Michelle's Patisserie: International Business Expansion Strategies

This report provides a comprehensive analysis of Michelle's Patisserie, an Australian bakery chain with international presence, focusing on its business strategy and expansion plans. The report examines the company's current operations, including its franchise model and product offerings, and identifies its expansion into countries like Indonesia, New Zealand, and China. It highlights the company's challenges, particularly in maintaining quality across its franchises and adapting to different cultural contexts, especially in the USA and Canada. The report explores the importance of understanding cultural influences and recommends strategies like joint ventures and employee training to facilitate successful international expansion. It concludes by emphasizing the need for Michelle's Patisserie to adapt its approach to effectively compete in new markets, considering the cultural nuances and competitive landscape of the target countries. The report also discusses the importance of effective communication and employee motivation to ensure quality and consistency across all outlets, critical for its continued growth.

Running head: MICHELLE’S PATISSERIE
International Business
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Overview of the Company
Michelle’s Patisserie is a bakery style food outlet which is Australia based. The company
also has outlets in countries like Indonesia, New Zealand and China. The delicacies which are
offered by the company to the customers include Cakes, Savories, Pies, various kinds of Coffees
and so on (Michels.com.au 2020). The company was established in 1988, which has grown
exponentially in the following years. It, now operates through 360 outlets, which are spread
across various locations in the country itself, where it has been able to expand its business except
for the Tasmania and the Northern Territory. The company has over 4000 employees who work
for the company and offer services to the customers (Michels.com.au 2020). Approximately. 9.5
million of cake slices and 36 million cups of coffee are serves to the customers every year by
Michelle’s Patisserie. The franchise network of the company is managed by Retail Food Group.
Plan of Expansion
Michelle Patisserie is a company which is based in Australia primarily. It has over 360
outlets, across the country. It also has been able to expand the business in countries like China,
New Zealand and Indonesia. However, the company identifies that the roadmap to success
requires expansion in newer countries and markets. Hence, it is intending to enter expand the
business in newer countries and enlarge the area of operation, customer base and revenue
generation in the international market (Lynch and Jin 2016). The company, thus aspires to scale
the business in a larger fashion to enter newer markets in United States of America and Canada,
where they find good opportunities. They intend to start their ventures in the western countries as
they are developed nations, and demand for bakery is very much infused with the culture in these
countries.

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Culture
The company is Australia based, where the culture is multi-cultural. It has been voiced by
many employees and customers alike that there has been numerous issues in the organizational
culture. The most common issue, which is being faced by the company and has also been
reported by Retail Food Group that there is lack of maintenance of quality. It is because the
employees are not that motivated to make the finished products which are offered to the
customers, with perfection and precision, which must be the intention in the food industry.
The employees are generally unhappy due to the sloppy structure of the organization and
ill management by the managers, as they are not competent to manage stores at many places
(Choi and Choi 2019). Even though Michele’s Patisserie has grown over the years and have been
able to set new shops, the company has not been able to meet standards through all the outlets,
which is a great drawback and affect the company’s plan of expansion. It is very important for
the supervisors or the head chef, in each outlet be aware and competent to manage the operations
and uphold values of the company in front of the customers by meeting expectations and
standards (Hasan and Nikmah 2020). It is unlike and often unexpected from Michelle’s
Patisserie. In a healthy company, it is important to maintain effective communication within the
system (Lynch and Jin 2016). The supervisors and managers should be taking feedbacks from
the workers in order to maintain positivity and participation, through which employees feel
accepted and valued, from which dedication towards the company develops (Hasan and Nikmah
2020).
The company is not familiar to the western culture, as opposed to the Eastern countries,
where they have expanded and set outlets in. It might be difficult to adjust and understand the
responses in the western countries. Therefore, the cultural influences are to be understood and

