Case StudyJiaying Hong, Evelyn Garcia, Tim Okay, Joshuan Juan, Amber Presley & Justin

Yoder

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Argentina, Spain, and England

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History

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Spain England● Spain is originally known as

the Kingdom of Spain.● The official language of Spain

is Castilian Spanish.● Spain was originally inhabited

by Celts, Iberians, and Basques, and became a part of the Roman Empire in 206 B.C.

● In 1492, Ferdinand V of Aragon and Queen Isabella paid for Christopher Columbus to explore the west in search of a new route to India. Columbus landed on one of the islands of the Bahamas by mistake. His mistake made Spain one of the richest nations in the world for a time.

Argentina● England came into being in

the 10th century and was originally settled by a group of people known as the Angles

● The medieval period is one of important parts of the history of England. Many battles took place during this period including the Hundred Years' War. The Magna Carta was also signed during this time era.

● In 1707, England and Scotland decided to merge into what is now the United Kingdom of Great Britain.

● First explored in 1516 by Juan Diaz de Solis, Argentina developed slowly under Spanish colonial rule.

● In 1929, the Great Depression began to shatter the nation's economy.

● Argentina's urban areas have a European look, reflecting the influence of their European settlers and old Spanish heritage in the cities around a main square called a plaza.

Culture

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● Spain has an extraordinary artistic heritage.

● The family is the basis of the social structure

● People are generally warm and close physically in communications

● Spaniards place great importance on the character of the person with whom they do business.

● Pub are a major part of england culture. This is where community gathers to eat, drink, and socialize.

● Social etiquette is very important.

● Unlike many European cultures, the British enjoy entertaining in people their homes

● Englander are quite formal and prefer to do business with people they know.

EnglandSpainArgentina● Culturally and

emotionally, Argentines often seem more European than Latin American

● Family and honor are strong values

● Communication is open, blunt, and direct

● Relationship driven culture

● People are generally warm and close physically in communications

Religion

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Argentina● Roman Catholic (70-

90%)

● Other variations of Christianity

Spain● Majority of population

is Catholic (%).

● There are also smaller portions of the country that practice Judaism, Hinduism, Islam, and Protestantism

England

● Official religion Christianity (59%)

● No Religion - (25%)

● Muslim (4.8%)

● Other ( 4.8%)

Sports

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Argentina

● The most popular sport in argentina is soccer and it has become a part of the argentine culture.

● Other sport include basketball, baseball, rugby and tennis.

Spain

● Soccers is the most

popular in spain. Spanish

premier league is

considered to be one of

the world's best

competitions

● Other sport in spain

include basketball, tennis,

bullfighting and Formula 1

England● Sports play a prominent

role in english life.

● Their most watch sport

are Soccer, cricket and

rugby.

● Other sport include ice

hockey, field hockey,

basketball, lacrosse and

baseball.

Alcohol Consumption

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EnglandSpain● Legal drinking age is 18● Average consumption of

alcohol per capita is 9.3 liters.

● Drinkers only - alcohol per capita is 15.3 liters.

● Legal drinking age is 18● Average consumption of

alcohol per capita is 11.2 liters.

● Drinkers only - alcohol per capita is 16.4 liters.

● Legal drinking age is 18● Average consumption of

alcohol per capita is 11.6 liters.

● Drinkers only - alcohol per capita is 13.8 liters.

Argentina

http://www.who.int/substance_abuse/publications/global_alcohol_report/profiles/gbr.pdf

Appeal Of American Food

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Spain EnglandArgentina● Very high appeal of

american food. ● The British love the

convenience, and affordable American restaurants.

● America represented fun, freedom and rock 'n' roll from British perspective.

● High appeal of American food.

● Most of the popular American restaurants serve burgers.

● Most of these restaurants located in cities, such as Barcelona and Madrid.

● American burgers and BBQ ribs are the popular in the American restaurants.

● Most of these restaurants located in cities.

Chicken Consumption

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Spain EnglandArgentinaThe average person consumed

31.24 pounds of chicken in Spain.

