New York Fries Memo
One of the main motives for internationalizing was the need for expansion outside of Canada. NYF does not occupy every shopping mall in Canada, only the top tier malls. This means that opportunities in Canada are quickly running out. Another motive for internationalizing was the development of the SSBC brand. This brand offers hamburgers to the public which is seen as a complimentary item to French fries. The SSBC would be predominantly located in big box centres which offered new areas of growth for the brand and the company. A third reason for expansion into international markets is the greater affinity for Western culture and food that emerging markets have. Consumers around the world are more open to buying Westernized products. Another reason for expanding the company is the proving popularity of NYF and SSBC products. Hamburgers are a ...view middle of the document...
This was due to poor real estate choices and because NYF allowed the franchisee to micromanage the operations in the area. Another problem NYF faced when expanding occurred in South Korea. The franchisee moved away from adopting the NYF brand in its locations and tried to create a more Korean design and taste. The new franchisee lacked some of the business savvy of the other international franchise owners and required a time investment from head office. This did not work well for what NYF products were.
One option for expansion available to NYF is trying to expand into international markets is opening up store fronts. This was tried in India. There was concern over this expansion method because it moved away from the tried and tested formula of appealing to impulse shoppers in shopping malls. It was believed, however, that it was still appropriate to expand here because Indian consumers were quickly beginning to develop favourite Western quick-service restaurants based on the selection already available to them. For the expansion into Hong Kong, NYF decided to partner with a group of franchise owners called Next Step Limited. This group was led by two young men who were raised in Hong Kong and Canada. This group provided NYF with partners who not only had an appreciation for both cultures, but also had the necessary contacts for securing prime real estate in Hong Kong. The goal of NYF for the short and intermediate term should be to continue to develop the NYF brand and hold off on trying to internationalize the SSBC brand. NYF does not have enough exposure internationally yet to even support its fry products, so trying to promote two different types of brands will stretch their resources too far and both will suffer as a result. The NYF brand is already great and has a proving method for expansion and growth. Once this band is established for a few years in a new market, I think then it would be wise to bring in the SSBC brand. They can then leverage the reputation of the NYF brand into promoting the SSBC brand as an equally great yet different product.