International Franchising

7/30/2019 International Franchising

1/15

Introduction to international business

International business is not newbusinesses and nations have conducted trade across

national boundaries for centuries.

Lured by the prospects of large markets and/or sources of raw materials, businesses havetraded with other parts of the world.

But as we will see later global business and global industry is different.

Overseas trade and Ansoffs matrix

Thinking about international business in the context of Ansoffs matrix:

Entry into overseas markets represents market development. Existing products are sold in new markets. It is appealing because:

- market penetration is difficult in saturated markets.

- product development is costly.- diversification is risky

Why enter overseas markets?

The reasons for entering overseas markets can be categorised into push and pull factors:

Push factors

Saturation in domestic markets Economic difficulty in domestic markets Near the end of the product life cycle at home Excess capacity Risk diversification


2/15

Pull factors

The attraction of overseas markets Increase sales Enjoy greater economies of scale Extend the product life cycle Exploit a competitive advantage Personal ambition

Factors in the choice of which overseas market(s) to enter:

Size of the market (population, income) Economic factors (state of the economy) Cultural linguistic factors (e.g. preference for countries with similar cultural

background)

Political stability (there is usually a preference for stable areas) Technological factors (these affect demand and the ease of trading)

Constraints and difficulties in entering overseas markets:

Resources Time Market uncertainty Marketing costs Cultural differences Linguistic differences Trade barriers Regulations and administrative procedures. Political uncertainties Exchange rates (transactions costs & risks) Problems of financing Working capital problems Cost of insurance Distribution networks

Exporting is only one method of doing business internationally

We normally think of overseas trade in terms of exporting and importing goods andservices This involves transporting goods and selling them across national boundaries. Direct exporting implies that the domestic firm is actively involved in selling the

goods abroad

Indirect exporting means that the marketing of goods is delegated to export agents andthe UK manufacturer concentrates on production

But exporting involving the movement of goods is only one method of engaging ininternational business

Other methods of market entry

Overseas product an/or assembly (producing goods abroad)


3/15

International alliances and joint ventures (working with foreign companies) International M&A (mergers and acquisitions across frontiers) International franchising and licensing allowing foreign based firms to produce,

market and distribute goods in specified areas abroad)

About us

Being Bata affiliated means to be part of a group leader in the shoe retail market with more

than 5.000 stores all over the world. Managerial risks are reduced to the minimum, thanks to

the experience accrued as a franchisor and retailer with formulas that guarantee profitability

and competitive advantage. Bata gives the confidence of a big partner on which you can

always count on.

Our mission

Enter the new foreign markets through the Bata Retail system formula, to catch all theopportunities coming from the knowledge of the local markets, through the selection of

reliable partners with a long term vision.
http://www.bata.it/http://www.bata.it/


4/15

Our strategy

Analyze the local markets, the socioeconomic field (location, competitors, costsstructure, average income and spending power) to point out strengths and weaknesses.

Share with the new partner our know-how in the shoe business. Utilize all synergies with the Italy Retail structure. Give the maximum attention to the different local needs (fashion trends, climate,

seasonal trends, specific needs, usages and customs).


5/15

Our goal

Expand on a international level the Bata brand exporting the Bata Retail system though the

strong and well defined three concepts: BATA City Store, BATA Metro Store and BATA

shop in shop.


6/15

Our network

Albania

Austria

Bosnia & Herzegovina

BulgariaCyprus

Croatia

Egypt

Estonia

Finland

Georgia

Greece

Ireland

Kosovo

Latvia

Lithuania

Macedonia

Malta

Montenegro

Romania

Russia

SerbiaSlovenia

Sweden

Turkey

Ukraine

Hungary

United Arab Emirates

Saudi Arabia

Kuwait

QatarBahrain

Oman

Our Ideal Partner

Company or individual person with managerial spirit and willingness to develop a long term

business plan.

Experiences in retail business (preference for companies whom managedifferent fashion Brands);

Availability of premises located inside historical centre, malls and attractive streets ofcities and municipalities with over 100.000 town residents, giving priority to capital

cities.

Availability of premises to open stores with a selling area of 100-150 sq.m for BataCity (boutique) and 300-500 sq. m for Bata Metro Stores (large format).

Staff strongly customer oriented, ready to work into an international context. Solid Financial situation to manage the business healthily.


7/15

General conditions

Three years contract renewable. No opening fee. Full assistance of the technical department for the project of the stores. No charges for technical drawings. Investment for furniture, tiles, lighting and accessories:

o City Store (avg. 110 sq. m. of selling area): 450 Euro per sq. m.o Metro Store (avg. 350 sq. m. of selling area): 350 Euro per sq. m.o Chance to produce the store locally starting from the second opening

Investment opening stocko City Store: 60.000/80.000 Euroo Metro Store: 120.000/ 150.000 Euro

Facilities for new openings:o division of payment for opening stock into installments;o division of payment for furniture into installments.

Free in- store advertising material. Support on local advertising actions. Guarantees: to cover the goods purchased a bank guarantee or letter of credit is

required.

Royalty fees on the net turnover for the use of the trademark and know-how.


8/15

Operational information

Average Turnover per s.q.m.o City Store: 5.000/8.000 Euro per sq.m.o Metro Store: 3.000/5.000 Euro per sq.m.

Stock turn: 3 / 4 times per year. Store Personnel structure required:

o Store manager;o Deputy store manager;o Sale assistants defined according to the estimated turnover.

Franchisee Advertising Budget required: at least 2% of the total turnover.


9/15

Success factor

Commercial area rating, competitors analysis and forecast store income. Profitability and financial needs analysis. Periodically monitoring of cash flow. Best sellers re-supply. Weekly deliveries. Qualified support for the new opening, with sales area organization, warehouse and

visual merchandising.

Supervision, commercial and operational assistance for everyday operation.


10/15

Collection

Each Bata store offers personalized collection, to satisfy customers expectations through:

The presentation and selection of collections organized four times per year with thepossibility to have the latest trends with fast delivery date.

Preparation of the collections for the different local markets. Re-supply based on sales.


11/15

Training

To help Bata store operation, Compar organizes and offers:

Staff training on the job, in Italy for a period of 2 weeks. Periodical training courses on: product knowledge, retail sale techniques, visual

merchandising, general store operation rules.

Permanent advice on line for all aspects concerning the commercial andadministrative management.

Periodical visits of dedicated branch manager.


12/15

Store Concept

BATA CITY STORE CONCEPT DESCRIPTION

110/150 SQ.M Selling area 70%, Stock room 30% Boutique Store Full service Accurate visual merchandising


13/15

COLLECTION

Target Customer: Contemporary and Fashion Product Mix: Footwear (70%): man, woman Diversity (30%): leather jackets, handbags, belts and accessories.


14/15

BATA METRO STORE CONCEPT DESCRIPTION

300/500 sq.m Selling area 90%, Stock room 10% Family Store Assisted and self service Visual merchandising focused on the customer


15/15

COLLECTION

Target Customer: New-traditional, contemporary and fashion Product Mix: Footwear (80%): man, woman, kids and sport Diversity (20%): leather jackets, handbags, belts and accessories.

Documents

International Franchising