Pork is the most consumed meat in Spain, tender chicken is most often served in major cities and town.

The consumption of fresh chicken meat in Spain has decreased from 667.7 million kilograms in 2003 to 636.8 kilograms in 2014. According to the researchers at University of Extremadura have predicted chicken consumption is likely to overtake beef up to 2016.

Post forecasts 2016 domestic broiler consumption to remain stagnant at 94.8 kg per capita.

Beef is the most popular meat.

Argentina is a relatively new presence in the world poultry market and now ranks eighth in production after the United States, China, Brazil, EU, India, Mexico and Russia

● The average chicken consumption per capita is 50.7 pounds in England.

● The Family Food report figures show chicken became a more popular meat than beef for the first time in 2011.

Ready Supply of Chicken

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Argentina Spain England

● Spain produced 1209.1 thousand tonnes of chicken. There are 7,200 registered farms in Spain producing broiler chickens and of these, 5642 produce broilers.

● Spanish consumers regard poultry meat as a cheap protein source and show a strong preference for fresh chicken over frozen for both parts and whole chicken.

● The British poultry meat industry produces around 875 million chickens, with over 2,500 poultry farms across the UK and around 30 food productions sites and slaughterhouses.

● The chicken industry is heavily regulated in England, so more consumers prefer lamb over chicken for lower price.

● Ministry of Agriculture equivalent to USDA)

● Frozen chicken meals, chicken nuggets and chicken burgers. Are popular in Argentina.

● Consumer in Argentina prefer to purchase the whole chicken beside the parts.

Retail Food Market

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● The grocery market accounts for 50.2% in every £1 of UK retail sales

● Combined market share of food and non-alcoholic drinks of the largest four food and drink retailers was 58% in 2013; down from 62% in 2012.

● As an average, Argentines spend about 33 percent of their income in Food & Beverages.

● Quality of raw materials used by restaurants is a priority.

EnglandSpainArgentina● Spanish consumers will

likely increase their spending on grocery products.

● Economic growth will contribute to Spaniards spending more time outside of their homes, socialising at cafes and bars, which should benefit the foodservice channel to the detriment of retailing.

GDP per capita

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England - $40,327 to $40,933 (+0.015%)

Total GDP - $2.679 Trillion

Spain - $29,595 to $30587 (+0.034%)

Total GDP - $1.615 Trillion

Argentina - $20200 to $20500 (+0.014%)

Total GDP - $972 Billion

Export.gov

Middle Class

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Spain

Spain has 21 million middle-class adults that accounts for 55.8 percent of all. The wealth of $2.2 trillion held by them represents 52.4 percent of country wealth and 0.9 percent of world wealth.

Argentina England● Middle class as grown

the most in Latin American, doubling in ten years

● 32.5% of population in 2011

● American Development Bank reports 54.5% of households are now considered middle class

● Upper middle class - Roughly 25% of society. They hold managerial positions, professional jobs, usually college educated.

● Lower middle class - Traditional working class & service sector 54%. Electricians, cleaners, servers, chefs, aircraft pilots.

Labor Regulations

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EnglandSpainArgentina● Minimum wage is $572.40

per month which is around $2.99/hr

● Regular work week 48 hours per week any exceeding hours are 1.5 times payrate

● “13th Month Salary”● Extended paid leave for

non work related accident and disease from 6 to 12 months

● Labor freedom ranks as “Repressed”

● Foreign investments must comply with all European union standards & Spanish Policy.

