Market Entry Strategy Assignment

RESEARCH PROJECT

ACKNOWLEDGEMENT
I would like to thank to my professor for his kind support. Without his guidance I would not
be able to complete this research successfully. I like to thank to my parents and friends for their
support and love. Their encouragement has helped me to complete this research.

ABSTRACT
Globalization is basically a process or a method through which company, government or
people intact or integrate worldwide. Its a process of integration and infraction associated with
cultural and social aspects. Study uses questionnaire technique for gathering information about
topic. It is qualitative in nature. Study describes that for raising demand of products franchisors
implements commercial activities that helps companies in establishing their branch in new
location successfully. One of the main advantages of implementing franchise option is that entry
cost of this strategy is very low. Furthermore, it supports in rapid foreign expansion of business.
Franchise is the market entry strategy that supports firm in establishing branch in new location
successfully in limited investments. This is beneficial in order to minimise risk of failure of
organisation in new geographical location. McDonalds is the leading fast food firm that
implements various global expansion strategies. This aids the organisation in generating huge
profit and attracting more buyers towards brand. Researcher applies Questionnaire method in
order to gather fresh detail related to subject. Study reflects that franchise market entry strategy
is great option for business in order to establish branch in new location and raise performance of
employees as well.

TABLE OF CONTENTS
TITLE..............................................................................................................................................1
INTRODUCTION...........................................................................................................................1
Research Aim.............................................................................................................................1
Research questions.......................................................................................................................1
Research Objectives.....................................................................................................................1
Background of company..............................................................................................................1
Significance of study...................................................................................................................1
LITERATURE REVIEW................................................................................................................2
Globalisation................................................................................................................................2
Different entry modes..................................................................................................................2
Macro environment analyses.......................................................................................................4
Specify entry mode......................................................................................................................4
METHODOLOGY..........................................................................................................................5
Introduction..................................................................................................................................5
Research philosophy....................................................................................................................5
Research approach.......................................................................................................................5
Research strategy.........................................................................................................................6
Research choice...........................................................................................................................6
Techniques and procedure of data collection..............................................................................7
Sampling......................................................................................................................................8
Data Analyses..............................................................................................................................8
Access negotiation.......................................................................................................................9
Research limitations.....................................................................................................................9
Ethical issues...............................................................................................................................9
Cost..............................................................................................................................................9
PESTLE and SWOT for China..................................................................................................10
Gantt chart.................................................................................................................................11
FINDINGS AND ANALSYES.....................................................................................................11
Analyses.....................................................................................................................................23
CONCLUSION..............................................................................................................................25

RECOMMENDATIONS...............................................................................................................26
REFLECTION...............................................................................................................................26
REFERENCES..............................................................................................................................29
APPENDIX....................................................................................................................................30
Consent form.............................................................................................................................30
Information sheet.......................................................................................................................30
Questionnaire.............................................................................................................................31
Ethics Form................................................................................................................................33

TITLE
"Effectiveness of franchise market entry strategy for establishing branch in China successfully”.
INTRODUCTION
Globalization has changed the scenario of market. Geographic dispersion has helped
business in increasing their revenues and dealing with mass audience. Entry strategies are
considered as methods that are used by firms to establish their business in other location.
Research Aim
“To identify effectiveness of franchise market entry strategy for establishing branch in
China successfully: A Study on McDonalds”.
Research questions
 What are the challenges McDonald’s cloud face in China?
 What are the benefits of franchise?
 Why is franchise the best entry strategy?
Research Objectives
 To understand conceptual framework of globalization
 To explain types of market entry strategies for business
 To determine factors that create issue for McDonalds to enter in global market
 To analysis impact of franchise market entry strategy and its relationship with employees
performance
Background of company
Present study is based on McDonald’s that operates its business across the world and
have developed unique brand image in fast food industry. It has strong chain of fast food
restaurants. Company is operating in approx. 37241 locations and has generated 22.820
billion profits in the year 2017. McDonald’s has employed 235000 employees globally
those who are servicing consumers well. Its main agenda is to become leading fast food
brand and serve to mass audience globally.
Significance of study
This study will be beneficial for companies that operate in fast food industry as by this way
companies swill be able to know effectiveness of market entry strategies and will be able to
choose correct strategy for entering into Newmarket. Furthermore, this research will be
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beneficial for other scholars as well, as they will get brief idea and will be able to conduct study
in the future.
LITERATURE REVIEW
Globalisation
Lee and et.al., (2015) There are various kinds of tools through which enterprises can
enter into new market such as export, franchises, joint venture etc. All these have their own
significance and disadvantage. It is essential for enterprise to select the best method through
which it can meet with its objective.
According to (Hollender, Zapkau and Schwens, 2017) Globalization is basically a process or a
method through which company, government or people intact or integrate worldwide. Its a
process of integration and infraction associated with cultural and social aspects. Its one of the
most important part of modern society and also one of the hardest one to grasp. It results
removing barriers among all notional economies to encourage flow of goods, capitals, services
and labour. Many organizations have either been evolved or created into key roles in
globalization process.
As per the view of Lee and et.al., (2015) There are many impacts of Globalization on
business like: Increased competition: Flow of foreign investment in countries, removing
regulations which makes it possible for a business to enter market which was one impossible for
those companies. Greater Awareness and react to needs of customer: Customers nowadays are
very selective for quality, price or service which is being provided to them. Scale economies:
large scale production economies can be acquired by selling good across many nations. Because
of this they become even more competitive. Location flexibility: Many techniques or services
can be made available and allocated almost at everywhere. Because of this they can gain low
cost labour and many other resources at even lower price. Increased mergers and joint ventures:
Allows access to cost advantages and bigger market more freely.
