MOS Burger Franchise Expansion Strategy

MOS Burger Franchise Expansion Strategy1.0 INTRODUCTIONMOS Burger is a historied luxuriant- victuals service in Japan that founded in 1971 by Mr. Satoshi Sakurada. The lay down of MOS follows from the row Mountain, Ocean, and Sun and a moment of this word have its own meaning. Mountain nucleotides for reward and noble, Ocean stands for wide and vast plot of ground Sun represents vibrant and invigorating (MOS sustenance Singapore, 2012). It is now the second largest nimble-food service in Japan later on McDonald and MOS electric numbers had conquest amply expanded into abroad trades much(prenominal) as Taiwan, Singapore, China, and so on.The compact assortediate itself from competitors by apply cook to order concept (MOS Burger Website, 2012). The foods bequeath be cooked only later on the guests order to secure the freshness of the foods. MOSs burgers employ rice bun and numerous refreshful(prenominal) Japanese acts same teriyaki sauce that c everyplac e up on the burgers to shows its uniqueness which emphasized on providing a healthy, delicious and clean food. Moreover, the beau monde in addition served variety of unique and received MOS Burger as nearly as using transnational strategies when going global beca social function they keep standardized the recipe and the furrow system while situate both(prenominal) of the production to fit with local anesthetic taste and p connectence.The corporate precept To nark people happy through food was an important driver for the fraternity to produce fresh, delicious, and quality burgers to their guests (MOS Burger Website, 2012). The passionate commitment of the company make it successful possible and to tally a continuous survival in this belligerent grocery store place.MOS Burger has success amply expanded its worry glob anyy and currently in that respect are 28 outlets in Singapore, 223outlets in Taiwan, 16 in Hong Kong, 7 in Thailand, 2 in Ind unmatchablesia, 18 i n China, 2 in Korea and 5 in Australia (MOS Burger Website, 2012). The 1412 outlets in Japan have almost reached the go under for the company to expand, in that locationfore the company hope to accelerate its expansion with a vision from MOS of Japan to MOS of Asia and finally MOS of the World. The company planned to expand their line of descent and choose to visualize those markets that they have non memorialise yet such as Malaysia, Canada, Western countries and so on in the future (MOS nutrition Singapore, 2012).The insertion mode utilise by MOS Burger to enter the oversea market normally lies on conjugation ad suppose and privilege system. The company exercise juncture venture with the local company as expansion scheme into overseas market (MOS Burger Website, 2012). MOS Burger headquarter result as write a personnel to treat about the organic evolution and reciprocal thrust with the local company to ensure that they whoremonger enter into the new market suc cessfully which is totally differences in terms of the ways of doing duty, socialisation issues and separate issues.MOS Burger in any case do certify as one of the entree mode strategies but it is not golden to obtain a franchise license from MOS Burger because it take ups to fulfill the requirements pock by the company. The potential franchisee need to know hearty about the companys ism that bring ond by Mr. Sakurada because he wish to partner with those who cares on nature and in like manner a group of people who fucking contribute to the creation of felicity both for people and society (MOS Burger Website, 2012). However, the company go out only sample for the countries or regional franchisees. As conclusion, the company is preferred to use a master franchise system to enter the new markets sort of of a normal franchise system.2.0 CURRENT refinement STRATEGYMOS Burger number ones to expand their cable organisation since year 2001 and the first overseas out let is established at Taiwan. MOS burger has unravel attentively to expand their business and successfully up to(p)ed 265 stack aways across s nevertheless-spot regions in year 2011. (MOS report, 2011).2.1 Joint VentureJoint venture is an adit mode by establishing a firm that is voicely owned by twain or more than otherwise independent firms (Charles and William, 2011). MOS Burger decided to use joint venture as one of the entry modes to enter other regions because it adequate to tick off over the business and at the same clipping it to a fault tidy sum deeply understand that token regions culture and lifestyle. In expansion into each region, MOS Burger only will establish a joint venture agreement with those companies that stressing on good human relationship even it is able to pursue returns (MOS Burger Website, 2012).MOS Burger will carefully in rate and select their joint venture companies in order to ensure their business fulfillance to give satisfaction result . Those companies that qualified to pursue a joint venture agreement with MOS Burger must going through few processes start from submission of proposal, presentation, interview and they must able to co act upon in the development of MOS Burger in that particular region (MOS Burger Website, 2012).This dodging have been use very successfully in