Church’s chicken

Church’s chicken

Phase 1

The company profile

This company has a specialization in fried chicken and is in America. It is a fast-food restaurant, and it trades out of North America by the name Texas Chicken. Its year of foundation was 1952. The company has a high revenue that has been on the rise over recent years. In 2017, its annual revenue was $785.96 million. In 2018, it had risen to $987 million. It is also a company that enjoys high amounts of profits. It gives value to franchises, and its profit stands at 26.3%, making it play in the same league with the   other billion-dollar restaurants.

It is also vital to have a look at the main product lines of the company together with its brands. During its establishment, it only used to sell chicken. After some years, it integrated other products such as fries and jalapenos. There are also hamburger franchises that got established in the 1980s. After some time, there was also the involvement of the beverage products, including Coca-Cola and Pepsi drinks.

The significant customer base of the company is the entire population at large in the various locations of its branches. The young generation to be specific likes fast foods, and they add up to the significant customer base (Marshall, 2007). It is also a firm that pays great attention to the importance of having different retailers. Among the retailers is Miller Zell, which helped create a strong bond between the company and its customers. The retailer upgraded the look of the restaurant and is the retailer behind the legacy brand of the restaurant globally.

The company has also gone international, establishing its branches in different countries. As of 2019, it has 1,100 locations. Some of its subsidiaries are in Canada and Puerto Rico. Other sites of the company are Vietnam, Mexico, Malaysia, United Arab Emirates, Jordan, Iraq, Egypt, Bahrain, Indonesia, Kuwait, Syria, Venezuela, Mexico, Honduras, Belarus, and Russia, among others. It has established itself well on the global front, meaning that it still sells its products overseas.

The company places its products through retailers and wholesalers for the benefit of its customer base. It buys the drinks from the wholesalers dealing with Coca-Cola and Pepsi. Through its retailer, it can distribute its goods in the various parts of the globe. The company carries out marketing via franchises. Among them is White Castle hamburger chain Harvey’s restaurants. It has a good supply chain model. There is a software used by the management to pair up its 1,100 restaurants and the fourteen distributors who are on a contract (Thompson, 2020). The company has also partnered with the performance food group that helps in the management of food products.  The service systems of America also plays a vital role in the function mentioned above. The company uses distribution centers located in various parts of the country to serve specific restaurants. Some of the centers are in Mississippi and Louisiana. Its suppliers directly deliver the products to particular restaurants. The suppliers include Tyson’s trucks and PFG. The seriousness that the firm has with corporate restaurants and franchisees help in knowing the demand at a particular restaurant and act so that there is no inadequacy or excess of supply. The strictness plays a significant role in the elimination of intermediaries, who would cause a considerable reduction in the profits of the company.

Phase 2

Why Poland is the right destination for expansion 

Government Stability and Conducive Economic Environment

Poland boosters one of the best business environments in the world due to its sound micro and macro-economic policies. It is the sixth-largest economy in the European Union. The Polish government has loosened its grip on market regulation and restrictions in the marketplace allowing private entities to operate with more freedom creating a business-friendly environment (Kronenberg and Bergier, 2012).

Poland gained independence in 1918. Since the fall of communism, the supreme law has been able to promote a legal system based on the principle of civil rights that are governed by public law. The constitution has promoted equality, and this has brought about a long-standing period of peace and resilience in the country. That has spurred peace, and business has thrived in the country due to limited disruptions.

Infrastructure

The Polish government has invested heavily in the modernization of its public transport networks and other infrastructure projects through its public funding. The transport network consists of modern road networks, high-speed rail routes, marine shipping, and air travel (Mosarova and Ivanova, 2016). Core to the growth and development of any business is the ability to move its products to the market and supply raw materials on time. A robust transport and communication infrastructure will allow a company to settle in quickly into the market and carry out operations effectively. With a sound air transport system, the perishable goods shall be able to reach the outlets in Poland at a faster rate. Good infrastructure moves goods and people with ease.

The Target Population

Poland is a high-income economy with a GDP of USD 565 billion in 2019. The GDP per capita has grown at an average of 6% p.a. over 20 years (Kosztowniak, 2016). The population bargaining power has allowed a line of food and beverage companies to thrive in the country as they can move their product to the market first. An example of a food company that has thrived in the country for over seven years is Black Bar ‘n’ Burger. The polish has an outdoor eating culture, which also allows retail food points to thrive in the country. Another advantage that comes with this high population is that there is readily available labor. By the fact that it has an outstanding economy and education systems, this labor is skilled, which is an advantage to Church’s Chicken.

