Comparing Franchising and Direct Entry for Internationalization: A Case Study on M&S

GLOBAL ECONOMIES
AND INTERNATIONAL
MARKETS
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Aim: ............................................................................................................................................3
Objectives:...................................................................................................................................3
Research Question.......................................................................................................................4
Rationale......................................................................................................................................4
Research gap:...............................................................................................................................4
LITERATURE REVIEW................................................................................................................4
Theme 1: Franchising and direct entry as methods to enter into global market..........................4
Theme 2: Effectiveness of direct entry and franchising as a way to gain competitive
advantages....................................................................................................................................5
Theme 3: The suitability of two different international market entry methods...........................6
Literature gap...............................................................................................................................7
RESEARCH METHODOLOGIES.................................................................................................7
Research type:..............................................................................................................................7
Research approach:......................................................................................................................7
Research philosophy:...................................................................................................................8
Research design:..........................................................................................................................8
Data collection:............................................................................................................................9
Sampling:.....................................................................................................................................9
Data analysis:...............................................................................................................................9
Ethical consideration:................................................................................................................10
Budget........................................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Industrialisation refers to the process where the economy changes from fundamental
agrarian manufacturing to the mass produces and advanced in technological aspects in product
and services (Sheldon and Henderson, 2019). Effect of industrialisation involves the significant
inhabitant growth, rapid urbanisation, improvised accessing for food, increasing demand in
requirement of raw materials. Therefore, increasing demand in international trade is increasing
the opportunities for the businesses to expand their business in global market. the modes for
entering into the global market are franchising and direct entry mode. In this franchising involves
the two known terms which are franchisee and franchisor, it refers as the contractual entry way
which involves the agreement where firms need to enter into new country’s market, where
franchisor develops the brand’s trademark for the business and franchisee pays the royalty and
works under the franchisor’s name. Direct entry mode involves the direct exporting the goods
and services to the other overseas market, it is considering as the fastest mode of entry for the
business to mark their presence in global market.
Mark and Spencer company has been selected for the study, a multinational British retailer
company, headquarter is present in London, England. Current study carries out the research
points which highlights the research aim, objectives, literature review and research
methodologies along with budget explanation.
Aim:
To compare the challenges and advantages of choosing franchising and direct entry
method for internationalization: A case study on M&S.
Objectives:
 To understand the franchising and direct entry as method to enter into international
markets.
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 To assess the effectiveness of direct entry and franchising as way to gain competitive
advantage
 To evaluate the suitability of two different international market entry methods
Research Question
 What is the concept of direct entry and franchising for entering into global market?
 What are some usefulness of DE and franchising for achieving competitive benefit?
 What are suitability of DE and franchising method?
Rationale
The reason for conducting the study is to bring concern about the direct and franchising
entry mode for the M&S company as by understanding the franchising and direct exporting
concept organisation can easily proceed to enter in overseas market (Coo, 2018). Because of
rapid industrialisation it is growing opportunities for the businesses to expand their services in
other countries as well, therefore this study aims to provide better understanding in these two
entry concepts.
Research gap:
As such research gap is identified that researcher has faced difficulties in collecting the data
because there are no in depth information is available to rely on all study has been done to by
referencing the 5-year-old articles. Also researcher might have to face difficulties in interview
process to obtain the data as this concept is new and no one are very familiar with such entry
modes.
LITERATURE REVIEW
Theme 1: Franchising and direct entry as methods to enter into global market
As per the views of RodrÃguez and Isabel, (2020), there are various ways through which
the businesses can enter a foreign market place. International franchising is a strategic way to
reduce the dependence over domestic demand and expand into new market space for future
revenue generation and maximize profits. Extending brands globally with the help of franchising
includes low level of risks which requires minimum investments along with offers a huge upside
potential for grading abilities. Franchising is basically pooling of resources as well as capabilities