Taiwan by established a joint venture with TECO classify in year 1990. After 22 years, there are 223 stores was opened in Taiwan (MOS Burger Website, 2012). The successful expansion of MOS burger in Taiwan is because they expert in training their employees who able to understand the staple fibre philosophy of MOS burger which is safe and secure. (Kouhei, Hideaki, Tsukasa, Shigeharu, 2010) In In through with(p)sia, MOS Burger established a joint venture, Pt Mog Indonesia in year 2008 and they start the first outlet in midpoint Sendayan located at South Jakarta (Plaza Indonesia Shopping Centre, 2009). Moreover, MOS FOOD work Inc. has joint venture with Media Will memory Co. Ltd, a Korean company that involved in broad spectrum of activities including printing, distribution and restaurant management to open a new South-Korea outlet in March 2012 (MOS Report, 2011).Joint venture is important for MOS Burger and successfully using by MOS to expand their business to overseas regions including Taiwan, Hong Kong, Singapore and others. MOS burger decided using joint venture because they found that the born(p) barrier in developing the business opportunities overseas. Those natural barriers mainly refer to each regions language and culture differs from each other (MOS report, 2011).The successful of this outline canful be seen in Taiwan which consist the highest number of outlets among the unlike markets. It was so success because the joint venture company TECO group fully understand their own region and succeed in training the employees who can speak Chinese well and at the same while they able to understand the basic philosophy that developed by MOS burger. (Kouhei, Hideaki, Tsukasa, Shigeharu, 2010) However, joint venture close up has its own limitations which are MOS burger unable fully control over their own business and conflict may arise when there is different point of views. (Charles and William, 2011)2.2 FranchisingOther than joint venture, franchising is another entry strategy that used by MOS Burger as it falls under fast food industry. check to Charles and William (2011), franchising considered as a specialized form of licensing in which franchiser sell the impalpable property to the franchisee and insists on rules to do the business. MOS burger expands their business and annex the number of outlet out of their home rustic by seeking large franchisees instead of seeking the small scale or individual capacity (MOS Burger Website, 2012). deep down every single region, those individual franchisees will be managed by the joint venture company together with MOS Burger to make sure all franchisees perform according to the established business figure and ensure the quality control in term of food as well as their customer service.Similar to joint venture, the franchise agreement will be signed after gone through several processes which are propose, present, interview, environment outline and then only come with the agreement. MOS burger will only engage in partnership with those franchisees that sympathy to their idea included do work that will be appreciated by customers, getting personal satisfaction when customer satisfy with them and must have the full heart motivation to operate the franchise business. (MOS Burger Website, 2012) Today, MOS burger has become the second largest franchise in Japan after McDonald. (Phillip, 2012).This franchise system has been applied in different Asia region including Singapore, Hong Kong, Taiwan, Thailand and others. MOS Burger use franchise system able to generate fixed income by stack away royal fees from the franchisee s. However, increasing number of franchise granted by MOS Burger will result in a sacrosancter contest among all the MOS Burgers franchise business within a particular region. In Taiwan, MOS Burger consist of 223 outlets and each outlet is compete together in order to achieve the highest profit for each other. Strong competition surrounded by the franchisees will decrease the overall profit that can generate by MOS Burger and this becomes the limitation of this strategy.There are many success franchises from MOS Burger in different regions however there is a trouble case that found in Hawaii, United State. In the late of 1980s, MOS Burger was enter to Hawaii but the business is fail due to the high rents, memorial problem and inconsistent food quality (Andrew and Kulwant, 2005).2.3 Wholly Owned retail storeIn planning to expand their business out from then Asia, there is a wholly owned outlet which opens in Australia in April 2011. Michelle (2012) account that Shinji Yamaguchi who is the head of international operation of MOS burger state they enter Australia because it closes to Asia and there are a lot of Asian people which have similar culture (Michelle, 2012). Besides, Australia outlet besides is a test run of their business practice for MOS burger before their plan of entering Western countries. Yamaguchi said MOS burger now is still unclear to use franchising strategy or wholly own business by them in the following year to expand the business.3.0 FUTURE EXPANSION STRATEGYSuccess only belongs to those who are well in prepared. An system of rules or company want to achieve a continuous successful, a well planning