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Case StudyJiaying Hong, Evelyn Garcia, Tim Okay, Joshuan Juan, Amber Presley & Justin
Yoder
1
Argentina, Spain, and England
2
History
3
Spain England● Spain is originally known as
the Kingdom of Spain.● The official language of Spain
is Castilian Spanish.● Spain was originally inhabited
by Celts, Iberians, and Basques, and became a part of the Roman Empire in 206 B.C.
● In 1492, Ferdinand V of Aragon and Queen Isabella paid for Christopher Columbus to explore the west in search of a new route to India. Columbus landed on one of the islands of the Bahamas by mistake. His mistake made Spain one of the richest nations in the world for a time.
Argentina● England came into being in
the 10th century and was originally settled by a group of people known as the Angles
● The medieval period is one of important parts of the history of England. Many battles took place during this period including the Hundred Years' War. The Magna Carta was also signed during this time era.
● In 1707, England and Scotland decided to merge into what is now the United Kingdom of Great Britain.
● First explored in 1516 by Juan Diaz de Solis, Argentina developed slowly under Spanish colonial rule.
● In 1929, the Great Depression began to shatter the nation's economy.
● Argentina's urban areas have a European look, reflecting the influence of their European settlers and old Spanish heritage in the cities around a main square called a plaza.
Culture
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● Spain has an extraordinary artistic heritage.
● The family is the basis of the social structure
● People are generally warm and close physically in communications
● Spaniards place great importance on the character of the person with whom they do business.
● Pub are a major part of england culture. This is where community gathers to eat, drink, and socialize.
● Social etiquette is very important.
● Unlike many European cultures, the British enjoy entertaining in people their homes
● Englander are quite formal and prefer to do business with people they know.
EnglandSpainArgentina● Culturally and
emotionally, Argentines often seem more European than Latin American
● Family and honor are strong values
● Communication is open, blunt, and direct
● Relationship driven culture
● People are generally warm and close physically in communications
Religion
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Argentina● Roman Catholic (70-
90%)
● Other variations of Christianity
Spain● Majority of population
is Catholic (%).
● There are also smaller portions of the country that practice Judaism, Hinduism, Islam, and Protestantism
England
● Official religion Christianity (59%)
● No Religion - (25%)
● Muslim (4.8%)
● Other ( 4.8%)
Sports
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Argentina
● The most popular sport in argentina is soccer and it has become a part of the argentine culture.
● Other sport include basketball, baseball, rugby and tennis.
Spain
● Soccers is the most
popular in spain. Spanish
premier league is
considered to be one of
the world's best
competitions
● Other sport in spain
include basketball, tennis,
bullfighting and Formula 1
England● Sports play a prominent
role in english life.
● Their most watch sport
are Soccer, cricket and
rugby.
● Other sport include ice
hockey, field hockey,
basketball, lacrosse and
baseball.
Alcohol Consumption
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EnglandSpain● Legal drinking age is 18● Average consumption of
alcohol per capita is 9.3 liters.
● Drinkers only - alcohol per capita is 15.3 liters.
● Legal drinking age is 18● Average consumption of
alcohol per capita is 11.2 liters.
● Drinkers only - alcohol per capita is 16.4 liters.
● Legal drinking age is 18● Average consumption of
alcohol per capita is 11.6 liters.
● Drinkers only - alcohol per capita is 13.8 liters.
Argentina
http://www.who.int/substance_abuse/publications/global_alcohol_report/profiles/gbr.pdf
Appeal Of American Food
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Spain EnglandArgentina● Very high appeal of
american food. ● The British love the
convenience, and affordable American restaurants.
● America represented fun, freedom and rock 'n' roll from British perspective.
● High appeal of American food.
● Most of the popular American restaurants serve burgers.
● Most of these restaurants located in cities, such as Barcelona and Madrid.
● American burgers and BBQ ribs are the popular in the American restaurants.
● Most of these restaurants located in cities.
Chicken Consumption
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Spain EnglandArgentinaThe average person consumed
31.24 pounds of chicken in Spain.
