacious restaurant that has cool music and other benefits such as free WI-FI. The following table summarizes the value chain analysis of Gazebo restaurant.

 

Country and Market AnalysisThere are many potential countries that Gazebo can enter provide its products and services. First, the country can enter any of the Middle East countries including Qatar and Saudi Arabia. These countries are fast developing and can provide a good market for the restaurant.

The restaurant can also enter the US market where there are a significant Indian population and other people that like the Indian culture and more specific, the food that they cook. This is also a potential market that the restaurant can do well. The challenge is that there is already much competition in the industry, and the restaurant would face challenges establishing in the country.

On the other hand, the restaurant can enter the UK market where there are opportunities for the restaurants. In this case, the restaurant may face challenges because of the difference in culture of the people in UK. There are less Indians in UK who would prefer the food that the restaurant avails. The competition also remains high in UK. However, it is recommendable that the restaurant invests in Egypt (Firestone, 2010). There are many reasons why this decision in the best.

First, Egypt has just opened up its economy, and foreign investments are increasing each day. This means that it would be more advantageous for the restaurant to offer its services and establish itself before other organizations enter the same market.

Another factor is that there are many attraction sites in Egypt and many tourists visit the country. It would be profitable to serve such tourist. As they book the restaurant and order meals, the company can make much more from the business (Firestone, 2010).

In Egypt, there exist many Indians who would be attracted to dine in an Indian restaurant. There are Indian natives in the country, as well as Indians who migrated to the country together with their families to engage in business. These would be great customers.

The competition in Egypt has not increased to great heights. This means that Gazebo restaurant is not likely to face challenges as it enters the market.

Egypt is a North African country that is fast growing. A group of middle and high-income class has emerged, and these are the potential customers for Gazebo restaurant. Additionally, the youths in the country are increasing in addition to the working class and those in colleges. These people need a cool environment to relax. Gazebo can provide this.

The fact that farming is done along banks of river Nile means that Gazebo will not face challenges in the search for raw materials. It is possible to cook the favorite dishes for the locals because there are major raw materials in the country.

The development of towns means that the expansion of the restaurants in the country is easy. This can be an effective way of reaching more customers and ensuring that more revenues are generated from the venture.

Based on the analysis, Egypt is the best county to invest in. There are necessary resources such as labor, raw materials as well as customers that Gazebo need. With the cultural experience in UAE, Gazebo can easily enter the Egyptian market and offer products and services to the potential customers.

Cost reduction is an important strategy because it means that more customers can afford Gazebo products. This will ensure that more customers buy the products hence revenues increase. This is as long as the prices charged are reduced owing to the low production costs. Additionally, the profit margin is high if the prices are not lowered, and this also means more profits for the company.

Local responsiveness is another crucial factor to consider in Gazebo restaurant. It is important to realize that the needs of the Egyptians may differ from those of Emirates. This means that research has to be done to ensure that what is delivered to the customers is what they want.

In order to compete, various strategies can be used. The choice of the best strategy makes it easy to successfully enter and remain in the market. Global standardization, localization, transnational and international strategies can be employed (Daidj, 2015). Global standardization involves reduction of costs in the restaurant such that it becomes possible to serve more people in the society. Since Gazebo targets the high-income society, there may be no need to use this strategy.

Localization requires that Gazebo responds to produce the products that the customers prefer. This is a good idea in that it will increase the market served. Transnational is the best strategy that can be used where costs are reduced and products are designed to meet the needs of the locals. Reducing costs does not necessarily mean charging lower prices, and this means that Gazebo can generate good revenues from the activities (Daidj, 2015). International strategy means producing what Gazebo produces for UAE population and availing it to the Egyptians. This is not the best strategy. Based on the analysis, transnational strategy becomes the best for Gazebo restaurant.

Entry strategiesThere are various possible entry strategies. The first involve exporting of products from Gazebo to Egypt. This is not viable because food gets damaged within a short time. Very few people would order food away from their countries since this would be expensive. Exporting is therefore not a reasonable strategy for Gazebo.

The turnkey project is a good idea because it can involve establishing a restaurant for a foreigner to manage. The foreigner in Egypt would be required to pay the costs of setting up the business. This is not recommended because Gazebo may not benefit from the venture in the best way. The name of the restaurant can also be tarnished in case of poor management (Doole, 2008).

Licensing would involve giving a local investor the rights to run a business using copyrights and trade mark of Gazebo for a specified period and royalties can be received in return. This is a good arrangement because the costs of investment would be reduced, and any resistant to entry would be suppressed.

Franchising is another form of licensing but, in this case, the investor is more regulated. It is a good idea because it is likely to result to running of the franchise in a way that Gazebo restaurant likes. Costs of investments and reduced resistance in the new market will be of benefit for the company (Doole, 2008).

The joint venture is a better option, and it involves working with an Egyptian firm to start the business. Less resistance can be saved and the costs of the new business are minimized. There would be a need to solve any conflicts between owners and share of profits is also another disadvantage.

The recommendation is that a fully owned subsidiary is formed. This would require sending to managers from UAE to Egypt to run the new venture with locally employed individuals. The challenge is that resistance to entry can be faced, and it is also costly and ri...

sheldon

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