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International Business Expansion Of Chili

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Questions:

Disucss about the Marketing Expansion Plan for Chili’s Restaurant.
 
 

Answers:

Introduction

This report is based on the analysis of a particular company and the industry where the company is based in. The analysis is based on the plan of market expansion of the company internationally. The competitors of the company are also analyzed in this case and the target customers of the company. The company that is taken into consideration is Chili’s Grill & Bar restaurant. This is an American style casual type dining restaurant that mainly depicts the Tex-Mex type of cuisine. This restaurant was established in the year 1975 in Texas by Larry Lavine. The restaurant chain is currently owned by Brinker International. The first location of the company on Greenville Avenue in Texas.

Discussion about the company and the industry related to it

Analysis of the industry

The marketing strategies of a company can be of two different types, which are domestic marketing and international marketing. Domestic mainly defines the type of activities related to marketing which are performed within the boundaries of a specific country. This type of marketing activity is confined within the customers within a specific country (Albayrak, 2015). The advantages of domestic marketing are, the communication barriers are less, the data related to the consumers is easily accessible, the competition is less, the company has knowledge about the taste and preferences of the consumers. International marketing is the type of marketing is the type of marketing which is not confined within the boundaries of a specific country (Alon, Ni & Wang, 2012).

There are some challenges related to the international marketing strategies of a company. The cultural and social differences between two countries, the barriers related to language and the difference in customer habits act as challenges for a company in its international marketing activities. In this case, Chili’s is a chain of restaurants that is headquartered in Dallas, Texas. The analysis is based on the expansion of this company in New Zealand. The reason behind this observation is the absence of a restaurant of Chili’s in this country. The concept of the restaurant is unique and it offers a variety of cuisine of the Tex-Mex style (Chilis.com., 2017).

 

Analysis of the company

Chili’s is a casual and fun dining restaurant that opened its gates in the year 1975 in Dallas. The restaurant was opened by converting a post office to create a little joint that was funky in nature. The main attractions of the restaurant are its burgers, fajitas and ribs. The restaurant mainly promotes gatherings with friends and family. Chili’s has its branches in around 32 countries in the world (Chilis.com., 2017). The restaurant has recently completed its 20 years of operation. Chili’s Inc. is now a part of Brinker International and the menu of the restaurant includes a variety of options like, appetizers including burgers, sandwiches, fajitas, tacos, burritos and quesadillas. The restaurant has its operations in many different countries in Europe, Asia, Middle East, Central America or South America and Africa (Chilis.com., 2017).

These countries include, India, Japan, Indonesia, Malaysia, Singapore, Russia, Germany, Bahrain, Kuwait, Jordan, Lebanon, Qatar, Oman, Saudi Arabia, Canada, Mexico, United States, Brazil, Peru, Morocco and many more. The restaurant features in 1580 locations in the world among them some are owned by the company itself and some are franchised. The international operations of the company have been successful and it has shown huge growth since its inception in the year 1975. The restaurant chain is thereby suggested to open their branch in New Zealand as this is one of the places where they are not operating currently (Baum, Schwens & Kabst, 2013).

Analysis of the environment (PESTLE Analysis)

Political factors – New Zealand is a stable democratic country and the political system is based on the British model. The political conditions in this country provide a safe and profitable business environment. This factor implies that the business of the restaurant will be feasible in this country (Cadogan, 2012).

Economic factors – New Zealand has a strong economic environment and the policies taken by the government have also facilitated the economic growth of the country. The country has a flourishing tourism industry and this factors is favorable for the growth of the restaurant business in this area. So, it can be said that Chili’s can plan to open its branch in this country and this will help the company to grow as the tourism industry is closely related to restaurant business (Chen & Miller, 2012).

Social factors – The social factors of a particular country or region are related to the families and religion of the group of individuals of that particular area. The citizens of New Zealand are social in nature and show a lot of hospitality to people. This factor will contribute to the success of the restaurant in this area. The reason behind this is mainly the people here, who are welcoming to different cultures (Fleisher & Bensoussan, 2015).

 


Technological factors – New Zealand has the fastest growing technological sector. The improvement in technologies in the recent years has promoted massive production. The technological change in New Zealand is not uniform in all parts of the country, as the vision of the effect of this technological advancement on the economy of the country is not quite clear. This can prove to be a hindrance in the growth of the restaurant in this area. The reason being that the technological environment of New Zealand will not contribute to the advancement of the restaurant chain (Hitt, Ireland & Hoskisson, 2012).

Legal factors – The legal system of New Zealand is also related to the English laws and rules. The system of judiciary of this country is robust and independent. The legal framework of this country is sound in nature and is further supported by independent and free media and also ensures transparency levels that are high in the decision making system of the corporates and the government as well. This sound and transparent legal framework will be helpful in the expansion process of a new foreign company as many types of legal bindings are associated with international expansion of a company (Ivens & Valta, 2012).

Environmental factors – The environmental factors in New Zealand are suitable for the success of the restaurant in this area. The reason behind this statement is the huge wealth of natural resources and the fresh produce of different varieties of fruits and vegetables that will facilitate the growth of the restaurant in this country (Khan, 2014).

