International marketing would be considered to as the application of all type of marketing principles but that too into more than one country so this could also be called to as crossover between the two or more countries. As there are more emphases on the companies of today's world to have more focus on the way they are using the technology and communication process so that they could earn more amount of profits. As per one of the report of World Trade Organisation which is regarded to as global institute which is functioning in order to ensure smooth and free trade between nations. It was noted in its report that the global trade is increased immensely during the time period of 1951 to 2010 which is about 33% of increment. So for this management of restaurant are having three choice as to were they could open their next branch including Scotland, Australia or into Amsterdam. From this they have decided that they would be opening their branch of another The Lounge Cafe in Amsterdam which is in Netherlands.
Background of company
The Lounge cafe and restaurant is the top restaurant in the city of London as it is most visited in regard to others in same market. They are very much famous in serving its customers with the market and performing good enough with huge amounts of profits of the firm. The cafe is servicing all day and night with very happy and satisfied customers of it this is the reason as to why the company would be planning to expand their business in Netherlands. They are having very well settled chain of restaurant into the North Western part of London.
Mode of entry.
As we have discussed that Lounge cafe is planning to enter into the market of Amsterdam so there are various options for the company that how would they be entering the market of country (Katsikeas, 2018). Mode of entry would be defined to as the way and method in which one particular company is planning to enter another foreign markets. There are several ways like that of joint venture, franchising and wholly owned business or the direct mode through which Lounge cafe could make their entry into Amsterdam.
This would be called to as the indirect mode of market entry under which there is an agreement between two parties namely franchisee and franchiser. Both of them are agreeing to carry on their business with each other in some different form like one party who is having his business in a country with very strong base is allowed to operate the business of the other inlue of certain fee or royalty. The franchisee who is the semi independent owner of his own business and very well settled customers base would be paying of certain sum of fee in respect to get the right in getting the trademark to sell its products and service. Majorly the positive part is that there is very low cost involved within this type of mode of entry as parent company need to pay only the fee or royalty to the franchisee and not incurring the cost to established their business in any form (Kipnis and Broderick, 2017). On the other hand it was noted that conflicts with the franchisee and unable to maintain the control on them could be defined to as the difficulty which would be faced by Lounge cafe if they are planning to go with this option.
This could be defined to as coming with agreement with a well settled company for certain duration of time in order to work together. There are some common objectives of this type of mode of entry like that of risk, technology sharing, market entry, product development and regulating with the government of that nation. Thus allowing the company to settle in there without any restrictions from the government as other company is having its own political connections. While there are also some challenges that Lounge cafe would be having if they are planning to start their business in Amsterdam like that of control or ownership issues which they both are facing and the issue related to pricing or length of agreement.
Wholly owned busines
It would be majorly done by two methods which are acquisition and greenfield investment as both of them could be equally good and bad for the company so anyone could be chosen by them which is depending upon their situation and resources that they are having. There is high amount of risk and cost which is been involved within the greenfield investment if we are starting our new business in another country (Yang, 2018). Acquisition on the other hand is becoming very much popular to enter into foreign markets which is allowing them to expand their business on more fast pace.
So from the above discussion on which way would Lounge cafe could adopt in order to start their business in Amsterdam it is considered that either acquisition or franchising is better option. As both of them could be giving us chance to expand the business without the barrier of settlement of company in terms of customers base. They could either acquire existing business of some good profitable company or cafe or they could find some franchisee so that they could start their business there.
SWOT is considered as a strategic management technique that can help the Longs cafe to analyse their strengths, weak factors, opportunities for them and the ones that can act as threats for them. So, using SWOT analysis for analysing various different aspects of the Lounge cafe is discussed as under :
A very strong factor of the Lounge cafe is that the cafe has developed a unique concept so that they can be able to satisfy numerous customers. Whether it is about the food or the interior, it seems attractive enough. So, this can be considered as strengthen factor for the cafe.
As there are various strong factors, there are some features that somewhere throws a negative impact on the same. The customer base of the cafe is less. So, the cafe can involve various ways by which they can interact with their customers and promote their marketing as well (Blockeel, Drakopoulos and Tournaye, 2016).
The Lounge cafe can involve various ways for promoting the cafe. Also, they can involve some other factors such as new discounts and offers so that by means of this, they can be able to attract a huge number of customers. This can be considered as an efficient opportunity. Also, they can make involvement of more qualified and skilled employees so that it can result in better and efficient performance.
As the business of cafe is common enough and people enjoy it as well. So, if in the nearby areas, some more cafes will tend to open, then this can act as a threat to the Lounge cafe. Also, the market taste of people change as well. So, the Lounge cafe should ensure the fact to take regular feedbacks from the customers and have an interaction. It will help them to stay prevented from any sort of further threat or issue.