The geographic location of Poland

The site of Poland is essential because it is at the center of Europe. That means that it is a significant and potential place for the startup and growth of any business. Among the countries that it borders include Germany, Slovakia, Czech Republic, and Russia. A better part of these countries is the first-world, and that shows the importance of this location. The geographical location and setting of a place have been significant factors in deciding where to set up a business. It would lead to good business if people knew that Church’s Chicken is present in Poland (Cieslik, 2005).

It is a country of influence

The level of influence of Poland in Europe is excellent, and this is the reason why it hosted the Euro 2012 soccer tournament in partnership with Ukraine. This factor is essential to the Church’s Chicken because there may be more events in the country that would increase the customer base. Imagine the great business that it would be already established during this tournament. It is a significant factor for the management team to consider in this expansion.

PHASE 3

ENTRY STRATEGY SELECTION AND SUPPLY.

Licensing/Franchising.

There are various entry strategies of going international. It is upon the management to look critically at all the seven strategies and decide which one of them will work best to the advantage of the company. The entry strategies include trade intermediaries, direct investments, licensing/franchising, United States commercial centers, Joint ventures, and exporting. There may be cases where more than one entry strategy works for international expansion. It calls for critical analysis while focusing on significant factors such as budget and the restrictions involved to come up with a better option.

After a critical analysis of these strategies, while bearing the Church’s Chicken in mind, it is solid to conclude that licensing/franchising would work best for the company. That is the sort of a mutual agreement where the company giving the license offers the licensee freedom of usage of its brand name, patents, and the manufacturing process for a payment that has an agreement. Franchises like McDonald’s have ventured into Poland through licensing. This kind of arrangement happens to be favorable where government restriction and scarce capital can prove to be a huddle for Church’s Chickens to Venture into a new market.

There are various factors behind the choice of this strategy. It may use this strategy, and after stabilization and having a good flow and control of the market, it can then go to direct investment. It is also important because it is a method that has been used by other firms, and it has played out very well. Interestingly, most of these firms also deal with fast foods, and Church’s chicken would not be an exemption.

Licensing does not need much capital. Furthermore, the returns on the amount invested are always high. That will work in the best interest of the Church’s Chicken, whose aim in Poland is to continue making profits.  Another factor for this choice is that it gives access to the Poland market that would be so difficult for it to enter because of the heavy-duty and numerous restrictions that exist. There is also an advantage that in case of any failure on the licensing/ franchising part, there shall be no tremendous financial losses as compared to the other strategies. In the case of direct investment, massive losses are an expectation in case of any fails.

Church’s chicken will not have any risk of its assets getting expropriated as far as this strategy is concerned.  The company will gain access to the market, and it will go deep into the local market, and this will make it avoid the expenses associated with having a wholly-owned outlet in the country.

The risks associated with this kind of strategy is that there shall be limited returns. There is also a possibility of the company bringing up restrictions on taxation and remittance. There might also arise conflicts between the companies involved after some time, despite the previous understanding between them. The disputes might arise because of the difference in marketing efforts and the market coverage of the parent company.

References

Cieślik, A. (2005). Location of foreign firms and national border effects: the case of Poland. Tijdschrift voor economische en sociale geografie, 96(3), 287-297.

Kosztowniak, A. (2016). Verification of the relationship between FDI and GDP in Poland. Acta Oeconomica, 66(2), 307-332.

Kronenberg, J., & Bergier, T. (2012). Sustainable development in a transition economy: business case studies from Poland. Journal of Cleaner Production, 26, 18-27.

Marshall, J. (2007). BPO: developing market, evolving strategies; Business process outsourcing, or BPO, continues to gain customers, and much of it is offshore. Human resources are still the most prominent area, with finance and accounting and procurement trying to find more traction. Financial Executive, 23(5), 38-44.

Masárová, J., & Ivanová, E. (2016). Road infrastructure in the regions of the Slovak Republic and Poland. Bulletin of Geography. Socio-economic Series, 33(33), 79-90.

Thompson, J. (2020). ” A Chicken for Breakfast at the Expense of Mr. Rebel”: The Journal of Sergeant Nelson Howard, Company E, 13th Maine Infantry on the Texas Coast, 1863–1864. Southwestern Historical Quarterly, 123(3), 316-344.