Answered: On the assumption that Mr. Francois is…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Q3(3). On the assumption that Mr. Francois is thinking about starting a branch in some foreign country, he will need advice on the types of strategies that could be adopted.

a. What are the best approaches to enter a foreign market?

b. What are two negative experiences or drawbacks in entering a foregin market?

c. Based on your response, would you advise Mr. Francois to enter a foreign market?

Transcribed Image Text:Strengths: Committed employees and management, Appropriate management style, Adequate financial and human resources, Wide variety of products, Broad market coverage, Good financial management, Brand name reputation, Excellent customer service skills, Same expertise in new Clearly, Mr. Francois was an astute businessman who was always thinking of the next move to grow the business. Hejoined the local Chamber of Commerce, continued to read widely about what was happening locally, regionally and intemationally, and made every effort to attend conferences and seminars which he thought would be beeneficial. He was always thinking sbout growth and expansion. John Francois Stores became a known business even to those persons who had never patronized the store. In the midst ofit all, Mr. Francois understood his corporate social responsibility and as such was respected highly by other businessman and members of the community and country. There were a number of proud moments for Mr. Francois and employees when he was awarded the Business Man of the Year Award on three (3) occasions s well s several other awards throughout the years of operations. He was recognized for his business acumen. The years flew by quickly. Mr. Francois participated in anumber of short courses in management which helped to build his confidence. By the third year of operations, Mr. Francois got an idea - "I could go to the various parts of Carnibar, observe the needs of citizens and meet them at their point of needs, and market my products."He packed his large Toyota panel van and along with his driver, he put his plan into action by going to different aress in Çamihar on Saturdays and Sundays. Mr. Francois was successful with this venture and discovered that retirees, housewives and other persons did not leave their homes frequently, but needed his products. He began to go into more villages and towns at lesst two (2) days per week in addition to Saturdays and Sundays. Within ten (10) years, Mr. Francois had set up branches at strategic locations in the west, north, south and central parts of Çamihar. He achieved this by accessing low-interest loans from an established Credit Union and his bankers. He utilized and invested some of his savings Although Mr. Francois had spread his wings and continued to operate a successful and profitable business, he never stopped pondering his next move. By 2015, the total staff had grown to one hundred (100) persons which included cashiers, information technology personnel, supervisors, customer service staff, cleaners, drivers and his five (5) children as managers with one at each branch. The children had been educated up to the undergraduate level and had a fairly good understanding of business processes. Mr. Francois was the Chaiman of the organization. venture management Weaknesses: Lack of research and development akills, Lack of understanding of strategic management and planning. In addition to the stores, Mr. Francois had invested in four (4) beach-front properties which were booked for at lesst 90% of the year. These properties were well kept and maintained. Much of Opportunities: Exploit new marlket segments, Move into new businesses, but how and what type: Expand into foreign markets, Acquire a profitable acquisition. the occupancy wa gained via word of mouth although a website was developed. Regional and intemational tourists s well as local citizens made repeat visits, which demonstrated that the service received was excellent. Mr. Francois was proud of his achievements. Threats: Incresse in competition, but where do we look, New foms of competition, Changes in customer preferences, Rising costs of products and labour, Changes in demographic factors, Changes in economic factors and down tum in the economy, Slow growth in the market. Mr. Francois began to think about succession for his business and the future for his children who At the start of 2020, Mr. Francois and his family began to follow the news with respect to the desdly COVID-19 virus. Mr. Francois pondered "I wonder howthispandemic willaffect our business. We sell mainly needs andsome wants, so we could exxpect our cusomers to continue to patronize us. However, we cannat dismisswhat the ukimate effects may be on the business" The business has been successful, but Mr. Francois and his family has recognized that things are changing in the environment and could have negative outcomes on the business. At the January 2020 monthly mesting, it was decided that the company should seak the services of areputable and trusted person who can advise and sssist the organization with getting adear understanding of what strategic management and planning entails. Other matters discussed which the family sgreed to pursue included embarking on a training initiative which would include staffat all levels as well as to create an awareness of the environmental factors that can affect the company. Mr. Francois and his family decided to hire you as a trust-worthy relative who he considered s3 intelligent and with an understanding of business strategies. The meeting ended with Mr. Francois thinking aloud that they should all read about what it means to be innovative. He indicated that at the next meeting, they will all come with their idess of a plan that is different to what they are doing now and which can contribute to continued success. He was not sure what type of plan that would be. He has been following keenly the possible impact and negative fallout that the company could experience because of the COVID-19 virus. However, as an astute businessman, Mr. Francois realized that there are capabilities within his organization had bean supporting him throughout the years. In the midst of the initiatives undertaken, and continued success, Mr. Francois was very cognizant that the world of business was wrought with dynamism and uncertainty and that he and his family needed to understand what and how further strategic moves could be undertaken. He had been reading and trying to kep up to date with what was happening in the world of business. He and his family did not have a full graap of the theoretical underpinnings to maneuver quickly out of any new challenges, and he understood very well that challenges can surface with expansion. to accomplish his ventures. There were now five (5) stores which were esilx.ecognizable as they were painted in the same çoloura. Looking to the Future On a Growth Path By 1987, Mr. Francois Mills the staff had incressed and included the following senior members and who occupied offices at the main branch. These persons managed staff, some of whom were dispersed at the various branches as well as trained employees who were on the floor of the Stores. Undoubtedly, John Francois Stores has been a successful organization, but something waa needed to take the organization onto the next wave. As a family, they looked at the financials very closely and recognized that while the company was still shead of other similar establishments, with an influx of customers at all branches, the profits had been reducing in the three (3) years prior to 2019, though minimally. It was determined that there were several factors in the extemal environment that were impacting busines3es generally. Mr. Francois and his family had their usual monthly mesting in December 2019 and you were invited to get a better understanding of the status of the organization. At themeeting, some points were noted in relation to the present status of the organization, namely a SWOT Analysis. Whist the SWOT Analysis was not fully articulated in tems of what the strengths can and have brought to the Company; how the weaknesses are impacting the Company; the possible outcomes from taking advantage of available opportunities; and the possible impact of thrests, • Personnel Mamager- was responsible for ensuring that human resource practices including health and safety procedures were adhered to • Accountant - responsible for ensuring that accounting standards are upheld. Also, the member was responsible for the cashiering finction. which could be utilized and contribute to continued success. He would have to think a bit more • Procurement Inventory Manager-responsible for ensuring that adequate stock is always available through the efficient and timaly management of inventory. • Marketing Manager- works alongside the Procurement/Inventory Manager to promote about his next move. Mr. Francois stretched his imagination, "We had better start thinking about starting a branch in anorer island some foreign counoy, or start to manufacture something thatpeople willneed. "Then he pondered to himself, "I do not have all the knowledge about the inticacies of what I am thinking and the so-called strategies to contin uE to be a winner" the organization, its products and seasonal promotions. the brief notes are highlighted below:

