Question

Randy has established a successful fast-food restaurant chain named randy’s in the united states. He currently has 12 locations across three states. He’d like to expand his brand to asia, but does not have the capital to do so. He’s also wary of the risk of failure, especially because he is not very familiar with business in asia. If you were consulting randy, what route would you advise against?.

Answer 1

I would advise Randy against starting a wholly owned subsidiary due to the high capital required and high risk, recommending instead to consider franchising or other strategies like joint ventures or targeted marketing leveraging the American Dream appeal.

Step-by-step explanation:

Considering Randy's successful fast-food chain in the United States and his interest in expanding to Asia, we should evaluate his situation carefully. His concerns about the lack of capital and unfamiliarity with the Asian market are significant. One approach I would advise against is establishing a wholly-owned subsidiary. This move requires substantial capital investment, involves high risk due to a lack of local market knowledge, and does not mitigate the potential for failure. Instead, franchising might be a safer and more capital-efficient strategy. This business model has been successfully executed by global players like McDonald's, which has fast-food restaurants worldwide. Franchising would allow Randy to spread the risks with local partners who understand the market.

Alternative Expansion Strategies

Other strategies Randy should consider include forming a joint venture with a local company or leveraging the power of the American Dream through targeted marketing. As American culture, including fast food, has global appeal due in part to the influence of U.S. media, Randy's may leverage this to attract local partners and customers. However, thorough market research and a carefully structured international business strategy are paramount to succeed in Asia's diverse markets.