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Koyo Jeans

In: Business and Management

Submitted By euniceian426
Words 688
Pages 3
Entry Mode
The choice of entry strategy has a strong impact on international operation. Koyo Jeans expanded into international market under franchising and it also owned proprietary store at the same time. Franchising is a faster, cheaper form of expansion than adding direct owned stores. Franchising with experienced franchisees gave a huge support for Koyo Jeans’ expansion and can also ensure the brand reputation in global market. The learning benefit of gaining local market knowledge and connections of the markets were provided through franchising. Nevertheless, Koyo Jeans’ own competitors would be cultivated, especially in China. The tempo of duplicating the business model is amazingly fast in china. Franchisees acquired certain related know-how and management techniques from Koyo Jeans, they may resign the franchising agreement and open competing businesses if they experienced success by franchising, which were liable to influence franchisor adversely. Moreover, running franchise stores may reduce Koyo Jeans’ control of franchisees’ activities. These stores were only responsible by the office in Guangzhou, but Koyo Jeans also expanded into European market even more farther in the future. The greater geographic dispersion, the more difficult for Koyo Jeans to ensure that franchisees’ activities meet the standards. For example, although Koyo Jeans provided staffing training guideline, it is not easy to observe whether the franchisees follow all the prescribed guideline. If service quality of any franchisees are not up to the standards, it may lead service quality to vary greatly from store to store, even have a negative effect on the reputation and sales of Koyo Jeans.
Due to the restriction of franchising agreement. Koyo Jeans cannot ask franchisees to do any change directly as it do in its directly owned stores, unless both parties agree. Also,…...

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