Managing Global Markets: Yoshinoya

Managing Global grocerys Yoshinoya global Brand Recognition Yoshinoya is oneness of lacquers magnanimousst eating house orbit companies and a worldwide brand with over 1400 locations through verboten(p) the world including 99 in USA. It is known for its fond service and the identity card is plated on fresh ingredients served in a variety of rice troughs including its original recipe Beef Bowl that started it entirely in 1899 opening its first store in Tokyo lacquer.Scope of Expansion In 2006, Yoshinoya do franchising opportunities available to U.S. entrepreneurs.Service Known for its quick service. It is one of its key strengths and tries to maintain it in only of its outlets and franchises.Quality Yoshinoyas commitment to quality has never wavered since opening in Tokyos Nihonbashi District in 1899, even stopping sales of its common shout out bowls in 2003 when a exile on Ameri flush toilet beef went into result in Japan. Beef bowls were off the Yoshinoya circ uit card for two and half social classs, until the import veto on American beef was ariseed, and company officials say the Yoshinoya decisiveness reflects the commitment to maintain the best quality in both service and crossway. Its beef bowl recipe calls for American beef, and thats all Yoshinoya has served for nearly eleven decades.Professional Advertising Campaigns Yoshinoya is known for its advertising campaigns and helps to advertise for the franchisees also. hot Traning Yoshinoya has developed a stringent training regimen for all Yoshinoya employees, hence franchisees can enjoy having a courteous, well-trained staff from the very first day, and maintain the same level of high quality and service crosswise the arrange.CompetencyYoshinoyas major expansion plans are for Chinaand to open as many as 500 restaurants thither by 2010, as part of its joint proceed with Hong Kongs Hop Hing Food Group. Thither are already 99 restaurants operating in the USA and many to a greater extent to come.Diversification StrategyThe company began expanding its epitome of restaurant formats, starting with the 1996 acquisition of Commoco Food Company, later renamed as Peter Pan Comoco, operator of the Hitokuchi Chaya scorched good chain. In 1999, the company acquired struggling Kyotara Corp. and its chains of takeout sushi and sea victuals restaurants. The company acquired the Chinese nutrient chain Shanghai Express in 2002, then added the Hanamaru noodle restaurant group in 2004.The companys another(prenominal) restaurant formats include the Kyotaru takeout sushi chain Shanghai Express, a Chinese-foods concept Hitokuchi Chaya, which sells fresh-baked taiyaki cakes and takoyaki dumplings and the curry shop bathroom Pot. Listed on the Tokyo Stock Exchanges First Section, Yoshinoya DC is led by chairman Shuji Abe.Yet gyudon remained the companys lens nucleus recipe. Into the middle of the first decade of the 2000s, Yoshinoya stepped up international expansion of its flagship chain. The company entered Singapore in 1997, followed by the Philippines in 2001. By 2002, the company had launched a second mainland China partnership, tar obtaining specifically the Shanghai market. In that year Yoshinoya also opened its first restaurant outside of the U.S. West Coast, targeting the New York City market, and boosting its number of restaurants in that market past 100. This was followed by the creation of a new subsidiary, Yoshinoya America, to oversee growth of its U.S. operations. Similarly, the company launched a subsidiary in Australia, which opened its first restaurant in 2004, followed by the launch of operations in Malaysia later the same year. Mean succession, the companys Beijing-based joint suppose announced its own plans to expand its restaurant chain to as many as 500 restaurants by 2010.These efforts enabled Yoshinoya to glide by to post strong revenue gains through 2005. Nonetheless, the companys clearableness suffered as the U.S. beef b an entered its third year. At at know, however, the Nipponese organisation announced its decision to lift much of the ban. This allowed the company to launch its first limited sales of its beef bowl by September. while supply shortages continued to hamper the company, it nonetheless was able to resume wider gyudon sales by December 2006. The effect on the companys revenues were dramatic by the beginning of 2007, the company posted revenue gains of to a greater extent than 119 percent. Yoshinoya DC had become one of Japans largest and virtually diversified and restaurant groups, building its empire on a recipe that had been a Japanese favorite for more than 100 geezerhood.AgilityYoshinoya was hit hard, however, by the developing crisis in the global beef industry. The appearance of the first case of so-called mad s premeditation disease in the make up in States, which was becoming nonorious for the suspect nature of its sanitary conditions, prompted the Japanese politi cal sympathies to enact a ban on all U.S. beef imports in 2003. Remembering its last ill-fated attempt to alter the ingredients of its famed beef bowl, Yoshinoya adopted an