Pork is the most consumed meat in Spain, tender chicken is most often served in major cities and town.
The consumption of fresh chicken meat in Spain has decreased from 667.7 million kilograms in 2003 to 636.8 kilograms in 2014. According to the researchers at University of Extremadura have predicted chicken consumption is likely to overtake beef up to 2016.
Post forecasts 2016 domestic broiler consumption to remain stagnant at 94.8 kg per capita.
Beef is the most popular meat.
Argentina is a relatively new presence in the world poultry market and now ranks eighth in production after the United States, China, Brazil, EU, India, Mexico and Russia
● The average chicken consumption per capita is 50.7 pounds in England.
● The Family Food report figures show chicken became a more popular meat than beef for the first time in 2011.
Ready Supply of Chicken
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Argentina Spain England
● Spain produced 1209.1 thousand tonnes of chicken. There are 7,200 registered farms in Spain producing broiler chickens and of these, 5642 produce broilers.
● Spanish consumers regard poultry meat as a cheap protein source and show a strong preference for fresh chicken over frozen for both parts and whole chicken.
● The British poultry meat industry produces around 875 million chickens, with over 2,500 poultry farms across the UK and around 30 food productions sites and slaughterhouses.
● The chicken industry is heavily regulated in England, so more consumers prefer lamb over chicken for lower price.
● Ministry of Agriculture equivalent to USDA)
● Frozen chicken meals, chicken nuggets and chicken burgers. Are popular in Argentina.
● Consumer in Argentina prefer to purchase the whole chicken beside the parts.
Retail Food Market
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● The grocery market accounts for 50.2% in every £1 of UK retail sales
● Combined market share of food and non-alcoholic drinks of the largest four food and drink retailers was 58% in 2013; down from 62% in 2012.
● As an average, Argentines spend about 33 percent of their income in Food & Beverages.
● Quality of raw materials used by restaurants is a priority.
EnglandSpainArgentina● Spanish consumers will
likely increase their spending on grocery products.
● Economic growth will contribute to Spaniards spending more time outside of their homes, socialising at cafes and bars, which should benefit the foodservice channel to the detriment of retailing.
GDP per capita
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England - $40,327 to $40,933 (+0.015%)
Total GDP - $2.679 Trillion
Spain - $29,595 to $30587 (+0.034%)
Total GDP - $1.615 Trillion
Argentina - $20200 to $20500 (+0.014%)
Total GDP - $972 Billion
Export.gov
Middle Class
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Spain
Spain has 21 million middle-class adults that accounts for 55.8 percent of all. The wealth of $2.2 trillion held by them represents 52.4 percent of country wealth and 0.9 percent of world wealth.
Argentina England● Middle class as grown
the most in Latin American, doubling in ten years
● 32.5% of population in 2011
● American Development Bank reports 54.5% of households are now considered middle class
● Upper middle class - Roughly 25% of society. They hold managerial positions, professional jobs, usually college educated.
● Lower middle class - Traditional working class & service sector 54%. Electricians, cleaners, servers, chefs, aircraft pilots.
Labor Regulations
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EnglandSpainArgentina● Minimum wage is $572.40
per month which is around $2.99/hr
● Regular work week 48 hours per week any exceeding hours are 1.5 times payrate
● “13th Month Salary”● Extended paid leave for
non work related accident and disease from 6 to 12 months
● Labor freedom ranks as “Repressed”
● Foreign investments must comply with all European union standards & Spanish Policy.
