Growth and Expansion Expansion Strategies Single Service

Growth and Expansion

Expansion Strategies Single Service Single Location Multisite Multiservice Focused service: * Dental practice * Retail Store * Family restaurant Clustered service: * Stanford University * Mayo Clinic * USAA Insurance Focused network: * Federal Express * Mc. Donald’s * Red Roof Inns Diversified network: * Nations Bank * American Express * Arthur Andersen

Franchising n n Benefits to the Franchisee Management Training Brand Name National Advertising Acquisition of Proven Business Economics of Scale Issues for the Franchisor Franchisee Autonomy Franchise Contract Conflict Resolution

Multinational Development n n The Nature of the Borderless World (Triad) Customers - information has empowered Competitors - nothing stays proprietary Company - fixed costs require large markets Currency - become currency neutral Country - deprive competitor of home market Planning Multinational Operations Cultural Transferability Network Development Host Government Policy

International Strategic Service Vision Target Market Service Concept Operating Strategy Service Delivery System --culture --labor market --technology --industry structure --perceptions of value --managerial practices --operating premises --demographics --expectations --language --usage patterns --labor market norms and customs

Considerations in Selecting a Global Service Strategy Global Service Strategies Globalization Factors Multicountry Expansion Importing Customers Follow Your Customers Service Unbundling Beating the Clock Customer Contact Train local workers Develop foreign customers Customization Specialize in front- or backoffice service components Meet segments’ needs better Information Intensity Usually a standard service Usually routine Satellite network Develop foreign language & cultural sensitivity skills Strategic opportunity On site advantage Cultural Adaptation Modify service Modify Opportunity for operations focus Move May require experienced heavy capital managers investments Could be Manage worker necessary to diversity achieve scale Hire local Reduced labor personnel costs Inadequate Merchandise infrastructure unbundled component Provide extended hours of service More need for reliability & coordination Time compression Exploit opportunity Complexity Labor Intensity Other Reduced labor costs Government restrictions Accommodate foreign guests Increased labor costs Logistics management Re-prototype locally Common language necessary Reduced labor costs Capital investments

Fed. Ex Acquisition of Flying Tigers n n Describe the growth strategy of Fed. Ex. How has this strategy differed from those of its competitors. What risks are involved in the acquisition of Tiger International? In addition to the question of merging Fed. Ex and Flying Tiger pilots, what other problems could be anticipated. Suggest a plan of action for Fred Smith to address the acquisition problems.