Explain why franchising is growing in importance nowadays

Question # 00351468 Posted By: kimwood Updated on: 08/02/2016 05:53 AM Due on: 08/02/2016
Subject General Questions Topic College life Tutorials:
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BE322 – Entrepreneurship and Small Business Management

TMA - Fall 2014-2015

I- INSCTRUCTIONS

II- CASE TO STUDY

III- QUESTIONS

IV- GRADES DEDUCTION

V- AOU POLICY ON PLAGIARISM

VI- PT3 FORM

I- INSCTRUCTIONS:

· Cut-off date: Submit this assignment no later than November 27, 2014. All late submissions require approval from the branch course coordinator and will be subject to grade deductions.

· Learning outcomes: The purpose of this assignment is to support students’ understanding and application of different concepts learned in BE322 especially in chapters 1, 2, 4 and 5.

· Word count: you should discuss the questions in no more or less than the number of words mentioned for each question (plus or minus 10%).

· Referencing: You must acknowledge all your sources of information using full Harvard Style Referencing (in-text referencing plus list of references at the end). Use E-library: to get journal articles on the topic (Emerald, EBSCO…). Use at least 2 articles.

· Plagiarism:Remember that you should work the information from references into your own original thoughts and INTO YOUR OWN WORDS. Plagiarism will lead to a significant loss of marks. Extensive plagiarism could mean that you failed your TMA. (Refer to AOU definitions of cheating and plagiarism at the end of this document)

· Essay guidance: Your response to each question should take the form of a full essay format. Avoid using subheadings and bullet points. Use BE322 textbook and slides, the case, and E-Library. Plan what you will write, and have a well-organized outline.

· Using PT3 form: When you have completed your TMA, you must fill in the assignment form (PT3) posted on your moodle account, taking care to fill all information correctly.

· Turnit-in upload:A soft copy of your TMA and PT3 form should be uploaded to Turnit-in via the link posted on your moodle account, within the cut-off date.

· This TMA is 20% of BE322 Grade.


I- CASE TO STUDY

Express way to quick success

Offering quick and ready-to-eat services to the people who are always on the move, Coffee Day Xpress (CDX) is an Indian brand for the young and the young at heart.

Coffee Day Xpress (CDX) is a unique beverage retailing concept that caters to today’s fast paced lives by providing a healthy and tasty bite on the move. It was launched in 2003 by an Indian Bean Coffee Trading Company and targets youth, students and corporate executives looking for a quick and healthy munch while on the go.

Brand’s unique selling proposition

Over the years, CDX has developed many unique trends specific to the coffee industry and has become recognizable for serving the taste of the brew from home. Its exceptional products and services are its USP (Unique Selling Proposition). Most of the coffee is sourced from the company’s own plantation which results in better quality control and timeliness. The brand’s menu varies across regions. The company maintains certain standards which are unmatched by its competitors, other local vendors. Its wide ranging menu includes products like hot chocolate, coffees, fresh sandwiches, wraps, subs, samosas, puffs, burgers, and pastries in elegant and hygienic wraps to be had at cafes or as take away. Moreover, the brand constantly strives to offer new flavors and products, with the traditional Indian touch.

CDX’s success journey

In the past few years, there has been a major shift in people’s food habits in all metropolitan cities. In metros, people have busy life style and prefer to eat instant food. Factors like rising dual incomes, standard of living, convenience, and influence of western culture has further fuelled this trend. In response to rising demand, CDX pioneered the concept of fast, hygienic, and convenient-to-eat food to consumers on the go at affordable prices. The brand became a hugely successful takeaway concept within the few years of its inception. With its speed of service, high hygiene standards, affordability, freshness and quality of services, CDX has gained popularity and quickly reached 142 cities in India. K. Ramakrishnan, company’s founder, says, “In today’s fast paced lives, CDX is a place where the stressed metropolitan consumer can pause for refreshment before getting on with life. With its speed of service, CDX kiosk system is a hugely successful takeaway concept”.

Franchising fuels growth

The clustering mode of retail expansion helped CDX to reach its consumers easily and achieve endless success. The brand has extensive retail presence both via company-owned and franchise model. Today, the brand dominates the market in its category with a network of more than 900 kiosks across the country, of which 226 kiosks are franchisee-operated.