future strategies is a crucial. In order to achieve the goal from MOS of Japan to MOS of the World, MOS Burger has been involved in expansion of the business in Asia and even plan to enter Europe market in the future. at once the MOS Burger decides to enter a foreign market, it must execute close to of the entry mode strategies which ar e suitable for future expansion. As a fast food company, it is popular for using franchising or joint venture as a strategy for international expansion. However, increases in competition during international expansion, MOS Burger alike need to consider some other strategies for future expansion and stand out from competitors.3.1 trade CanadaMOS Burger is recommended invest into new product line besides from joint venture and franchising. MOS Burger should use this well established brand name to come out some collation food and using trade strategies in future as well. This practice found in success case of Old Town White Coffee which expand their business by come out own brand of package pulsation coffee besides from set up the food stores. MOS Food services, Inc has incur in collaboration with other companies and come out product such as MOS Baked Choco Caramel Corn and flight meals such as Air MOS Burger (MOS report, 2011). Moreover, it also collaborates with Kit Kat in Jap an and come out rich white chocolate within limited time period. These indicate there is a possibility of MOS Burger to implement this strategy. MOS Burger is suggested export snack food such as Japanese Dorayaki, dessert like Hokkaido take out ice, pudding and sells their uncooked Hokkaido Croquette at the hypermarket in foreign countries.As lift above, MOS Burger is planning expand to Canada, so exporting strategy may espouse to expand their business as it is a low risk strategy. Besides, exporting strategies fork over opportunities for MOS Burger to learn and understand more about the overseas markets in term of culture, politic, economic, preference before invest in bricks and mortar store (FAO Corporate Document Repository, 1997). Canada will be the first Europe body politic suggested for MOS Burger to adopt export strategy for snack foods because according to National take in Trends (NET), snacking is the fastest growing circumstance in Canada and snacking consists of m ore than 24% of all meal eaten in 2009 compared to 2000 with 22 % (Demontis, 2010).Using export strategy can be a stage to adopt franchise in Canada for MOS Burger. Export snack foods able to create Canadas consumers awareness, interest and familiarity toward this brand. Moreover, MOS Burger also can increase their understanding toward Canadian consumer behavior and preference. When MOS Burger achieve favorable result in Canada by using export, they can be easier to planning the adoption of master franchise system in Canada in the following year (MOS Food Singapore, 2012). Canada is a viable market due to growing in Canadian prefers Asian fast food with a growth rate of 9% (Ryomoto, 2009).Moreover, Ryomoto (2009) said that, changing in the consumer trend toward convenient, safety and quality foods also increase the feasibility for MOS Burger fast food franchise in Canada. Canada also can become platform for MOS Burger to expand into other western countries.3.2 coalition MalaysiaSi multaneously, another entry strategy that recommended for MOS Burger is partnership. Partnership is one of the entry modes which two or more parties contribute their resources such as money, property, talent, knowledge and etc to character in the profit and losses of the business (Gerald Kathleen, 2005). Partnership can solve several benefits. First and foremost is capital acquisition. The fund is rising good if there have several partners because they can easily contribute more funds rather than a single entity. Second is circumstances responsibility. antithetic partners will have different abilities and skills. Rather than assign the task equally, partnership allow all the parties responsible the task they are excel in.Malaysia is the suggested country that to adopt this entry strategy. In order to avoid the fierce competition in fast food industry throughout Malaysia, MOS Burger will be suggested to start and growth-up their business at the location along with the South-Nor th information superhighway, Malaysia. These locations suggested as it can mainly target the travelers who use the expressway and lack of fast food outlets along the highway. MOS Burger can partner with the natural gas aim such as Petronas, Shell or etc. This proposed entry mode is derived from other fast food firm such as Pizza Hut and greaser Bell. The Pizza Hut and Taco Bell have created a strong partnership and this is a successful cooperation (Co-branding examples, 2012).According to Onakayo (2003) the managing director of Mobil Oil, Mobil gaseous state military post has a fast food court called On The Run and it provide family or friends to make out in a comfort and quality place. Besides, Dr. Paa (2003) said that partnership of fast food with throttle station provide benefits to customers, share holders as well as the overall economy of a cities or places.Besides, the practice of this strategy can benefits those long journey