● Franchise Disclosure Act:● Must transfer all legal
documents into spanish. ● Must comply with Spanish
code of conduct.● Must disclose any
information about company that Spanish Government deems necessary
● Labor freedom ranks as “Moderately Free”
● Minimum wage is on a age grading scale until 25years old
● Minimum wage is $7.20/hr for people 25year and older
● Maximum working hours 48 per week
● Most workers are entitled to 5.6 weeks of paid leave per year
● Labor freedom ranks as “Mostly Free”
Market Infrastructure
15
Argentina Spain England● 2016 Economic Freedom Score:
43.8 (down 0.3 point)● Global Ranking: 169th● Freedom From Corruption
Score: 34.0● Investment Freedom Score: 30.0● 6.3% Tariff Rate● Non-tariff and foreign
investment restrictions make for a difficult trade and investment climate
● State interference and state-owned banks contribute to economic uncertainty
● 2016 Economic Freedom Score: 68.5 (up 0.9 point)
● Global Ranking: 43rd● Freedom From Corruption
Score: 60.0 ● Investment Freedom Score: 85.0 ● EU members have a 1% average
tariff ● tariff with other countries are
currently under negotiation ● Spain generally treats foreign
and domestic investors equally under the law
● 2016 Economic Freedom Score: 76.4 (up 0.6 point)
● Global Ranking: 10th● Freedom From Corruption
Score: 78.0● Investment Freedom Score: 90.0● EU members have a 1% average
tariff ● tariff with other countries are
currently under negotiation ● The United Kingdom generally
treats foreign and domestic investors equally under the law
Political Environment / Risk
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SpainArgentina EnglandCountry Risk Rating:C - Below Acceptable Risk
A very uncertain political and economic landscape. Could have major impact on corporations.
Business Climate Rating:C- Below Acceptable Risk
Financial information is often inaccurate and unavailable.
Country Risk Rating:A4 - Slightly above acceptable risk.
Shaky political/economic environment can lead to inconsistent payments.
Business Climate Rating:A1 - Very Low Risk
Business information is available and consistent.
Country Risk Rating:A2 - Low Risk
Political & economic landscape is very stable.
Business Climate Rating:A1 - Very Low Risk
Debt collection is consistent and financial information is reliable.
http://globaledge.msu.edu
SpainPros
No religious food restrictionAverage of 14 days to start a businessHigh sport cultureLarge population
Shrinking Middle Class Tapas bar culture Unemployment remains high US companies make up 4.8% of all FDI in
Spain. (2014)
Low productivity of its manpower
Complexity of the regulation system
Index of Transaction Transparency of 5.0 whereas US is 7.0
Index of Investor Protection of 5.0 whereas US is 8.3
Cons
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EnglandPros
Has world's fourth largest recipient of direct foreign investment (FDI).
US companies make up 41.5% of all FDI in England. (2014)
Low Taxation: Corporation Tax Rate is 20%
Average of 4.5 days to start a business.
London is financial capital of Europe
Low minimum wage
Pub CompetitionYou must register for VAT (Value Added
Tax) if you expect to make more than 83,000 British Pounds
VAT Standard Rate is about 20%Number of procedures involved in starting
a business can make the process laborious for businesses.
Takes around 100 hours per year to complete tax obligations.
High level of competition from foreign companies.
Cons
18
ArgentinaPros
Ranks 4th amongst the South American countries in terms of FDI Stock
Main investors in Argentina are US, Spain, France
Definite assets in its natural resourcesWorkforce is highly skilled and competitiveUS companies make up 24% of all FDI in
Argentina. (2014)
Consumption of Alcohol is high
Sports are heavily watched and celebrated
Business climate is rather poor and country ranks 121st out of 189 economies
Low FDI Inward Flow; declined by 60% in 2014
Fragile and undercapitalised banking sector
High rate of Inflation
Index of Transaction Transparency of 6.0 whereas US is 7.0
Index of Investor Protection of 4.7 whereas US is 8.3
Cons
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Solution England
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SolutionHighest GDP per Capita
→ Large amount of disposable income & large middle class.
Large Sport Culture
→ Many soccer clubs and very dedicated fan base.
Appeal of American Culture
→ Influx of American companies has changed English culture.
Alcohol Consumption
→ Drinking age is 18 & high consumption volume.21
Entry Mode - FranchisingPros
Easy expansion capital
Minimized growth risk
Purchasing power
Ongoing help and support.
