Case Study: Nina Lopez and Matt O’Rourke have been trying to raise capital to expand their growing chain of cupcake shops, Treasure Cup. They make a full range of traditional cupcakes, but they found immediate success with their signature cupcakes, those that have a range of fillings, from ice cream to candy to exotic fruits. They opened their first store 10 years ago and quickly expanded throughout their state. They now own 15 stores in four states in the Northeast and are looking toward further expansion. Initially, Nina and Matt were thinking they would try to branch out nationally, but with the swift success they’ve had, and the fact that they both were born in countries outside of the United States, they decided to set their sights even bigger and expand overseas. Their Treasure Cups have broad appeal, and their fillings can be easily tailored to local taste. Nina and Matt therefore concluded not to limit themselves by looking at just the U.S. market. They had already proven that they could scale; now was the time to capitalize on their experience and success. The plan is now to launch Treasure Cup as a global company, serving clients in multiple countries. However, some potential investors have expressed doubts about their ability to operate globally before the company has built out beyond one region in the United States. One investor asked Matt and Nina whether they really were prepared to respond to the needs of business clients located hundreds or thousands of miles away. Question: Which entry mode strategy—franchising or wholly owned stores—should they pursue to help Treasure Cup succeed as an international brand?
Case Study: Nina Lopez and Matt O’Rourke have been trying to raise capital to expand their growing chain of cupcake shops, Treasure Cup. They make a full range of traditional cupcakes, but they found immediate success with their signature cupcakes, those that have a range of fillings, from ice cream to candy to exotic fruits. They opened their first store 10 years ago and quickly expanded throughout their state. They now own 15 stores in four states in the Northeast and are looking toward further expansion.
Initially, Nina and Matt were thinking they would try to branch out nationally, but with the swift success they’ve had, and the fact that they both were born in countries outside of the United States, they decided to set their sights even bigger and expand overseas. Their Treasure Cups have broad appeal, and their fillings can be easily tailored to local taste. Nina and Matt therefore concluded not to limit themselves by looking at just the U.S. market. They had already proven that they could scale; now was the time to capitalize on their experience and success.
The plan is now to launch Treasure Cup as a global company, serving clients in multiple countries. However, some potential investors have expressed doubts about their ability to operate globally before the company has built out beyond one region in the United States. One investor asked Matt and Nina whether they really were prepared to respond to the needs of business clients located hundreds or thousands of miles away.
Question: Which entry mode strategy—franchising or wholly owned stores—should they pursue to help Treasure Cup succeed as an international brand?
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