Table #1 below:
An Opportunity for You to demonstrate your Knowledge, Skilk, Abilities and Other
Characteristics (KSAOCS)
Cosmetics and related School itema - copy
products for mem and books, pancils, pens
Baic food/grocery
items - rice, flour,
rulers, etc.
sugar, peas, salt,
sesonings and other
condiments
women.
Mr. John Francois, avery successful businesaman is contemplating his nextmove at the age of
seventy (70). As a young man at the age of sixteen (16), he dreamt of becoming a "businesaman"
and would go into stores in the city where he lived and observe how persomel operated. In his
exploits, he became very friendly with manyof the business owners in the city. As time passed,
John Francois obtained four (4) Advanced Level subjects (Mathematics, Geography, English
Literature and Spanish). He also enrolled in a Technical Vocational institution and pursued short
courses in tiling, plumbing, masony and electrical maintenance for which he gained
certification. Through his qualificatians, John was able to secure employment quite essily from
the age of seventeen (17) years. Within afive (5) year period, John had worked at alarge
hardware store, then a small home branch of a large Bank, and alarge successful insurance
Personal hygiene
Plumbing and
A variety of snacks
products
electrical material
and soft drinks
Perfumes/fragrances
Small appliances
Kitchen ware and
Glassware
Clothing and footwa Household items -
for babies, and boys
snd girls
A variety of gift items
batteries, glue, tacka,
company. During that time, John was being very observant and was recognized by each of his
employers as an asset. However, John was "hungry" and wanted to achieve his dream of
becoming a "big businessman".
etc.
Ladies and gents
Household cleaning
Gardening
Opportunity Ahead!
Unfortunately, John Francois lost bothhis parents bythe age of twenty-three (23), but he was laf
with a fortune. By the age of twenty-four (24) John decided to erect a four-story building on a
piece of land which he had inherited in the city. He was focused on his goal of starting a
business. He began reading autobiographies and other books about successful businesamen
across the world. Healso sought advice from the collesgues and mentors whom he had met
along the way. He was never afraid to seek advice. In 1977, at the age of twenty-six (26), John
Francois had completed the large commercial building at the comer of French Street and John
Street, the main street in the city and one of the busiestcomers in the city of Timberland on the
esstem part of the island of Çamiher. The building was painted in a bright florescent green and
bordered with bright yellow. "My building must be a landmark in Timberland", he thought to
himself. The people of Timberland were a diverse population in many ways and the building wa
a true reflection of Çamikar. Mr. Francois operated as a sole proprietorshipfor many years
selling a variety of almost every item that a household couldwant as shown in the table below:
underwear and other
products
tools/implements and
everyday gaments
hardware items
Gym ahoes and
slippers for ladies and
Sewing items
Avariety of handy
man tools
gents
The Early Years and Thinking Ahead
John Francois Stores began withfive (5) employees: a cahier, twostore clerks, one driver and a
demer. The store was well sectioned with the variety of items sold. The size of the building
allowed Mr. Francois to offer for rental four (4) large offices on the third floor to two (2) lawyers
and two (2) accoumting fims. The fourth floor was reserved for rental for fumctions, parties and
other activities by the citizens from all over Çamitar. To date, the rentals have been bringing ina
hefty monthly income. John Francois Stores
Orders are placed with wholesalers who would deliver the products on scheduled daya. Mr.
Francois remains a very organized individual. During the first two (2) years of operating in the
city of Timberland, Mr. Francois observed that his customers comprised of citizens from all over
the island. He began to plan. He thoughtof setting up branches in the west, north, south and
central parts of Çamihar, but with the Timberland store remaining as the flagship branch.
pies the ground and lst floors of the building.

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