Scalability
● Initial and continuing fees
Less control
Lost control of Franchises success
Ongoing cost and expenses
Most of the revenue goes to franchisee
Cons
22
Entry Mode - Joint VenturePros
Access to new markets and distribution networks
Increased capacity
Sharing risks and costs with a partner
Access to greater resources
Objectives and goals may not necessarily be clear and communicated to everyone involved.
Different cultures and management styles
Partners may not provide sufficient leadership and support.
Cons
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Entry Mode - Wholly Owned SubsidiaryPros
Advantage of operation and strategic control of parent company.
Easier to establish common operating processes
Less risk of losing intellectual property
Completely owned by another company.
Subject to corporation tax
Expensive undertaking
Takes time to establish relationships with suppliers and customers
Cons
24
Entry Strategy
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Entry Mode Decision: Franchising.
Reason: Easy expansion capital and minimal growth risk are reasons why we decided to choose Franchising. Also, starting a franchise is not much of a strenuous process, and it receives ongoing help and support from Franchisee.
The risks associated with Joint venture and wholly owned subsidiary outweighed the benefits.
Target Customers
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Upper Middle Class - Average annual income € 89,000 to € 124,000
Established Middle Class - €45,000 to € 89,000
Lower Middle Class - € 21,000 to € 45,000
Sports Fans
Beer Enthusiasts
Families
Competition
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Recently opened one restaurant in Nottingham, England
Rating: 4.0 stars by guests
Learn from their mistakes
Biggest complaint is lack of atmosphere
Popular American Sports Bar chain in England
Already localized and has a following
Food is typically viewed as “poor quality” by customers
Several local pubs, bars, and restaurants
Price for alcohol and food is well liked
Lacking variety of beers
Live music plays when sports are not on
Potential Locations - 1Manchester United F.C. (Manchester)
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Arsenal F.C. (London)
Chelsea F.C. (London)
Liverpool F.C. (Liverpool)
England Rugby (London)
Potential Locations - 2
Location: London
2,100 Sq Ft.
Renovate property to match American design but also keep Local touches
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Location: London
3,900 Sq Ft.
Modern, large space. Similar appeal to American BWW. Great location, parking, and outside seating
Location: Nottingham
2,750 Sq Ft.
In a shopping center, high foot traffic, trendy, high quality area
Supply Chain Introduce unique cuts of meat
→Connect with local slaughterhouses to process primal cuts of meat according to customer specification
Introduce exotic condiments and spices to local customers
→ Source condiments and spices from Asia, Middle East, and Africa
Farm to fork became a popular trend in the industry
→ Source meat and fresh,seasonal vegetables for salads directly from farms 30
Adaptation to Local Tastes/CustomsUpdated beer list so it is more suited to local tastes and trends.
Miller lite, Bud Light, Ect.. → Local Craft Brews (English/American)
Tailor wine list to the more educated market.
(California/ Other American Wines) → (French, Spanish, Italian)
Change Liquor drinks to cater to a local taste. Ex) Create a local soccer club themed drink.
Keep food menu the same because of the appeal of American Food.
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Marketing Strategy
32
Implement a loyalty Program:Buy “x” types of beer get one
freeWeekly Promotions:Wednesday €.50 wing day Local Sport Team Incentives:When “team” scores a goal;
get a free liquor shot.
cv
Introduce new items on the menu:● Add a new wing sauce or
fish and chips for a local feel
Variety of local and imported beer and wine:● Wine is largely consumed
Atmosphere - Customer Centric:● Localize with sports decor
Marketing Strategy- Prices
33
Wings
6 wings = £ 6.3710 wings = £ 8.9720 wings = £ 15.95
Burgers
Burger average price = £ 9.98Price range = £8 - £
13.95Double patty with cheese
= additional £4.00
Beer
DraftPint = £4.90 - £5.50Half = £2.70 - £3.10
Bottled£4.80 - £5.50
Can£3.95 - £4.75
Local AdvertisingSport Listing
Advertise what sport will be shown on a weekly basis.
Billboard
● Simplified way of targeting a large and diverse market. Continuous exposure for a short period of time.
Local TV ads
● Run campaigns that highlight family oriented atmosphere with a sport driven environment.
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Credit35
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