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Essay / Research Paper Abstract
This 7 page paper considers the use of franchises to expand into another country. The writer considers the background information that would be needed, and then considers how supply and demand as well as marginal costing calculations may be used to maximise profits form a new product introduced through the franchises. The paper uses the example of Victoria's Secrets. The bibliography cites 7 sources.
Page Count:
7 pages (~225 words per page)
File: TS14_TEvicsec.rtf
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Unformatted sample text from the term paper:
Hegemony of the US has lead to a domination of US brands, and to extend the businesses the use of franchising has been a tool successfully utilised. If we look
at brands that are well known, such as Victorias Secret, then the use of franchising has allowed growth at a much faster rate than would otherwise be possible.
Franchising is a system which can take a variety of forms which are more common in the services and leisure industry than in
manufacturing. A franchise is an independently owned business which purchases the right to use the trade or brand names as well as the brand systems and share in the
marketplace recognition. This will usually take an initial investment to purchase both the premises, equipment and right to use the name, and then there will usually be a percentage of
turnover payable as an ongoing fee. In return the franchisees agrees to terms and conditions which includes doing things the company way. McDonalds, Burger King and other companies such as
Tie Rack, Beneton and the Body Shop, as well as Victorias Secrets all use franchise agreements in their strategic growth plan (Chryssides et al, 1998).
To the normal customer walking into one of these stores there would be no discernible difference between company owned stores or a franchise as they are, or should
be run in the same way. There is also the problem of lack of control by the expanding company, although a franchise can be revoked if it does not meet
its franchise agreements, this can be a lengthy process and can attract negative publicity. However, as we can see from the source of the investment capital it is relatively low
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