Different entry modes
Franchising is the method in which firms sell their goods and services through
permitting other firms to sell their goods (Hollender, Zapkau and Schwens, 2017 ). For
example McDonalds is working in many locations across the world, it has implemented this
strategy that has supported business in making connections with mass audience and
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increasing profitability of the organization. There is strong relationship between franchise
entry strategy and business performance. Kotabe and Helsen, (2014) argued that If companies
take support of this methodology then it would help in minimizing financial risk of firm.
Companies give rights to other firms those, which are local at particular geographic area to
sell their goods and services by taking their name. As these big firms have strong reputation
in market thus, other local retailers become able to attract more people by using the name of
these big organizations. This assists entity in establishing their brand in other location
successfully and increasing number of customers as well. This supports firms in maximizing
value of enterprise with minimum investment. As brands are not required to invest anything
by implementing this franchise market entry strategy.
Hollender, Zapkau and Schwens, (2017) stated that through franchise enterprise can
easily enter into new location and can know about standard of that place. This would help in
improving level of performance of its employees. Cavusgil and et.al., (2014) argued that it is
not good strategy because it increases chances of spoiling brand image of the firm. There are
many small retailers those who have taken franchise of big brands but fail to serve
consumers well. This has affected overall reputation of brand to great extent. It is very
essential for business that to give franchise to correct firm which has strong customer
network and successfully operating operations in particular area. If entity gives franchise to
such companies that have poor reputation then people will not buy products from that firm.
This will affect its operational efficiency and my impact on expansion plan of enterprise as
well.
Hollender, Zapkau and Schwens, (2017 ) stated that Licensing: It is an arrangement where
rights to use a service or product is transfer to another company. It is one of the most useful
technique to enter into a desired market if that company or organization has large market share.
Licenses can be of two types i.e. marketing license or production license. Kotabe and Helsen,
(2014) argued that Franchising: It is typically an American process for fast market expansion
which is growing in other parts of the worlds (Franchise your business, 2018). It is mostly used
for food industries which has common business model which a company can easily transfer in
other market. There are few conditions which comes into picture if we are using this model. First
either your brand should have a strong congregation globally or its business model should be
unique so that can be utilized globally. And second future competition may be created in future
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of you franchise. Partnering: To enter a new foreign market its almost necessary and in some
parts of the works it is the most necessary thing.
Macro environment analyses
As per the view of Cavusgil and et.al., (2014) Economic Factor: Most important factor
which creates an issue to enter into a global market is Economic factors. Most of the fast food
industries have really expensive products which cannot be accepted by many countries as they
cannot afford it but there are some countries which can readily accept those products. Social and
cultural factors: All the countries are different from each other in terms of food eaten, language
spoken, dressing etc. But most important factor is food which his very significant and real and
affect the fast food industry business in that particular country.
According to Lee and et.al., (2015) Political and legal factors: it is important to gain
knowledge about the attitude of the government and people that particular country. Attitude of
that country's government towards foreign company and its product should be considered, mostly
fast food industry as the government and people of that nation are very choosy in terms of food
so it can affect the business. Market Attractiveness: This factor should be considered in terms of
revenue that can be generated and access that organization can get to the market of that country.
Specify entry mode
Basically franchising refers to the method of practising and using another person's
philosophy of business. There are some pros as well as cons of franchise. So the benefits are that
the brand name and products and services are already established.
McDonald's is a US based fast food chain is planning to enter and expansion in China market.
They have to find the challenges and adopt some strategies to establish in the existing market.
Strategies as per the China market
Re-engineering the menu according to the people's taste, lifestyles and perception. To survive, in
the market, the company have to be responsive to the China sensitivities.
Their strategy is to follow 5Ps which is price, product, place, people, and promotion.
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METHODOLOGY
Introduction
Research methodology is the process through which scholar can conduct investigation in
effective manner. Research methodology is systematic tool for conducting an investigation and
reaching to end result
Research philosophy
This is the type of technique that deals with development of knowledge and sources that
are being involved for answering research questions. There are various kinds of philosophies:
positivism, interpretivism, realism etc. Positivism is type of technique that believes in hypotheses
development. This is generally applies in quantitative type of research projects. In this scholar
has to develop assumptions and have tested these assumptions in order to reach to end results.
This technique works on quantifiable observations (Murshed and Zhang, 2016). Realism is
another kind of philosophy that emphases on truth of reality and recognises significance of multi-
level study. Interpretivism is the philosophy that pays more attention on involving human being
in study. It takes support of theories and models in order to develop understanding about topic.
In the present study on impact of franchise market entry strategy on business in order to
enter into new location successfully, scholar has applied interpretivism philosophy. This has
helped person in knowing more about various market entry strategies and analysing significance
of franchise strategy for McDonald’s in order to enter into China successfully (Guthrie, 2015).
Interpretivism philosophy will be used in order to understand the same objective reality I
different ways.
Research approach
It can be defined as procedure or outline of carrying out an investigation effectively.
There are inductive and deductive two main approaches that used by researcher. Inductive is type
of technique that is associated with qualitative studies. This method involves theoretical
perspectives and by reviewing existing theory scholar has to answer research questions.
Inductive approach observes facts and determine pattern (Keutmann and et.al., 2015). This aids
in generating new theory successfully. Deductive is another kind of technique that starts with
theories and frame hypothesis. Scholar tests these hypotheses for finding actual results.
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In the present study on effectiveness of franchise market entry strategy on business
growth investigator has applied inductive research approach. That aids the person in minimising
complexity and reaching to end results in significant manner
Research strategy
It can be defined as outline of process that is applied by researcher for completing this
investigation. Descriptive, semi-experimental, experimental, exploratory etc. are various
designing techniques that are used by scholar as per suitability of the research project.
