Chapter 4. The expansion-and marketing strategy

After an comprehensive review of the academic and business literature on internationalization and franchising, supplemented with a review and discussions with a big amount of franchise leader with vast international practice, Aliouche and Schlentrich (2008) created an exhaustive three-section model of international evaluation assessment (Appendix 3).

Based on a strategical approach to international expansion, this model distinctly takes into account the main elements needed to elaborate an optimal international expansion initiative, as following:

· Macro-environmental assessment.

· Micro-environmental assessment.

· Optimal market entry mode.

A great deal of countries or markets may be potential targets for widening for a Norway-based firm planning to expand overseas. Even the most resource-rich franchise firms do not have the financial and human resources needed to enter a large number of international markets at the same time. Franchise companies may have to strategically single out countries/markets in order of priority on which to concentrate their enlargement strivings and resources. For income and shareholder maximizing firms, priority countries have to have optimal ability/risk profiles. Choosing countries with high potential market possibilities and low market risks at the very beginning strengthens the chance for high revenues, profits and shareholder value, while turning down the risks of fail and loss. (Hollensen, 2007)

As for many other operational and strategic initiatives, a firm’s expansion to international market should in the long run reinforce its long-term shareholder value. Shareholder value is increased by appealing in projects and initiatives that create value as measured by a positive net present value.

When companies have distinguished a target country for penetration, they have to define, what organizational pattern and management strategy best helps them to keep in their competitive excellences and maximize their value development. The interaction between the features of the host country, the industry, and the firm itself (as mentioned upwards) will set the entry mode that is optimal for a particular firm planning to expand to a particular country. There is a lot of probable market entry modes, as direct ownership, franchising (in its different varieties like multi-unit franchising, master franchising, area development, etc.), management contracts, and a range of combinations of these primary modes. (Forsgren et al, 2014) However, if we talk about Mofjell, I would recommend them to turn their mind to the three basic market entry modes most prevalent in the hotel industry: equity (ownership), franchising and management contracts.

Conclusion

To sum up, I can acclaim, that Mofjell has all the possibilities to provide itself a steady growth and the financial stability. As a result from the strategies above, Mofjell should continue to develop and implement a strong communications plan in both national and international markets, then leverage their strength in the local market as a member of the community by supporting local events, identify new markets for the services such as University-based target groups and, of course, to continue ongoing staff training and skill development to ensure the highest standards of service. It would be also a good idea to follow well-known successful examples in order to maximize the ROI to its shareholders. I would suggest Mofjell to improve value network in particular offers opportunities for many existing businesses to add more value to their customers, and for new entrants to capture market share from those who offer less value to their customers with an eye to protect and spread its presence in the domestic (Norwegian) market. Finally, talking about expansion to international market, I would recommend Mofjell to turn their mind to the three basic market entry modes most common in the hotel industry: equity (ownership), franchising and management contracts. I presume that following my assumptions, the Mofjell Hotels Company will be able to save the achieved progress and even to improve it.

Appendix

1. Competitive triangle.
Sourse: Hollensen, S. (2007). Global marketing: A decision-oriented approach. Pearson education.

2. Perceived value, relative costs and competitive advantage on the example of main competitors of Mofjell Hotel.
Source: Hollensen, S. (2007). Global marketing: A decision-oriented approach. Pearson education; own improvements.

3. International Expansion Assessment Model.
Sourse: Aliouche, E. H., & Schlentrich, U. A. (2008). International franchise assessment model: Entry and expansion in the European Union. Entrepreneurial Bus. LJ, 3, 517.

Reference list

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Date: 2016-04-22; view: 846