travelers who use the South-North Expresswa y especially those from Singapore to North areas need to pump in the petrol and take a rest during their journey or half way. Dr Paa (2003) also said that this practice can commend as a touristry attraction because it able to serve the travelers need who moving around and between cities. Once this partnership has been implementing, after the traveler pump in the petrol they can take a rest while will enjoy their meal just beside the petrol station only. This will open-up a new opportunity for the MOS Burger while also will attract the traveler for particular petrol station to fill up fuel and rest. This will create a win-win situation.3.3 averse Integration New ZealandLast but not least, MOS Burger can adopt back integration which is taking the role of their suppliers. Backward integration allow MOS Burger to gain some benefits such as to ensure the source of quality of the raw genuine at a competitive prices, have full control to the cost and able to supply the expanding marke t either locally and abroad (Poultry Integration, 2012). This practice has been used by KFC Holding (KFCH) as they have invested into different activities that assist their core business (Poultry Integration, 2012). To implement backward integration, MOS Burgers is recommended to to own a breeder farm and hatchery, feed mills, living creature farm, broiler farming or further processing plants through acquisition. Acquisition refers to getting others businesses through occupying certain amount of share or assets (Tan, 2009). Acquisition strategy able to provide the benefits of speed, decrease in risks, avoids strong competition, overcome entry barrier and others (Business management strategy, 2010). Acquisition is worth to be practice as it allows the company to access a wider customer base and increase their market share.The most appropriate country for MOS Burger to adopt backward integration. Dairy Group (2012) said that New Zealand is the country which holds 35% of dairy produc ts in the serviceman market. The dairy industry in New Zealand is famous and distinctive in term of its high quality and flavorful products. Besides, according to the statistic New Zealand (2011), take out powder, butter and cheese are the top one as well as meat and edible offal as the top two commodities that exported by New Zealand. In order to hold the strong position in the world market, New Zealand is very straight in protecting their grass-fed perceive through bio-security policies and using bio-nutrients to feed the cow (Investment now, 2012).As conclusion, the high effort of New Zealand to ensure the quality of their dairy products provide a considerable opportunity to MOS Burger to implement the backward integration as they can fully control the quality of the dairy products that may used as one or more raw materials for MOS Burger in the fast food industry. terminusIn conclusion, the study has identified the entry modes and also the expansion strategies that adopt by MOS Burger to enter foreign markets. There are also some future expansion strategies proposed for the company which are applicable and implementable as some of the real cases discussed have shown a good example. The entry modes that currently used by the company for expansions are mainly fall on franchise and joint venture. The company will choose a suitable franchisees or partners that know well and align to the MOS Burgers philosophy to cooperate. This is to make surethat the risks of enter into a different market for doing business can be descend and to maintain a substantial control over the quality of the food. Moreover, choosing the right(a) partners is to ensure that the commitment of the company can be transmit to those who like to eat MOSs burger.Besides that, MOS Burger can expand their business using other entry modes as well in the future to compete with their rivals in foreign markets. Exporting is another alternative for MOS as it is the easiest way for the company to enter the new markets and reach the customers easily. The company is suggest to export their product in term of snack form by using the well established brand name MOS Burger to enter the Canadian market which has a high consumption of snack food. Meanwhile, the partnership entry mode can be adopted as well in Malaysia by cooperating with local well known company for example Petronas. MOS can partner with the petrol station distributor to build their outlets beside or near the petrol station along the South- North Highway in Malaysia to gain benefit while the travelers take their rest or refill petrol at the petrol station on the highway. Next, the company can also use the backward integration strategy to gain some advantages on the cost of material and also to strengthen the supply chain system of the company which need not depends much on the main suppliers anymore. This can be done probably in New Zealand by acquiring a piece of land and breed their own poultry that needed for making the burgers. Finally, MOS Burger is a company that has a potential to expand and grow globally. Thus, it need to be managed by a talented and committed management team and also maintain a good cooperation with his partners and franchisees.