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aligned with the objectives of the company. In America, Starbucks, Gimme Coffee and Barista
are one of the renowned for their culture and offerings, which have been associated with the
western culture. Michelle Patisserie must understand the trends in order to develop the culture
and offer services and products which match the standard and practices, even within the
company to reflect it on the outside (Baumgartner and Rauter 2017). Canada is heavily
influenced by European cultures, which is quite different from Australia and USA, this must be
kept in mind while competing with brands such as Starbucks and Tim Hortons.
Strategy
Michelle Patisserie started the business with a European Chef who envisioned the
company’s progress through various offerings which included exquisite pastries and cakes to
delight the customers. The company has grown in the years to be one of the leading pasty and
cake brand in Australia, which also has been able to expand in countries like China, Indonesia
and New Zealand, even though, they are not as successful as the outlets in Australia as it is very
well spread in the host country. Michelle Patisserie emphasizes on creating the offerings freshly,
right in front of the customers and serve them fresh and hot. The brand has focused on
personalization and customization, which has been the forte and one of the primary reasons, for
being able to grow this big and expand in the market.
On the other hand, the company operates through Franchises. The stores are managed by
the Retail Food Group. It has been one of the greatest flaws for Michelle Patisserie, as it has
affected its operation due to lack of control over the entire operation. The company franchises
have more independence in their operation which has been the reason behind uncontrolled issues
related to quality and standardization (Tran 2018). This has affected the reputation for the
company, which is extremely crucial if the company intends to expand in other nations and

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enlarge the customer base. Franchising may pose severe challenges as costs can be higher with
very less control of operation, training and support (Gitman et al. 2018). The management which
has been effective for the company might not be same as the one which is followed by the
franchise, giving rise to odds and differences.
Recommendation
 Michelle’s Patisserie should intend to understand the cultural influences, in order to
develop their offerings in the countries, which will serve as a very important strategy to
be successful.
 The company should aim to adopt Joint venture style of expansion, which will involve
less risks (Harrigan 2017). It is already very risky to enter a new market in a new country,
joint venture will allow incorporation of ideas and strategies from another company
which is already recognized and knows the nuances of the country.
 It is very important to train the employees to be able to offer quality services. The
workforce, should have employees from the country of operation, which will allow ideas
and participation of people who knows the business and its expectations well and affect
the company positively in its growth.
Conclusion
It can thus be concluded by saying that Michelle’s Patisserie is doing extraordinarily well
in Australia, as they have been able to set up more than 360 shops in the country. However,
expanding in countries like USA and Canada might be challenging in the first place as the
business environment and culture are very different. The company should employ joint venturing
strategies to be able to succeed without involving too much of risks.

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Referencing
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Choi, G. and Choi, S., 2019. The effect of culture on organizational citizenship behavior, job
satisfaction, and organizational commitment: A meta-analysis. 농농농농농 농농농농농농, 51(3), pp.43-
72.
Gitman, L.J., McDaniel, C., Shah, A., Reece, M., Koffel, L., Talsma, B. and Hyatt, J.C., 2018.
Franchising: A Popular Trend. Introduction to Business.
Harrigan, K.R., 2017. Joint ventures and global strategies. In International Business (pp. 329-
338). Routledge.
Hasan, H. and Nikmah, F., 2020, March. The Effect of Organizational Culture, Organizational
Learning and Creativity on Employee’s Performance. In 2nd Social and Humaniora Research
Symposium (SoRes 2019) (pp. 456-460). Atlantis Press.
Lynch, R. and Jin, Z., 2016. Exploring the institutional perspective on international business
expansion: Towards a more detailed conceptual framework. Journal of Innovation &
Knowledge, 1(2), pp.117-124.
Michels.com.au, 2020. Michel's. [online] Michel's. Available at: <https://www.michels.com.au/>
[Accessed 6 April 2020].

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Tran, T.T.D., 2018. Using arbitration in resolving franсhise dispites: advantages and
disadvantages. In Сравнительно-правовые аспекты правоотношений гражданского
оборота в современном мире (pp. 690-699).