extreme response, announcing that it would simply end sales of its flagship dish until imports resumed. In place of the beef bowl, Yoshinoya rushed to develop new recipes, including yellow-bellied- and pork-based bowls.WeaknessesGlobal competition with other firm-food chain of restaurantsOther competitive fast food chains such as KFC , Mc Donalds, Subway, Burger King have many restaurants world-wide. Mc Donalds has the largest Market share in the fast food industry.International Marketing StrategyThe international marketing of Yoshinoya* and its wander privations to improve for its survival.. With the growing numbers competitors branches worldwide, Yoshinoya needs to further expand its international market operations. In terms of competition, one great and possible strategy to do is a possible merger, joint punts or strategic alliances because by doing this kind of strategy, it volition lessen the competition in the market. It should look at localizing its menu and offer discounts and sales. IT should advertise to bring in more franchises to expand further.Keeping pace with changing consumer preferencesAs a natural process of reaction in the product marketing, the dynamic and diverse consumer preferences and behaviour is the most predicted trend that provide affect the marketing strategy. Due to different geographical location, cultural beliefs and practices, lifestyle, health status, and individual(prenominal) indifferences, various segments of the current marketing strategy are subject to possible changes. Yoshinoya, should look at expanding or altering its menu based on the locations and the consumers prefermnces. Also, it should concentrate on low calorie foods as more and more fast food restaurants causes concerns of obesity and health issues. Eating places were forced to sta ke out a strong identity for themselves and to pay closer attention to consumers, who were becoming increasingly demandingDependence on American beef for its signature Beef BowlIn late 2001, a domestic mad cow incident critically damaged beef bowl sales. In late 2003, Japan suspended imports of American beef overdue to a BSE incident in Washington, cutting off Yoshinoyas main extension of short plate (fatty beef) that is the main component of its beef bowl. This forced Yoshinoya to terminate gyudon sales in Japan (the first time in its history) on February 11, 2004. News of the removal of this item from Yoshinoyas menu caused its fans and non-fans athe likes of to waiting line in massive lines at Yoshinoya restaurants all around Japan to taste what might be their last beef bowl for a long time. Yoshinoya then switched to selling solelyadon (pork don) instead of beef. only, Yoshinoya restaurants in America continue to sell the beef bowl using American short plate, and restaurants in Japan sold a gy yakiniku don (Yakiniku-style beef bowl).In December 2005, Japan agreed to remove the restriction on importing US beef. A letter to customers was then put up in restaurants promising that the beef bowl would return in a couple months or so. However, in January imports stopped again because inspectors found ban cattle parts in a veal shipment from the U.S. In June 2006, however, Japan lifted the ban on imports, and on July 31, 2006, Yoshinoya reposted the letter promising to bring back the beef bowl in virtually two months.External Factors for Yoshinoyas planned instaurationEthnic food is seen as the basis for innovation in the food industry. Different cuisines and products are emerging on a continual basis, as consumers become more knowledgeable about eating habits in other parts of the world as well as becoming acquainted with foreign cuisines through foreign travel.Apart from formerly being consumed mostly in the evening, social food is now being consumed throughout the day, for example as a lunchtime snack. The repertoire of ethnic food is forecast to widen even further, resulting in continuous increases in salesChinese food is expected to remain the largest segment within the market for East Asian cuisine, since it has a authoritative customer base and is quite popular with large sections of population. However apart from Japanese cuisine, growth is expected to be strongest for the Thai and Indian segments, which are becoming increasingly popular.Japanese became a trend cuisine in the mid 1990s with several sushi outlets opening up in major cities. German retail right away picked up on this trend and started offering Japanese sushi in its chilled cabinets at first in large cities only and then successfully in more rural areas. Today, in rural areas, sushi tends to be contain very positively.Japanese food has only recently, within the last five to ten years become popular but the range available is still relatively restricted. Yoshinoya provides healthier food when compared to other fast food joints like Mc donalds and KFC.Wagamama is non Japanese cuisine. In fact, there are no Wagamamas in Japan or China so Yoshinoya providing authentic Japanese food is an advantage.Changes within the population have at a time affected the development of the food sector. As the number of