Hot biz opportunity for franchisees

As CDX continues to spread out across India, it is offering lucrative partnership opportunities for interested franchisees wanting to own a Coffee Day Xpress (CDX) kiosk. The brand’s franchise opportunity has proved to be a brilliant business opportunity as it offers a great profit margin. Ramakrishnan informs, “This low investment-high returns business model has proved to be a success with all our 900+ outlets across the country. The simplicity of the model and the promise of the return on investment (ROI) encourage us to open more outlets”. An aspirant franchisee requires an area of 50-100 sq ft in a location that has high footfalls. It is a low-risk investment with lots of advantages. A franchisee is entitled to a well equipped plug-and-play kiosk fully operational within three weeks of the franchise agreement being signed.

Challenges

However the businesses approach that CDX followed has served the company and its associates well, but there are few challenges to face likely sustain the growth, and competition from domestic players. Ramakrishnan says, “While kiosks are a successful business format there are a few challenges like sustainability, securing a good location and selling the product in style. When selling the product, one should give proper attention to the customer’s demands, while maintaining the quality of the product and focusing on an efficient delivery system”. In order to beat these challenges, the company will expand its market by targeting places like malls, hospitals, high street locations, airports, railway stations, corporate etc…

Finally

In India, the ‘take-away’ space is increasing phenomenally in metros. Cities are also expected to be where major fast food players are likely to expand aggressively. This the kiosk format will also grow exponentially. However, for sustainable growth, CDX will continue to bring in innovations and improvement in its business system


II- QUESTIONS:

Answers to these questions should be based on good comprehension of the case study, material learned from the textbook and online sources (i.e. e-library databases) AND their proper application to the case study

1- Explain why franchising is growing in importance nowadays. Do you think that acquiring a franchise is sufficient alone to run a successful business? Justify your answer by giving real-examples from your own environment. (20 points - 250 words)

2- Elaborate on the factors behind the expansion and growth of CDX.

Consider the strengths of the company, the local and environmental factor and the reasons that encourage its expansion as a franchise (30 points – 350 words)

3- Can the business model of CDX be considered as a successful one? Do you think it is easily adopted in other countries or it is too specific for India? (30 points - 350 words)

4- If you were to start your own business, would you wish it to be a small business or an entrepreneurial venture? Would you go for a franchise or an independent small business? Justify your answers and mention the type of activity your business would be involved in. (20 points - 250 words)

III- GRADES DEDUCTION:

TMA Presentation: (up to 5 marks)

Up to 5 marks should be deducted for poor presentation or poor organization of the TMA outline and discussion or TMA presented without PT3.

Proper referencing: (up to 5 marks)

Referencing should be both in-text referencing, plus a list of references at the end using Harvard style. Up to 5 marks should be deducted for poor referencing.

Use of E-Library: (up to 5 marks)

A minimum use of 2 articles from AOU e-library is required to support the discussions. Up to 5 marks should be deducted for no use or poor use of e-library.

Word count: (up to 5 marks)

The answers should be within the specified word count. A deviation of 10% is acceptable; if more, a deduction up to 5 marks will be applied.

IV- AOU POLICY ON PLAGIARISM:

Arab Open University Definitions of cheating and plagiarism:

Plagiarism means copying from internet, from unreferenced sources, from other students’ TMAs or any other source. Penalties for plagiarism range from failure in the TMA or the course, to expulsion from the university.

According to the Arab Open University By-laws, thefollowing acts represent cases of cheating and plagiarism:

· Verbatim copying of printed material and submitting them as part of TMAs without proper academic acknowledgement and documentation.

· Verbatim copying of material from the Internet, including tables and graphics.

· Copying other students’ notes or reports.

· Using paid or unpaid material prepared for the student by individuals or firms.

· Utilization of, or proceeding to utilize, contraband materials or devices in examinations.

Penalty on plagiarism: The following is the standard plagiarism penalty applied across branches as per Article 11 of the university by-laws was revisited and modified to be more explicit with regard to plagiarism on TMAs. Penalties include the following:

1) Awarding of zero for a TMA wherein more than 20% of the content is plagiarized.

2) Documentation of warning in student record.

3) Failure in the course to dismissal from the University.

V- PT3 FORM

Use of PT3 form is mandatory as a cover page for your TMA. This form is provided to you by your tutor or posted on LMS. TMA presented without PT3 form is subject to grades deduction. This PT3 form will be used by your tutor to add comments and marks and will be returned to you with the annotated work.

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