Descriptive design is the type of technique that aids in describing situation or case (Silverman,
2016). It is theoretical approach, by implementing this method scholar can get in-depth
information that may helps in answering the research problems. Experimental design is another
kind of tool that assists in analysing relationship between cause and effects. Scholar has to
involve dependent and independent variables that allow in finding actual impact of one variable
on other. Explanatory design is tool in which researcher applies their own ideas and thoughts in
order to generate valid results. Exploratory design helps in exploring facts related to subject
matter (Taylor, Bogdan and DeVault, 2015). In the current study scholar has taken assistance of
descriptive research design. This has supported in answering the questions related to market
entry strategies and its effectiveness for business
Research choice
Primary data collection sources assist in involving fresh details that have never been
used in any previous literature. Study will apply random sampling method that would help
in avoiding biasness and collecting current detail related to subject matter. Secondary
research will be done by reviewing the various journals and articles. The data will be also
collected from only the articles which is been published in English language. Information
will be also gathered by searching for the key-words like Mac Donald, globalisation, fast
food and many more. Researcher is responsible for conducting an investigation in efficient
manner. Individual has to use primary and secondary information for developing knowledge
about topic. But cost, access and ethical aspects are considered as most essential elements that
may affect overall results (Taylor, Bogdan and DeVault, 2015).
Primary data collection
It is the technique that helps in gathering fresh data. Such kind of information are very
fresh and never been used in any previous research. Such type of data is carried by research
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oneself. These are more specific details that help scholar in understanding needs of study and
involving correct detail in the research project. Primary data collection sources supports scholar
in acquiring new data that can explain situation well and can assist in answering all questions in
significant manner (Silverman, 2016). One of the main advantage of using primary data
collection sources is that these are original and have high relevancy with the subject matter.
Reliability of these information is very high.
Questionnaire, observation etc, are various techniques that supports scholar in finding
real facts related to topic. Present study is based on impact of franchise market entry strategy on
business in order to enter into new location successfully. For completing this research scholar
has taken support of questionnaire tool. This is the best way through which investigation has
asked questions with manager of McDonald’s and have realised effectiveness of various market
entry strategies (Keutmann and et.al., 2015).
Secondary data collection
This is another technique that helps in gathering information about topic to
scholar. There are many researchers those who have conducted many researches in past on same
topic. Investigator involves their studies in order to develop understanding about topic. Books,
Journals, internet articles etc. are various sources through which researcher can gather in-depth
detail about topic. External data are being collected from outside sources that aid investigator in
developing understanding about topic. The main advantage of using secondary details is that it is
cheaper and easier to gather (Simmons and Watson, 2015). By this way, scholar can collect
huge data in less time
Techniques and procedure of data collection
Research can be defined as art of investigating about topic. It is considered as methodical
searching that assist in knowing more about topic and gathering real facts related to subject
matter. Effective researching allows scholar in collecting authentic data that may help in
answering research questions significantly. There are two main types of data collection tools that
are used in different kinds of investigations (Taylor, Bogdan and DeVault, 2015). Questionnaire
will also be used to conduct the study. It will be utilised as data collected from this method is
authentic and reliable. Advantage of this process is that a lot of information can be collected
from the participants at an affordable price. The main disadvantage of using it is that their can be
a misconceptions in understanding and interpretations of facts. Questionnaire will be used by the
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scholar to conduct the study. Advantage of using this method is that it will hep in investigating
issues in a depth way. This is been using in the report as it will assist in obtaining detail
information related to the consumer choices and preferences. This method also has a
disadvantage that it is very time consuming.
Sampling
Sampling is the process of involving right number of people in the study those who can
give accurate detail related to topic. Samples are the collection of units those are being involved
in investigation to determine truth. Probability sampling is the technique in which each
individual gets equal opportunity to be selected in the research. Random, stratified, systematic
are various tools if probability sampling method. On other hand non probability is anther kind’s
of process in which people are selected with specific purposes. Purposive etc,. are several
methods of non-probability sampling tool (Guthrie, 2015). In the current study on impact of
implementing franchise market entry strategy on business to enter into China successfully
researcher has taken assistance of random sampling method. This is most suitable tool because it
helps in involving people randomly and gathering the view without bias. This is simple process
and enhances probability of gathering real facts related to subject matter. For that researcher has
involved15 managers of McDonalds as sample to give answers related to impact of franchise
market entry strategy (Murshed and Zhang, 2016).
Data Analyses
This is most important part of research project, after gathering in-depth information about
topic researcher has to analyses or evaluates these details in order to generate valid results.
Selection of analyses technique is highly dependent upon the nature of investigation. In
qualitative projects scholar has to take support of thematic and secondary analyses techniques.
Both these tools evaluate data without involving any kind of statistical calculation. On other
hand in quantitative method scholar has to use SPSS for calculating correlation, regression etc.
for finding out the answers of research questions (Keutmann and et.al., 2015). In the current
research project on impact of implementing franchise market entry strategy on business to enter
into China successfully investigator has taken assistance of thematic analyses method. This is
best technique when researcher has to analyses qualitative data. Scholar has prepared themes and
have prepared graphs on the bases of collected information. This has helped in understanding the
actual information about effectiveness of franchise strategy for entry into China for McDonald’s
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On the bases of these graphs scholar has interpreted data and have drawn valid conclusion. This
is most suitable and easy to apply. Individual has prepared themes and have prepared graphs.
On the bases of these graphs researcher has given interpretation. This has helped in finding
actual results and drawing a valid conclusion.
Access negotiation
Researcher has taken permission from McDonalds before conducting research on it.
Furthermore, it has taken permission from authorities to discuss with their managers. It was very
difficult to get permission from them but scholar has convinced them and have make them ready
to share their views. Individual has accessed the websites in ethical manner. Scholar has not used
any website that was not accessible. Scholar has taken care of taking permission to access any
link that is required to answer the research questions
Research limitations
Limited financial resources and time was the major constrains for this study. Researcher
has managed its resources well in order to overcome this limitation.
Ethical issues
This is responsibility of scholar that to take care of ethical aspects, ignorance of ethical
parameters may affect the entire study badly. In the current research, investigator has taken care
of these elements and has sent consent form to all respondents (Simmons and Watson, 2015).
They have signed this consent form and after that scholar have involved them into the study.