single households and working women has change magnitude, coupled with an aging population, German societys values have faux pased towards focusing more on the quality of life.Todays consumer is more widely travelled and open-minded towards new, exotic cuisines.Risk factorsIneffective risk management within partnership working whitethorn ensue to poor working relationships and drop of engagement,not realising benefits,community outcomes not achieved against agreed priorities,reputational damage,poor value for money and missed opportunities to secure convertible efficiencies gains and contribute towards sustainability targets.PEST EL analysisPolitical FactorsThe government in europium is supposed to be politically stable. In recent years, the Government has pursued policies aimed at qualification atomic number 63 more attractive to expendors, creating a have purlieu for foreign investment. It has low labour and transport costs and the introduction of the single market has eliminated transposition rate fluctuations and reduced overall transaction costs. European government is planning to lower corporate revenue which allow be extremely beneficial. . Denmark grimly needs skilled foreign workers, and will change laws to see them welcome. The rise of the newly formed centrist party New Alliance, offers the minority centre-right coalition government a stable partner.encourage entrepreneur and energy reforms, while rejigging the administrative structure of the municipalities. The addition of the conservatives to the coalition suggests a more active foreign policy, including stronger ties with America, but also a mediating role in the EUs strained relations with Russia.Less belt-tightening will boost the prudence, as will increasing integration into west European merchandise and supply chains. The government nurses the marketing and licensing of fast food restaurants which makes it important for every company to maintain good relations with the government and benefit from tax reductions.Ireland With the Green Party now in the coalition government, policy will shift slightly towards environmental issues, though the governments overall focus-keeping businesses competitive-wont change. Economic management will be more involved than during the boom years consumption cuts, for example, may now be required,creating stresses within the government.Economic factorsIn last few years there has been a financial crisis in the market. Cost of everything has increased due to fall in major investment banks. There have been inflationary pressures due to high energy prices and lack of credit. All this would amount to increase in price of supply chain and goods. The cost of food items has increased as there has been a food crisis. France and Germany have interrelated economies,so selling in both the markets would not yield great results. Yoshinoya import most of its raw material such as beef and potatoes due to local market cannot supply in abundant to meet the demand of its product they need to be aware of global supply and currency exchange. Since the pricing is above normal food pricing Yoshinoya consumers may find it hard to make the buyer agree to the price on offer. Moreover if the economy is bad and income percapita is affected, the demand of Yoshinoya product will certainly going down. Good economy generally means useable income is more and people can spend more on more expensive food . tender/CulturalNot many people can afford eating out all the time but with the fast food option providing affordable meals people have caught up with increased spending habits.But co nsumers always also look for value for money and demand quality in services and more conveniences that can differentiate one restaurant from another. There is not much difference amongst cultural and the purchase of products in a single country but for different countries cultural sensitiveness should be upheld. For example in India people (Hindu) do not take beef, Muslim countries do not take pork, German like beers, Finnish like fish type of food menu, Chinese like to associate food with something good (for example prosperity), Asian like rice and Americans eat in big-sized menu. So far Yoshinoya has shown good efforts in localization of its menu to suit local taste but it should invariably survey and learn about local culture to better understand and design the best product for themTechnologicalEuropean online meal solutions prospects by countryFor a fast food restaurant, technology does not give a very high impact on the company and it is not a significant macro environment v ariables. Computer ordering (till system) and using technology for production,supply and research reasons is a requirement.Technology implementation can make the management more effective and cost saving in the long term.Environmental factorsYoshinoya should invest more on the environment related issues. They should reduce their dependency on beef dishes as production of beef involves methane gasses coming from the cows ranch causing green house effect. Large scale woodlet affects the environment and loss of green forest opening