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ANHEUSER-BUSCH AND FRANCHISING IN SOUTH AFRICA

ANHEUSER-BUSCH AND FRANCHISING IN SOUTH AFRICA

Franchising can be an effective way for a company to enter a foreign market. Franchising shares the risk associated with such market entry, and brings experts into the marketing of the product. These experts are likely to be familiar with the destination country on a level that the company granting the franchise is not, and this decreases the learning curve associated with market entry. Whether franchising is right in any particular instance depends on the company, the industry, the product, and the country where the franchising is to take place. This research considers the use of franchising in general, the use of franchising in South Africa in particular, and whether franchising makes sense as a strategy for AnheuserBusch.

At its most fundamental level, franchising is merely "a method for distributing products or services". Franchises involve relationships between the franchisor (who provides the brand recognition and expertise in the product or service) and the franchisee, who markets the product in accordance with the franchise agreement ("What is Franchising?" 2005).

However, there are variations on the franchising concept which can be used in the international market, depending on the business environment within a particular region. Specifically, four strategies are commonly employed by international franchising operations: master franchisee, joint venture, licensing and direct investment ("What is Franchising?" 2005).

Under a master franchisee agreement, a single coordinating entity is set up which then establishes subfranchisees in addition to any franchises it owns itself. The master franchisee assumes the liability, but also reaps the benefit from the association. Master franchisees typically establish one or two stores and ensure their success before expanding their operation. If the master franchisee is working with subfranchisees, this approach permits t...

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ANHEUSER-BUSCH AND FRANCHISING IN SOUTH AFRICA. (1969, December 31). In LotsofEssays.com. Retrieved 06:53, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1689119.html