Furthermore, researcher has not forced any person to participate in this investigation; they have
given rights to skip any question if they do not want to answer it. Furthermore, scholar has
recorded data into password protected computer. No data has been shared with any third person
thus, information are kept safe and secure (Guthrie, 2015). In addition, researcher has taken care
of maintaining dignity and respect. Individual has not forced any participant and have given
them full respect. Individual has not copied any material from any website, all the information
has been written in own words
Cost
This is essential that entire investigation get completed within specified budget.
Individual has to ensure effective utilisation of resources and minimising wastage as well. In
current research on impact of implementing franchise market entry strategy on business to enter
into China successfully scholar has utilised financial resources well. In addition, distribution of
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resources has been done properly (Silverman, 2016). This has helped in minimising issue of
wastage. With the help of this strategy individual has become able to complete this research
within specified budget. The cost of this investigation would be 500 Pound. Scholar will have to
spend 150 Pound in travel and will have to bear cost of 250 for time convenience. 100 Pound
will be sued in gathering the material from purchasing sites.
PESTLE and SWOT for China
SWOT analyses
Strength
 Boost GDP rate is the major strength of
China; McDonald’s can raise its
revenues by entering into this market.
 Cheaper labour is another strong point
of China, that encourages many
international companies in opening
their manufacturing entity here.
Weakness
 Restriction on using social media such
as Facebook etc. In such condition it
may become difficult for McDonald’s
to make connection with local
consumers of China.
 Price restriction create difficulty for
business and decrease their sales as
well.
Opportunities
 Large population create opportunity for
McDonald’s, as it can enhance its sales
revenue here.
Threats
 Rigid regulations
PESTLE analyses
 Political factor: China has rigid regulations that create negative perception in the mind of
consumers. Hence McDonald’s can face huge issues in conducting their operations in this
market.
 Economic factor: Economic condition of China is very good, companies can get benefit
of raising sales, as people have good purchasing capacity to buy products.
 Social factor: Large population, high education level, adequate income source makes the
Chin potential market for every firm.
 Technological factor: China has restricted use of social networking sites, that is the
biggest problem, as companies cannot make connection with location consumers. But
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mobile uses are high and there are many advance technologies which make it very
potential market.
 Legal factor: China’s inflexible regulations create burden of the firm. Trade laws of
country ae very rigid.
 Ecological factor: It encourages clean atmosphere hence CSR policies of the firm make
them able to sustain in Chinese market significantly.
Gantt chart
Activities Sep Oct Nov Dec Jan Feb March April May
Choose topic
research aim
and objective
research
questions
proposal
writing
Submission
of proposal
Literature
review
Methodology
data
collection
data analyses
draft
Submit
.
FINDINGS AND ANALSYES
Introduction
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This chapter presents data and interpreted the results. This section is beneficial in
reaching to end result about effectiveness of franchise strategy in order to successfully enter into
new location and establishing the branch in China.
Findings
Theme 1: Benefit of entering into new market for McDonalds
Enhance brand image 5
Increase profitability 6
Competitive advantage 3
Other 1
Interpretation: From the above table it can be interpreted that entering into new location has
many benefits for the organisation5 out of 15 respondents have said that it helps business in
raising its brand image. Whereas 6 out of 15 answerers have replied this is beneficial in order to
increase revenues of the enterprise to great extent. On other hand 3 out of 15 participants have
said that it helps in gaining competitive advantage to the firm. From the above data it can be
interpreted that entering in new market enhances opportunities for the McDonalds.
Theme 2: Globalisation has created necessity/ opportunities for business to expand their
operations in other countries
Strongly agree 5
Agree 7
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Disagree 2
Strongly disagree 1
Interpretation: From the above table it is identified that 5 out of 15 answerers have replied that
they are strongly agreed that globalisation has created urgency for business to expand their
operations in other nations. Whereas 7 out of 15 respondents are agreed that globalisation has
created opportunities for the firm to successfully establish their branches in other geographical
areas as well.
Theme 4: franchise market entry strategy has articulated a vision for McDonalds
Yes 12
No 3
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Interpretation: From the above data it is identified that 12 out of 15 answerers have replied that
franchise market entry strategy has articulated a vision for McDonalds. On other hand 3 out of
15 respondents have said that no, it has not articulated a vision for the organisation.
Theme 5: Current mission of McDonalds to establish the branch into China can be fulfilled
through Franchise strategy
Strongly agree 5
Agree 8
Disagree 1
Strongly disagree 1
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Interpretation: From the above study it is identified that 5 out of 15 respondents are here those
who said that they are strongly agreed that through franchise strategy McDonalds can establish it
branch into China successfully. On other hand 8 out of 15 answerers have replied that they are
agreed that current mission of firm can be fulfilled through this market entry strategy. Whereas 1
out of15 participants have said that they are disagreed that it is not possible for the company to
establish its branch into China by using franchise market entry strategy.
Theme 6: Challenges McDonald could face in China
Political issues 5
Economic issues 3
Social / cultural issues 6
Others 1
Interpretation: from the above data it is identified that 5 out of 15 respondents have viewed that
political issues are the major problem that create difficulty for the firm to establish in new
geographical areas. On other hand 3 out of 15 answerers have said that economic issues are
another major constrain in establishing a business in China through franchise strategy. Whereas 6
out of 15 participants have said that social and culture issues is the major challenges face by
companies.
Theme 7: Practical drawback of entering into new market
Enhance cost 7
Increase chances of failure into new 5
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geographical area
Impact on brand image 3
Interpretation: From the above graph it is identified that 7 out of 15 respondents have replied
that entering into new market enhances cost of business to great extent. If entity plans to enter
into new geographical location then it will have to take licence for the same and will have to
invest huge amount for establishing the branch into new location. Furthermore, 5 out of 15
answerers have viewed that if enterprise plans to go into new place then there is high chance to
failure because the firm is unaware with needs and preference of the local citizens. Whereas 3
out of 15 participants have said that it may impact on brand image as well, if McDonalds enters
into China and fail to make profit and satisfy needs of consumers then definitely it may
negatively impact on its brand image.