for plantation activities. Vegetarian environmentalist criticizes the fast-food giant for cruelty to animals and slaughtering. phthisis of plastic is also an issue as millions of people are known to throw away encase which is hard to recycle. Our world is getting concern on environment issue and business operating here should not just care for profit, but careful usage of world resources for sustainable development and care for environment safety and healt h for our future generation.Legal factorsLegal requirements of a business owner should be to follow stipulated laws such as operating hours, business registration, tax requirement, labor and employment laws and quality environment certification (such as ISO) in which the outlet has been certified. The legal requirement is important because the offenders will be fined or have their business prohibited.b) Country ShortlistingThis part addresses why the country Uk was chosen from amongst the 27 other countries be to the EU.A 2008 study was conducted worldwide counting the number of fast food restaurants per person.The UK has claimed this title with Australia second and the joined States third. England alone peaked for 25% of all fast food. The majority of multinational corporations that are based outside of Europe but have a presence on the continent, establish their European operations in the UK. last making global integration vs global responsivenessmulti domestic strategy,the foo d industry has a weak need to integrate operations across countries because scale economies are highly off organise by transportational costs.In Russia,eating out is also becoming increasingly common. A burgeoning middle class is creating a solid customer base and is increasing demand for international foods, with the result that numerous restaurants and cafs are opening or expanding.In France With regardto business and investment, the climate cannot be considered to be very conducive due to lack of fiscal and investmentfreedom, and freedom from government intervention. Business taxes are also higher compared to other developedcountries which acts as a deterrent for investment.In 2004, Germanys share of the ethnic food retail market (by value) within Europe was relatively small (9.2% compared to the UKs 68.8%). Nevertheless, it was the third largest market, following the UK and France (who had 9.7%)In 2006, the Ethnic Food retail market in Europe was worth EUR 4.12 billion. The UK h as the largest and most developed market, with sales worth over EUR 2.34 billion. In fact, the UK, France and Germany together account for over 80% of total sales. It notes that countries like Spain and Ireland have much smaller markets, but that sales are on an upward spiralSo first establish about 5 stores in uk and 5 in germany check the performance over a year hope to gain from spillover effects where Media helps it to get noticed in nearby countries and the following year expand in markets like Denmark and Netherlands which are in the same region.So the plan suggests that the country selection is also region specific.Northern European countries like england and Denmark andWestern European countrie like Germany and NetherlandsEconomic stability based on GDPSpain has per capita GDP of UK is $ 34,619 (International Monetary Fund,2009).It is the third largest economy in Europe after Germany and France and the second largest after germany in terms of Purchasing Power Parity.Japanese in UkColindale in north London has Oriental City a shopping centre which has the highest gradation of Asian consumers.North West England, Manchester is town with largest population and Aberystwyth largest student town are locations for opening a store.When eating outside the dwelling house, Japanese expatriates in the Netherlands most commonly patronise Chinese restaurants (29% of meals eaten out) Japanese restaurants run a close second at 25%, Italian restaurants at 19%, and French restaurants at 10% (Cwiertka 2000, p. 17)Start with 10 stores with centralization,check performance and then shift to decentralization. The strategy for the first three years in Europe should be of Centralization and concentration in big country markets .Part 2a) Market Entry StrategiesWhy would Yoshinoya choose franchising?Yoshinoya wants to aggressively expand in the European market.The franchising model will help it expand its operations on a faster scale.Speed of entrySpeed of entry can be classif ied as Aggressive-broad front and aggressive-focused. Yoshinoya must have systematic and dynamic gamey plan using all of its resources.How will the franchise work?Joint venture will be 50-50. Yoshinoya has had nation wide franchising in the United States offering single franchise and territory arrangements. Having identified a franchisee, NewLook must determine aspects such as franchisee fee and initial investment required to get the venture on road. NewLook can follow the standard industry practice of charging between $30,000 $40,000 per location per year a standard followed by 70% of the franchisors. Additionally, the terms of franchising also need to lay down the amount of royal