● Franchise Disclosure Act:● Must transfer all legal

documents into spanish. ● Must comply with Spanish

code of conduct.● Must disclose any

information about company that Spanish Government deems necessary

● Labor freedom ranks as “Moderately Free”

● Minimum wage is on a age grading scale until 25years old

● Minimum wage is $7.20/hr for people 25year and older

● Maximum working hours 48 per week

● Most workers are entitled to 5.6 weeks of paid leave per year

● Labor freedom ranks as “Mostly Free”

Market Infrastructure

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Argentina Spain England● 2016 Economic Freedom Score:

43.8 (down 0.3 point)● Global Ranking: 169th● Freedom From Corruption

Score: 34.0● Investment Freedom Score: 30.0● 6.3% Tariff Rate● Non-tariff and foreign

investment restrictions make for a difficult trade and investment climate

● State interference and state-owned banks contribute to economic uncertainty

● 2016 Economic Freedom Score: 68.5 (up 0.9 point)

● Global Ranking: 43rd● Freedom From Corruption

Score: 60.0 ● Investment Freedom Score: 85.0 ● EU members have a 1% average

tariff ● tariff with other countries are

currently under negotiation ● Spain generally treats foreign

and domestic investors equally under the law

● 2016 Economic Freedom Score: 76.4 (up 0.6 point)

● Global Ranking: 10th● Freedom From Corruption

Score: 78.0● Investment Freedom Score: 90.0● EU members have a 1% average

tariff ● tariff with other countries are

currently under negotiation ● The United Kingdom generally

treats foreign and domestic investors equally under the law

Political Environment / Risk

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SpainArgentina EnglandCountry Risk Rating:C - Below Acceptable Risk

A very uncertain political and economic landscape. Could have major impact on corporations.

Business Climate Rating:C- Below Acceptable Risk

Financial information is often inaccurate and unavailable.

Country Risk Rating:A4 - Slightly above acceptable risk.

Shaky political/economic environment can lead to inconsistent payments.

Business Climate Rating:A1 - Very Low Risk

Business information is available and consistent.

Country Risk Rating:A2 - Low Risk

Political & economic landscape is very stable.

Business Climate Rating:A1 - Very Low Risk

Debt collection is consistent and financial information is reliable.

http://globaledge.msu.edu

SpainPros

No religious food restrictionAverage of 14 days to start a businessHigh sport cultureLarge population

Shrinking Middle Class Tapas bar culture Unemployment remains high US companies make up 4.8% of all FDI in

Spain. (2014)

Low productivity of its manpower

Complexity of the regulation system

Index of Transaction Transparency of 5.0 whereas US is 7.0

Index of Investor Protection of 5.0 whereas US is 8.3

Cons

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EnglandPros

Has world's fourth largest recipient of direct foreign investment (FDI).

US companies make up 41.5% of all FDI in England. (2014)

Low Taxation: Corporation Tax Rate is 20%

Average of 4.5 days to start a business.

London is financial capital of Europe

Low minimum wage

Pub CompetitionYou must register for VAT (Value Added

Tax) if you expect to make more than 83,000 British Pounds

VAT Standard Rate is about 20%Number of procedures involved in starting

a business can make the process laborious for businesses.

Takes around 100 hours per year to complete tax obligations.

High level of competition from foreign companies.

Cons

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ArgentinaPros

Ranks 4th amongst the South American countries in terms of FDI Stock

Main investors in Argentina are US, Spain, France

Definite assets in its natural resourcesWorkforce is highly skilled and competitiveUS companies make up 24% of all FDI in

Argentina. (2014)

Consumption of Alcohol is high

Sports are heavily watched and celebrated

Business climate is rather poor and country ranks 121st out of 189 economies

Low FDI Inward Flow; declined by 60% in 2014

Fragile and undercapitalised banking sector

High rate of Inflation

Index of Transaction Transparency of 6.0 whereas US is 7.0

Index of Investor Protection of 4.7 whereas US is 8.3

Cons

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Solution England

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SolutionHighest GDP per Capita

→ Large amount of disposable income & large middle class.

Large Sport Culture

→ Many soccer clubs and very dedicated fan base.

Appeal of American Culture

→ Influx of American companies has changed English culture.

Alcohol Consumption

→ Drinking age is 18 & high consumption volume.21

Entry Mode - FranchisingPros

Easy expansion capital

Minimized growth risk

Purchasing power

Ongoing help and support.