Theme 8: Benefit of franchise market entry strategy
Cost effective 4
Gain attention of local consumers 6
Standardisation 3
Protection of brand image 2
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Interpretation: From the above graph it is identified that 6 out of 15 respondents have replied
that franchise strategy is considered as most effective option for the firm that wants to enter into
new location. This helps in gaining attention of local consumes. By this way firm became able to
generate profit in the new country and that supports in establishing branch successfully. On other
hand 4 out of 15 answerers have replied that this is cost effective option because it firm takes
licence or merge with other firms then it may have to invest huge amount. But in franchise
market entry strategy McDonald will not have to spend such large amount thus, it is cost
effective option for the organisation. Whereas 3 out of 15 participants have viewed that franchise
strategy supports in improving standard of product and services in new market. 2 out of 15
answerers have replied that franchise is helpful in protecting brand image of company. As
enterprises gives franchise to such firms that have strong brand reputation in local market.
Theme 9: Why Franchise strategy is the best market entry strategy
Yes 12
No 3
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Interpretation: From the above detail it is identified that 12 out of 015 respondents franchise
market entry strategy is very effective in order to establish the branch in China successfully. On
other hand 3 out of 15 answerers have viewed that no, it is not an effective option because it
increases chances of failure of firm in new geographical area.
Theme 10: Benefit of franchise as compare to other market entry strategies
Low entry cost 4
Rapid expansion in foreign country 6
Simple expansion in distant markets 5
Interpretation: from the above graph it is identified that 6 out of 15 answerers have replied that
rapid expansion in foreign country is one of the major benefit of franchise market entry strategy.
This helps companies in entering into new geographical location in cost effective manner.
Whereas 5 out of 15 respondents have said that it is great option and effective way to expand in
distant markets. Whereas 4 out of 15 participants have replied that low entry cost is associated
with this strategy.
Summary
Q1
It is found that rationale of entering into Newmarket is to increase profit of business unit.
Furthermore, it supports in raising brand image of organisation and helps in getting global image.
Q2
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It is found that franchise strategy is most suitable and effective market entry strategy, as it
helps in entering into Newmarket in cost effective manner. Apart from this, risk is very low as
compare to other strategies.
Q3
It is analysed that globalisation is beneficial for business unit as it creates numerous
opportunities for organisation and firm can gain competitive advantage.
Q4
It is found that franchise articulates a vision for company and dealing with mass audience.
Q5
It is found that McDonald’s can easily establish its branch into China by using franchise
strategy. As this tactic support in minimising risk of business and establishing the branch in new
location in cost effective manner.
Q6
It can be summarised as China has different culture from UK, hence when company
enters into this market then cultural and social issues create problem for McDonald due to which
it may fail to establish its branch in this market successfully.
Q7
This can be summarised as globalisation enhance cost of company and it also increase
chances of failure of business. If firm plan to enter into new market, then due to social or cultural
issue it might get failed to raise profit there and it will increase its operational expenses as well.
Q8
It is found that through franchise strategy McDonalds can gain attention of local
consumers and can stablish its branch in cost effective manner.
Q9
Risk in franchise strategy is quite low as compare to other tactics such as joint venture,
merger etc. Furthermore, cost of franchise is low than other strategies then it is best method as
compare to other market entry strategies.
Q10
It is found that through franchise company can expand its business in foreign market
effectively and it is simple expansion method as well.
Q11
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It can be summarised as in franchise strategy company has to share its profit with other
firm to which it has given franchise hence it reduces profit of company. Apart from this
controlling cist is very high so firms have to manage it properly.
Q12
It is found that effective monitoring and research are the best tactics through which
enterprise can manage issues related to franchise strategy and can establish its branch in new
location effectively.
Analyses
From the above findings it is analysed that one of the major advantages of franchise
strategy is that it supports the firm in increasing its revenues. By this way it will be able to
sustain in market for longer duration. If McDonalds fails to expand its operations then it may
create difficulty for the organisation in order to gain competitive advantage and sustain in market
for longer duration. Every business always tries to enter into new market so that it can enhance
its number of consumers and can become the global brand. This is beneficial in order to make
connection with mass audience and offering products and services globally.
Franchise strategy is the great option that motivates management in establishing their
branch in other geographic location successfully. It is essential for companies that to expand
their business across the world and franchise is the great option that may help in speedy growth
of firm. As by implementing this strategy marketers can gather information market leadership
position of McDonalds and can make establishment plan accordingly. Franchising gives benefit
to the firm to compete with other organisations. By this way firms can saturate markets easily. It
is analysed that Franchise option is beneficial in term of staffing leverage and easy supervision.
One of the great benefits of applying franchise strategy is that it provides pre-opening support to
the business. By this way firms can establish their branch in the new location efficiently. Now
each business have chance to enter into new location and provide products and services to the
citizen of that region. This makes them able to increase demand of goods and enhance
profitability of business unit to great extent. It is analysed that Globalisations have increased
chances for companies to work in new nation and provide services to the citizens of that nation.
This helps the firms in gaining attention of mass audience and gaining competitive advantage as
well.
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From the above detail it is analysed that franchise market entry strategy is helpful in
expressing vision of business unit significantly. The main agenda of McDonalds is to provide
luxurious services to its guests. It wants to enhance its profitability and wants to become the
leading fast food brand in this industry. Implementation of franchise market entry strategy has
supported in taking action to meet with its goal. By this way firm has become able to fulfil its
target. Franchise is beneficial in order to establish the branch in other nation. This gives
advantage to enter into new market in cost effective manner. In this option, enterprise needs not
to pay anything to enter into new location thus, it helps in maintaining cost of business unit.
