RMG 200 Chapter Notes - Chapter 7: Franchising, A Global Threat

• School: Ryerson University
• Department: Retail Management
• Course: RMG 200
• Professor: Ken Wong

Document Summary

Retailers engaged in international ventures for many reasons: Saturated home marketplace with no room to grow. Aging population that spends less and saves more. High operating costs including staff wages, rental costs, and taxes. Involves a retail firm investing in and owning a division or subsidiary that builds and operates stores in a foreign country. Highest level of investment and exposes to significant risks but has the highest potential returns. Retailer has complete control of the operations. Is formed when the entering retailer pools its resources with a local retailer to form a new company in which ownership, control and profits are shared. Reduces risks and sharing of financial burden. Local partner understands the market and has access to resources. Offers lowest risk and requires the least investment. Entrant has limited control over the retail operations in the foreign country. Risk of assisting in the creation of a local domestic competitor is increased.