Scalability

● Initial and continuing fees

Less control

Lost control of Franchises success

Ongoing cost and expenses

Most of the revenue goes to franchisee

Cons

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Entry Mode - Joint VenturePros

Access to new markets and distribution networks

Increased capacity

Sharing risks and costs with a partner

Access to greater resources

Objectives and goals may not necessarily be clear and communicated to everyone involved.

Different cultures and management styles

Partners may not provide sufficient leadership and support.

Cons

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Entry Mode - Wholly Owned SubsidiaryPros

Advantage of operation and strategic control of parent company.

Easier to establish common operating processes

Less risk of losing intellectual property

Completely owned by another company.

Subject to corporation tax

Expensive undertaking

Takes time to establish relationships with suppliers and customers

Cons

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Entry Strategy

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Entry Mode Decision: Franchising.

Reason: Easy expansion capital and minimal growth risk are reasons why we decided to choose Franchising. Also, starting a franchise is not much of a strenuous process, and it receives ongoing help and support from Franchisee.

The risks associated with Joint venture and wholly owned subsidiary outweighed the benefits.

Target Customers

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Upper Middle Class - Average annual income € 89,000 to € 124,000

Established Middle Class - €45,000 to € 89,000

Lower Middle Class - € 21,000 to € 45,000

Sports Fans

Beer Enthusiasts

Families

Competition

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Recently opened one restaurant in Nottingham, England

Rating: 4.0 stars by guests

Learn from their mistakes

Biggest complaint is lack of atmosphere

Popular American Sports Bar chain in England

Already localized and has a following

Food is typically viewed as “poor quality” by customers

Several local pubs, bars, and restaurants

Price for alcohol and food is well liked

Lacking variety of beers

Live music plays when sports are not on

Potential Locations - 1Manchester United F.C. (Manchester)

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Arsenal F.C. (London)

Chelsea F.C. (London)

Liverpool F.C. (Liverpool)

England Rugby (London)

Potential Locations - 2

Location: London

2,100 Sq Ft.

Renovate property to match American design but also keep Local touches

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Location: London

3,900 Sq Ft.

Modern, large space. Similar appeal to American BWW. Great location, parking, and outside seating

Location: Nottingham

2,750 Sq Ft.

In a shopping center, high foot traffic, trendy, high quality area

Supply Chain Introduce unique cuts of meat

→Connect with local slaughterhouses to process primal cuts of meat according to customer specification

Introduce exotic condiments and spices to local customers

→ Source condiments and spices from Asia, Middle East, and Africa

Farm to fork became a popular trend in the industry

→ Source meat and fresh,seasonal vegetables for salads directly from farms 30

Adaptation to Local Tastes/CustomsUpdated beer list so it is more suited to local tastes and trends.

Miller lite, Bud Light, Ect.. → Local Craft Brews (English/American)

Tailor wine list to the more educated market.

(California/ Other American Wines) → (French, Spanish, Italian)

Change Liquor drinks to cater to a local taste. Ex) Create a local soccer club themed drink.

Keep food menu the same because of the appeal of American Food.

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Marketing Strategy

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Implement a loyalty Program:Buy “x” types of beer get one

freeWeekly Promotions:Wednesday €.50 wing day Local Sport Team Incentives:When “team” scores a goal;

get a free liquor shot.

cv

Introduce new items on the menu:● Add a new wing sauce or

fish and chips for a local feel

Variety of local and imported beer and wine:● Wine is largely consumed

Atmosphere - Customer Centric:● Localize with sports decor

Marketing Strategy- Prices

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Wings

6 wings = £ 6.3710 wings = £ 8.9720 wings = £ 15.95

Burgers

Burger average price = £ 9.98Price range = £8 - £

13.95Double patty with cheese

= additional £4.00

Beer

DraftPint = £4.90 - £5.50Half = £2.70 - £3.10

Bottled£4.80 - £5.50

Can£3.95 - £4.75

Local AdvertisingSport Listing

Advertise what sport will be shown on a weekly basis.

Billboard

● Simplified way of targeting a large and diverse market. Continuous exposure for a short period of time.

Local TV ads

● Run campaigns that highlight family oriented atmosphere with a sport driven environment.

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