Market Access Into Kenya for a Food Franchise Dissertation

BNU5013 – International Management Strategies

Post-Module Assignment to get Prof. Minyuan Zhao

The topic intended for our team presentation was the expansion of Global Franchise Architects (GFA) into Kenya. The group selected this business as we experienced just accomplished a interaction strategy for all of them on how to increase in India, and among our colleagues who is via Kenya thought that it might be a viable option for GFA to increase into Kenya.

This kind of paper will attempt not to duplicate any facts stated currently in the display, unless required to highlight a particular point. In a high level the group arranged, by a democratic process, for the consensus that GFA probably should not expand in Kenya, yet I would like to disagree with this assessment following further study and evaluation on my own.

The real key strengths of GFA happen to be:

1) Operational quality: This helps the investor to have a high Return on Investment (ROI) 2) Portfolio of 9 brands: Having multiple brands provides the investor to open combined stores with different brands or select the brands that they desire to focus on.

The primary highlights that make Kenya an attractive market happen to be: • Positive GDP progress

• Decrease interest rates- cheaper credit access

• Inflation down (< 5%)

• Market: 4 major cities option

– Nairobi (4M), Mombasa (1. 5M), Nakuru (1M), Eldoret (. 8M) – The greater part Western style taste, entrenched " eating out” traditions – Large proportion of young and out-going population. • Competition

– 2 worldwide (South African) food franchisers + neighborhood brands. Almost all have limited menus, certainly not well been able and high-priced.

While dangers entering Kenya are:

• High essential oil prices

• Exchange charge fluctuation

• Political stability

The initial thing that one has to look at although deciding to a market is whether there is a with regard to the product for sale and the spending capacity with the consumers. In the last year the Kenyan economy continues to be recovered via a downturn and is at present booming. As well the fast food business have been growing with increased consumer spending (1). A new entrant usually takes advantage of the vacuum created by the drawing a line under of junk food stores due to the post-election physical violence and global economic slow down.

Second is what sort of company may differentiate by itself from its competitors. GFA relies upon its functional capabilities along with nearby sourced develop to provide a large ROI. There are a few ingredients that are flown in from the central kitchen in Thailand like cheese to maintain a consistent regular of quality but the snooze all are obtained locally. Together with the recent explosion of high quality neighborhood produce (2) the franchisee would not need to rely on released goods exclusively which bring about higher cost of products sold and lower revenue.

CAGE Research:

While performing CRATE analysis to determine if GFA should get into Kenya or perhaps not the vital thing compared to was your current operation in Sudan. Some things that stood out during this analysis were the similarities between how Starbucks launched and operated in China, a tea ingesting country with low copyright laws protection.


• International foodstuff tastes in major urban centers like Nairobi and Mombasa and the motivation to spend a premium to get Western items • Presence in Sudan cannot be leveraged due to variations in culture and local food preferences


• Lack of TM protection at the. g. Company Pizza Resort operated by a different owners of Pizza Inn U. S


• Local Procurement of 65% of COGs, Rest will have to be sent from Thailand • Easily accessible from India and Bangkok by marine and air. • Far eastern and Central Africa's economical and conversation hub


• $838 GDP per capita, very low $ nevertheless users in city willing to pay a premium for western items • Agricultural based economic climate, ensuring great supply of...

Referrals: 1: http://www.businessdailyafrica.com/Corporate+News/Food+businesses+record+growth+on+improved+buying+power/-/539550/1039392/-/item/0/-/rjqcn9z/-/index.html

2: http://www.tegemeo.org/documents/other/Regoverning_Kenya2007_information_sheet.pdf

3: http://dialadeliverykenya.co.ke/about_us.html

4: http://allafrica.com/stories/200402100125.html

Class material and group presentation