Each country has its own situation. It is essential for the companies that to conduct
research about nation before entering into the location. One of the major problems is that people
of China have different needs and perception. It is essential for the company that to understand
their taste and requirement accordingly provide them food services. It is analysed that as local
companies have good knowledge about needs of citizens thus, they can offer them services as per
their desires. This is the best way through which McDonalds can establish its office in China
successfully and can generate profit in this location significantly. Entering into new location is
such as risky task. It is very important for firm that to conduct market research about
geographical location and identify needs of local people. This may help in offering them
satisfactory goods and services and they will be satisfied with brand. Otherwise McDonalds will
have to bear huge loss. Thus, by giving franchise to such firm entity become bale to gain
attention of local consumers. This is bifocal in order to raise profitability of business and
establish branch in new location successfully. From the above detail it is analysed that franchise
is the great strategy that help organisation in successfully establishing the branch in new location
and increasing profitability of the firm to great extent.
Selecting the option of franchise is the most significant way of establishing branch in new
location. McDonalds is working in many other countries. It always concentrates on needs and
taste of consumers and accordingly offer them services. By giving franchise to the local retailer
it would be able to know consumer perception of local citizens. This will help in attracting more
people towards the brand. People by get their satisfactory goods and services that will enhance
their trust on business unit. Furthermore, McDonald will not have to invest such large amount
because firm that is taking franchise is already working at that location. Hence, McDonalds
would get benefit of establishing the branch in China by implementing Franchise strategy. It is
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analysed that McDonald’s can get benefit of cheaper labour market and high population. This
would help in making connection with large population and increasing its sales revenues to great
extent. Furthermore, franchise is cheaper as compare to other strategies and risk is also low as
compare licensing and other strategies.
From the above details it is analysed that franchise strategies are very effective because it
supports business to establish their branch in new location successfully in low cost. Franchise
market entry strategy is not good because it creates difficulty for the firms to manage their
operations and gaining expected profit. As brand will have to share their profit with franchisor
and company will not be able to get expected return on their investments. If management
provides support to McDonalds, then it would be able to offer satisfactory fast food services to
consumers as per their taste and preferences. This is the best way that may make people positive
towards brand and they will buy its services frequently. It is analysed that market research is the
best way of managing operations in new location and controlling over problems associated with
conducting operations in global market.
CONCLUSION
From the above research it can be concluded that McDonalds is fastest growing firm, that
aims to expand its business across the world. China is the country where population is very high
and also its GDP rate is also high. Over a period of time many companies have planned to enter
into China. Franchising is the most effective and suitable solution for business to establish their
branch in new location. Franchisors make connections with big organisations and convinced
them to enter into their country. Franchise is highly advanced strategy of licensing. In this
option company has benefit of getting support from suppliers. From the literature review and
data analyses it has been analysed that domestic franchisors continuously work to raises sales of
company. For raising demand of products franchisors implements commercial activities that
helps companies in establishing their branch in new location successfully. One of the main
advantages of implementing franchise option is that entry cost of this strategy is very low.
Furthermore, it supports in rapid foreign expansion of business. As McDonalds is the leading fast
food firm and always concentrates on needs and preferences of consumers. Through franchise
strategy it would be able to establish its restaurant in China successfully.
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From the above detail it is identified that international market entry mode is considered as
most challenging task for the companies. Each firm aims to enter into new geographical location
due to several issues it fails to accomplish this goal successfully. For establishing business in
new geographical location enterprises have to invest huge amount and it expects to get high
return over its investment. China is the most targeting place because of high population.
McDonalds aims to raise its profit and provide quality services across the world. Economic
condition of China is good and fast food industry is growing well in this sector. Now China has
become the WTO’s member thus, foreign companies can easily enter into this location and can
establish this business with fewer restrictions. Franchise is considered as marketing oriented
method for selling services and products of firm to other location. This option has supported
business in order to raise their profit and develop brand image across the world.
From the above study it can be articulated that franchise provides opportunity to the
companies to expand their business in new market. By implementing this strategy firms can get
knowledge about local market and can analyses needs of local population. This aids them in
offering satisfactory goods and services to consumers as per their requirements. As low risk and
low cost is associated with this market entry strategy. If McDonalds implements this strategy
then it would not have to search a lot and company will be able to reduce risk of establishing a
firm in completely new geographical location.
RECOMMENDATIONS
 Company should conduct market research before entering into new market and according
to legal and political situation of location it has to select its market entry strategy.
 McDonalds should use social networking sites so that it can develop relationship with
local consumers, this will help in establishing branch in new location successfully.
REFLECTION
Lesson learnt
While conducting this study researcher has learnt many things. This investigation has
improved knowledge of scholar about various market entry strategies and their suitability for
business. Use of primary, secondary data collection sources has improved searching skills of
individual to great extent. Now investigator is able to conduct study in the future more
significantly. Furthermore, conducting research on marketing entry strategies have helped the
person in improving communication skill, as scholar had to coordinate with managers those who
23

are working in McDonalds. Individual has convinced them to participate in this research by
sending consent form. This has improved written and oral communication skill.
This investigation has developed technical skill of researcher. As now individual is able
to use Microsoft word, excel effectively and can draw presentable graphs. But still Individual
believes that there is need to improve technical skill little more, as now researcher is unable to
use advance software such as SPSS etc. effectively. In addition, there is need to work on
reasoning skills as well.
The main aim of the research project was to identify impact of implementing franchise
market entry strategy on McDonald’s to enter into China successfully. In order to achieve this
objective, researcher has taken assistance of interpretivism philosophy. This is most suitable
technique because scholar has become able to involve correct theories and model related to
subject matter.. Thus, use of interpretivism was suitable for present study, as it has helped in
gathering real views of participants that is why individual has become able to answer research
questions significantly. Furthermore, this research has taken support of inductive research
approach. This technique was suitable for identifying impact of franchise market entry strategy
on McDonalds. Inductive approach aids in detail observation and developing empirical
generalisations. By this way individual has become able to analyses situation efficiently.