line that franchisee needs to pay (International enfranchisement Association, 2010). This figure is a percentage of franchisees gross monthly income and could be set at 4%.Risks of franchisingWithout having a local presence in Europe, this method results in a great loss of control and supervision over the franchise as the franchisor has no legal entity in Europe. However Wholly owned facilities, at the start would serve as anchors while they build relationships in the emcee country to jut out further entry through non-equity modes such as franchising and management service contracts (Bartlett Ghoshal, 2000). So it might prove difficult to build familiarity and relationships in the market, non-equity contractual forms are readily adopted to support the increasing degree of presence. Due to Yoshinoyas present financial condition franchising would be the best option but finding the right franchising partner would be the most important.Exit Strategies Franchisors that they needed to understand that their business would fail, and in fact all businesses are bound for failure. Daniel Hudson Burnham said Make no little plans they have no magic to stir mens blood. So plan. Plan to profit. Plan to nurture and build. And plan to exit.If Yoshinoya does not get its estimated profit or is i n loss, it can exit the market. It is not easy to exit the market as settlement franchised stores due to non performing would affect brand image and create stutor among other franchising partners.If a joint venture is established exiting market becomes an easy option as the share can be sold to the partner. motion of non profitable stores can be an option. Additionally, once the initial period of uncertainty is over and the payoff (for NewLook) from the venture is more or less stabilized, NewLook may find it advantageous to dissolve the partnership by every acquiring the franchisees interest in the venture or selling its own stake. The price for the transfer of possession interests between two parties should be set in the original contract. To determine the share price, both parties could accept the appraisal of an independent evaluator (Chi, Tailan McGuire, Donald J, 1996).b)Functional strategies, including product, marketing, and operations decisions.The marketing strategy invil oves 4ps product,price,place and promotion.As yoshinoya is not yet established in the European market they could use Penetrative pricing policy to expand the menu by adding chicken based side orders,sushi,soups and salads.To cut costs,decreasing price should not be an option instead they should reduce the amount of money of products.Table service is a good idea.On the other hand having a limited menu, rapid table derangement and employing temporary staff on minimum wage so that pension and health benefits dont have dolled out is a way of cutting costs too.A marketing strategy involves using brand call and other marketing elements.Yoshinoya must look at protecting brand name and patent.In a Franchise system the franchisor does the RD and Marketing while Franchisee does the Production and sales and service.c) Yoshinoyas Organizational StructureOrganizational structure shows how management decisions would be taken and the flow. VP (HR) will be reporting to CEO and will be accountabl e to all HR related operations. Senior VP (marketing and sales) will be reporting to CEO and will be accountable for marketing and sales. CFO will be reporting to the CEO and will be accountable for all financial operations. VP (Operation development) will be reporting to COO and will be in charge for operations and development. Then VP (Investor relation) will be reporting to COO and will be responsible for relations with the investors. VP (public relations) will be responsible for public relations. Special task force would be formed to work in teams to take care for any new stores to be opened or major structural changes to be made in functioning of any stores.Although the organisational structure outlines who reports to whom within the MNE, it does not indicate where decsisions are made within the framework.companies must determine where decisions will be made.The higher the level within the organisation at which decisions are made, the more they are considered to be centralised the lower the level,the more they are decentralized.whether decision making should be centralized or decentralized can be addressed from the stand point of both the company as a whole or some part of it,such as particular subsidary operation.d)Strategic control systemConclusionIt is observed from various analysis made above like PESTLE and SWOT, that Yoshinoya is a brand which needs to expand internationally in order to increase its revenue and to compete with other big brands.Referenceshttp//www.swot-pest-porter.co.ukHollensen, S (2003) Global Marketing A Decision-Oriented Approach. 3rd ed. Pearson EducationWall, S Rees, B (2004) International Business. FT Prentice Hall.LEE, K CARTER, S (2005) Global Marketing Management. Oxford OUPMellenius, H 2007 Market Orientation as a Branding Strategy. 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