WHY GO GLOBAL?PROACTIVE REASONS

1. Increased profits

2. Unique goods or services

3. Technological advantage

4. Exclusive market information

5. Owner-manager desire

6. Economies of scale

WHY GO GLOBAL?

REACTIVE REASONS

1. Competitive pressures2. Declining domestic demand3. Overcapacity4. Proximity to customers5. Counterattack foreign competition

GLOBAL STRATEGIES

A. EXPORT STRATEGIES

B. CONTRACTUAL STRATEGIES

C. INVESTMENT STRATEGIES

EXPORT STRATEGIES

1. INDIRECT

2. DIRECT AGENT / DISTRIBUTOR

3. DIRECT BRANCH / SUBSIDIARY

CONTRACTUAL STRATEGIES• LICENSING

•FRANCHISING

•TECHNICAL AGREEMENTS

•SERVICE CONTRACTS

•MANAGEMENT CONTRACTS

•CONSTRUCTION / TURNKEY CONTRACTS

•CONTRACT MANUFACTURE

•COUNTERTRADE AGREEMENTS

INVESTMENT STRATEGIES1. SOLE VENTURE

(a) NEW ESTABLISHMENT

(b)ACQUISITION

2. JOINT VENTURE

(a) NEW ESTABLISHMENT

(b)ACQUISITION

Global Franchise ExplosionIncreased disposable incomeRising educational levelsUniversal cultural trendsMore women entering workforceSmaller families with more incomesEnthusiasm of younger generationsDemand for quality & service

Why Franchise?More rapid expansion at lower capital costMotivated owner/operatorsEconomies of scale and operating efficienciesRevenueLocationFlexibility

Barriers to Global FranchisingCulture, Culture, Culture!

Location, Location, Location!Intellectual Property ProtectionPolitical/Legal FrameworkAvailability of Raw MaterialsAvailability of Skilled ManagersEducation and TrainingQuality ControlMarketing Strategy