For gathering information related to franchise market entry strategy, researcher has used
primary and secondary both data sources. Individual has involved books, journals, internet
articles in order to develop understanding about subject matter. Furthermore, questionnaire tool
has been implemented; scholar has involved managers of McDonalds in order to identify their
point of view about advantage and disadvantage of franchise market entry strategy. This has
supported in finding actual answers and drawing valid conclusion. Furthermore, random
sampling technique has been used for analysing effectiveness of franchise market entry
technique. This sampling process was beneficial in order to minimise issues of biasness. This has
aided in minimising errors and it is also easy to assess.
Alternative research methods
In the current research project scholar could use positivism philosophy, it would give
benefit of framing hypotheses and testing these hypotheses. This will have benefit in order to
generate more authentic results. Research could use SPSS for analysing data. Use of regression,
mean, mode, median etc. will give opportunity to find out actual impact of franchise strategy on
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McDonalds. Researcher could use purposive sampling technique, by this way individual would
be able to involve such participants those who can give actual and correct information about
topic.
Questionnaire is the best method through which I have become able to collect insight
detail about effectiveness of franchise strategy. But I have realised that sometimes people give
wrong or unclear answers. But it helps in getting realistic figures which aids in answering
research question in significant manner and achieving objective of research.
25

REFERENCES
Books and Journals
Cavusgil, S. T. and et. al., 2014. International business. Pearson Australia.
Guthrie, G., 2015. Culturally grounded pedagogy and research methodology. Compare: A
Journal of Comparative and International Education. 45(1). pp.163-168.
Hollender, L., Zapkau, F. B. and Schwens, C., 2017. SME foreign market entry mode choice and
foreign venture performance: The moderating effect of international experience and
product adaptation. International Business Review. 26(2). pp.250-263
Keutmann, M. K. and et. al., 2015. Generating an item pool for translational social cognition
research: methodology and initial validation. Behavior research methods. 47(1). pp.228-
234.
Kotabe, M. and Helsen, K., 2014. Global marketing management.
Lee, Y. K. and et.al., 2015. Market orientation and business performance: Evidence from
franchising industry. International Journal of Hospitality Management. 44. pp.28-37.
Murshed, F. and Zhang, Y., 2016. Thinking orientation and preference for research
methodology. Journal of Consumer Marketing. 33(6). pp.437-446.
Silverman, D., 2016. Qualitative research. Sage.
Simmons, B. and Watson, D., 2015. From individualism to co-construction and back again:
rethinking research methodology for children with profound and multiple learning
disabilities. Child Care in Practice. 21(1). pp.50-66.
Taylor, S. J., Bogdan, R. and DeVault, M., 2015. Introduction to qualitative research methods: A
guidebook and resource. John Wiley & Sons.
Online
Franchise your business. 2018.[Online]. Available through <
https://www.nibusinessinfo.co.uk/content/advantages-and-disadvantages-franchising-
your-business>
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APPENDIX
Consent form
Full Title of study: Effectiveness of franchise market entry strategy for establishing branch in
China successfully
Name of principal investigator:
I confirm that I have read and understand the subject information sheet dated…….
version……..for the above study and have had opportunity to ask questions which have been
answered fully
I understand that my participation is voluntary and I am free to withdraw at any time without
giving any reason, without my medical care of legal rights being affected.
I understand that sections of any my medical notes may be looked at by responsible individual
from company where it is relevant to my taking part in this research. I give permission for these
individuals to access my records that are relevant to this research.
The compensating arrangement have been discussed with me
I agree to take part in above study.
Name of participate
Signature
Date
Name of person taking consent
Signature Date
Principal investigator
Signature
Dated
Information sheet
Title:
"Effectiveness of franchise market entry strategy for establishing branch in China successfully”.
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




Invitation
You are invited to participate in a research on effectiveness of franchise market entry strategy for
establishing branch in China.
Study is conducted by………
1.What is the study about?
Study investigates the effectiveness of franchise entry strategy for the companies. What issue
might be created by it and how this can help the McDonald in entering into new market
successfully.
2.why have I been invited to participate in the study? Do I have to take part?
For this study managers of McDonald’s are selected, as they have good knowledge about
expansion plans and effectiveness of strategies hence thy can give more suitable answers about
topic. Participation of these individual was completely voluntary and researcher has not forced
any one for answering these questions.
3. What does the study involve?
Participants will be part of questionnaire, they will send a questionnaire on personal meeting and
they will have to spent three hours. All participants will be arranging properly and
systematically. No respondent will be offer any gift voucher.
4.What are the possible risk and benefit of participation?
Distress is the major risk, it is quite possible that during answering that question person feel
hectic and take stress, at that time they will get immediate consultancy from Uniting care staff.
they will get immediate services so that they can deal with such stress properly. Hence safety of
person will be done on priority bases.
Questionnaire
Name
Age
Gender
What is the benefit of entering into new market for McDonalds?
 Enhance brand image
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 Increase profitability
 Competitive advantage
 Other
What is the most effective and suitable market entry strategy for company?
 Franchise
 Licensing
 Joint venture
 Merger and acquisition
Do you think that globalisation has created necessity for business to expand their operations in
other countries?
 Strongly agree
 Agree
 Disagree
 Strongly disagree
Has franchise market entry strategy articulated a vision for McDonalds?
 Yes
 No
Do you think that current mission of McDonalds to establish the branch into China can be
fulfilled through Franchise strategy?
 Strongly agree
 Agree
 Disagree
 Strongly disagree
What are the challenges McDonalds could face in China?
 Political issues
 Economic issues
 Social / cultural issues
 Others
What kind of practical drawback of entering into new market?
 Enhance cost
 Increase chances of failure into new geographical area
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 Impact on brand image
What is the benefit of franchise market entry strategy?
 Cost effective
 Gain attention of local consumers
 Standardisation
 Protection of brand image
Do you think that franchise market entry strategy is helpful for McDonalds in establishing branch
in China?
