The
American burger chain, Fatbuger has taken an interesting route in the strategy
of global expansion. The Los Angeles
Based Company, which currently has 200 international locations, has become
known for their expansion into less than desirable locations. Andy Wiederhorn,
the firm’s founder recognizes the demand and desire for American brands in
foreign countries. With strong competition in the United States and the pending
financial crisis in 2008, the company went global in 2007.
Numerous
of Fatburger’s locations are settled in places experiencing tumultuous times.
However, this does not concern the company.
Before expanding anywhere significant research is done. This research
starts as examining all risk and concerns and then identifying how to best deal
with them. One of the recommendations made for this research is using a
consulting group. In addition, it was stated that a U.S. management team could
not accurately access dangerous locations for expansion without an expert team
in that location.
With
the reports that have been written in this class examining countries for
business opportunities, very few would recommend entering a country with any
kind of dangerous situation. This article raises the point that if it is done
correctly and through a thorough process companies such as Fatburger can be
successful.
Source:http://www.businessweek.com/printer/articles/235312-how-one-burger-chain-profits-from-turmoil-abroad
I have never heard of Fatburger but this seems like an interesting approach to business. No matter how dangerous to region, people will still need to eat so by accounting for the mercurial setting and finding a way to make their business work there, Fatburger may have infiltrated a market that otherwise wouldn't have been broken into by competitors, giving them all the business of the people in that market. This strategy probably only works for necessities like food and, for example, a car dealership would fail miserably in the dangerous areas.
ReplyDeleteTaking the leap into the global marketplace is a huge step. International business offers numerous opportunities to a company if they are willing to take the time and effort to learn to prepare and enter foreign markets. If done properly, I think Fatburger will experience great success.
ReplyDeleteI dont know about setting up a business in a dangerous place mainly because the risks will always out way the benefits. In dangerous areas, there are a lot of unexpected events that no one controls for the most part. As a business owner you are responsible for your employees wether international or local.
ReplyDeleteIt is not surprising that Fatburger has not performed as well as they would have hoped in the United States. In California alone, In and Out has become a very popular burger chain. McDonalds, Burger King and Wendys take up the vast majority of fast food burger restaurants as well. Also, planning to do business in less than desirable locations does not seem like an effective business strategies. Abroad, it is possible that they may have success if foreigners actually crave American fast food.
ReplyDeleteI don't believe competitors were rushing to expand their businesses in these undesirable locations so maybe it was a smart move on Fat Burgers part. It's no surprise that this decision to undergo such an expansion calls for higher than desirable risk. If these fast food restaurants are diving into these unsafe locations then their will be a higher than likely chance that crime will play a role.
ReplyDelete