 Yes
 No
Why is franchise the best entry strategy?
 Low entry cost
 Rapid expansion in foreign country
 Simple expansion in distant markets
Drawback of franchise market entry strategy for McDonalds?
 High controlling cost
 Sharing profit
 Maintaining uniform standards
How issues related to franchise market entry strategy can be resolved by McDonalds?
 Effective monitoring
 Effective market research before giving franchise to the firm
 Better management support
 National and regional advertising
Ethics Form
Research Ethics Form
Research proposal form Student ID
Student name Date: 27/11/2018
Tutor
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Unit
Proposal title: Impact of implementing franchise market entry strategy on business to enter into
China successfully
Section 1 : Title, objective, responsibility
Research aim: “To identify impact of implementing franchise market entry strategy on business to
enter into China successfully: A Study on McDonalds”
Research Objectives
 To understand conceptual framework of globalization and its impact on business
 To explain types of market entry strategies for business
 To analysis relationship between franchise market entry strategy and establishment of
McDonalds in China.
 To determine factors that create issue for McDonalds to enter in global market
Research questions
 What is the meaning of globalization?
 What are the major market entry strategies for business?
 What is relationship between franchise market entry strategy and establishment of
McDonalds in China.?
 What are the factors that create issue for McDonalds to enter in global market?
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Section Two: Reason
Researcher has selected the topic because individual has huge interest in this type of
subjects that are related with business growth. Researcher has experienced of working in fast
food industry in Romania thus, scholar would be able to understand terms easily. That is why
researcher has selected this topic. Furthermore, globalization is the essential and burning
topic; many companies are working hard for global expansion. Thus, this researcher is very
important and will help investigator in developing their knowledge
Section Three: Literature sources
Cavusgil, S. T. and et.al., 2014. International business. Pearson Australia.
Hollender, L., Zapkau, F. B. and Schwens, C., 2017. SME foreign market entry mode choice and
foreign venture performance: The moderating effect of international experience and product
adaptation. International Business Review. 26(2). pp.250-263
Kotabe, M. and Helsen, K., 2014. Global marketing management.
Section four: Activities and Time scale
Activities Week
1
Week
2
Week
3
Week
4
Week
5
Week
6
Week
7
Week
8
Week
9
Selection of
research
topic would
be first
activity.
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Framing aim
and
objectives
Conducting
literature
review
Collection of
data
Data analysis
Meeting with
tutor
Drawing
final
conclusion
Receiving
feedback
from client
and
modifications
accordingly
Final
submission
33

Section five: Research Approach
 I will take support of interpretivism philosophy, it would help person in involving
theories to identify impact of franchise on business performance.
 inductive approach will be used. I will apply primary data collection sources and data
will be gathered through questionnaire technique
 Primary data collection sources assist in involving fresh details that have never been
used in any previous literature.
Comments and Agreement from tutor
Comments
I confirm that the project is not work which has been or will be submitted for another qualification
and is appropriate
Agreed
Name
Date
Section 2 Project Summary
Please select all research methods that you plan to use as part of your project:
Questionnaires:
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

35
Section 3: Participants
Please answer the following questions, giving full details where
necessary. Will your research involve human participants? Yes
Who are the participants? Tick all that apply:
Ages 12-
16:
Young People aged 17–
18:
Adults
:
How will participants be recruited (identified and approached)?
Answer: Through Random sampling participants will be recruited
Describe the processes you will use to inform participants about what you are doing: Through email
participants will be informed
How will you obtain consent from participants? Will this be written? How will it be made clear to
participants that they may withdraw consent to participate at any time? By sending written consent form
on their email ID
Studies involving questionnaires: Will participants be given the option of omitting questions they do not
wish to answer?
Yes
:
No
:
If No please explain why below and ensure that you cover any ethical issues arising from this
Studies involving observation: Confirm whether participants will be asked for their informed consent
to be observed.
Yes
:
No
:
Will you debrief participants at the end of their participation (i.e. give them a brief explanation of the
study)?
Yes
:
No
:
Will participants be given information about the findings of your study? (This could be a brief summary of
your findings in general)
Yes
:
No
:

Section 4: Data Storage and Security
Confirm that all personal data will be stored and processed in compliance with the Data Protection Act
(1998) Yes: No:
Who will have access to the data and personal information? Only senior authorities
During the research:
Where will the data be stored? In official computer
Will mobile devices such as USB storage and laptops be
used? Yes: No:
If yes, please provide further details:
After the research:
Where will the data be stored?
How long will the data and records be kept for and in what format?
Will data be kept for use by other researchers?
Yes: No:
If yes, please provide further details:
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Section 5: Ethical Issues
Are there any particular features of your proposed work which may raise ethical concerns? If so, please outline
how you will deal with these:
It is important that you demonstrate your awareness of potential risks that may arise as a result of your
research. Please consider/address all issues that may apply. Ethical concerns may include, but are not
limited to the following:
• Informed consent.
• Potentially vulnerable participants.
• Sensitive topics.
• Risks to participants and/or researchers.
• Confidentiality/anonymity.
• Disclosures/limits to confidentiality.
• Data storage and security, both during and after the research
(including transfer, sharing, encryption, protection).
• Reporting.
• Dissemination and use of your findings.
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Responses
https://www.surveymonkey.com/analyze/
xB8LNAwd6wHLIFl1_2BddvjtsYflwS8nRgChDyjxwGHQM_3D?tab_clicked=1
https://www.surveymonkey.com/results/SM-R7BVH3KZV/
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Section 6: Declaration
I have read, understood and will abide by the institution’s Research and Ethics
Policy: Yes: No:
I have discussed the ethical issues relating to my research with my Unit Tutor:
Yes: No:
I confirm that to the best of my knowledge:
The above information is correct and that this is a full description of the ethics issues that may arise in the
course of my research.
Name: .....................................................................................................................................................................
Date: ...................................................................................
Please submit your completed form to ......................................................................................................................................................................

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