Cultural differences between the two countries

The culture in New Zealand is of the laid back type and is dynamic and unique. The culture of this country is influenced by both the European as well as British customs. The country is also affected by the Polynesian and Maori culture. The culture of this country is a mix of different cultures which include the Pakeha culture and the Maori culture. The people of New Zealand are highly educated and sophisticated people and represent the vibrant and unique society which is multicultural in nature (Kim & Mauborgne, 2014).

The United States has a population of around 325 million and acquires the third position in terms of land area. The population of the country is a mix of Native Americans and a huge number of immigrants from different parts of the world. Owing to this reason the country is considered to the most diverse country in terms of culture. The American culture is influenced by almost every culture from around the world. The American culture also influences all the cultures in the world (Michalski, 2015).

 


From the discussion above it can be derived that the difference in culture between the two countries lies in the diversity. While the US culture is influenced by many cultures in the world, it is much more diverse as compared to the culture in New Zealand.

Analysis of the competitors of the company

The restaurant that is recommended for expansion in the country of New Zealand will have to face stiff competition in this area from the top restaurants in this country. New Zealand is a country which lots of natural resources and tourist attractions as well. This factor facilitates a boost in restaurant business as it is directly related to the tourism sector (Upson et al., 2012). Two examples of the competition of Chili’s in New Zealand are as follows,

  • Depot Eatery and Oyster Bar is a restaurant located in Auckland Depot and is under the highly recommended lists of restaurants. This is also a casual dining restaurant and has bar where oysters and shell fish are served. The main weakness of the restaurant is the absence of the beer or wine bar which is one of the main attractions in Chili’s.
  • Food Truck Garage is also a restaurant that is located in Auckland and offers healthy and tasty fast food. This restaurant serves fast food in the American style. The weakness of this restaurant is the limited customer base as it only serves in a truck and does not have fine dining facilities. On the other hand, Chili’s offers American cuisine with a casual approach in the fine dining environment (Zhou, Wu & Barnes, 2012).

Target customer analysis

The target customer segment of Chili’s in New Zealand are the tourists and the local people as well. The restaurant offers quality food in a casual dining environment and this will help in attracting customers who are searching for American style food in a casual dining restaurants along with drinks and beverages. This is a unique concept for a restaurant in this area (Yüksel, 2012).

Strategies of market entry

The market entry strategy refers to the various ways in which a company plans to enter a foreign market in such a way so that the levels of risks are low and the company can gain high returns. There are many different strategies that can be applicable for entry of a particular company in the foreign market. The different strategies include, direct exporting, franchising, licensing, joint ventures, partnering, buying any company, turnkey projects, piggybacking and greenfield investments (Albayrak, 2015).

 


The market entry strategy that is recommended for Chili’s in New Zealand is Franchising. This strategy is the best suited to food outlet, as the levels of risks are low and the restaurant can gain swift market expansion. The reason behind the selection of this strategy is that the business model of the company is repetitive in nature. The brand of Chili’s is highly recognized in the world, and this will facilitate the strategy of franchising (Zhou, Wu & Barnes, 2012).

Strategies of marketing mix

Marketing of a particular organization can be defined as the set of marketing tools that can be used by a company so that they can receive the response that is desired by the company from the target market. Marketing mix of a company consists of 4 Ps which include, Product, Price, Place and Promotion (Alon, Ni & Wang, 2012). The marketing mix plan for Chili’s restaurant is as follows,

  • Product – The products that are offered by the restaurant will remain the same as in all other countries of the world, which include, the appetizers, burgers, enchiladas and fajitas, main course, soups and salads, grills, tacos, seafood and many more.
  • Price – The appetizers should be priced between 6 dollars to 10 dollars, the salads need to be priced between 4 dollars to 10 dollars, burgers and sandwiches should be priced between 6 to 10 dollars and the burritos should be priced between 8 to 10 dollars (Baum, Schwens & Kabst, 2013).
  • Place – The restaurant should be located in Auckland city of New Zealand. This area has beautiful natural beauty and is a perfect holiday destination. This area attracts lots of tourists who can thereby increase the revenue of the restaurant.
  • Promotion – The promotional activities of the restaurants can be done by digital marketing methods, which includes the use of social media and other ways of marketing (Cadogan, 2012).

Recommendations

The recommendation states that the Chili’s restaurant venture can be successful in New Zealand. The restaurant will prove to be profitable for the management of the organization. This expansion can open new avenues for the restaurant chain.

Conclusion

The report can be concluded by stating that the international business expansion of Chili’s will be profitable for the restaurant chain and it will be suitable for the country as well. The restaurant has its branches all over the world, so it is advisable for the company to set up a branch in New Zealand as well. The reason being that Auckland city of New Zealand is blessed with natural beauty and is a center of attraction for tourists, which in turn will be profitable for the restaurant business.

 

References

Albayrak, T. (2015). Importance performance competitor analysis (IPCA): A study of hospitality companies. International Journal of Hospitality Management, 48, 135-142.

Alon, I., Ni, L., & Wang, Y. (2012). Examining the determinants of hotel chain expansion through international franchising. International Journal of Hospitality Management, 31(2), Gupta, A. (2013). Environmental and pest analysis: An approach to external business environment. Merit Research Journal of Art, Social Science and Humanities, 1(2), 13-17.379-386.

Baum, M., Schwens, C., & Kabst, R. (2013). International as opposed to domestic new venturing: The moderating role of perceived barriers to internationalization. International Small Business Journal, 31(5), 536-562.

Cadogan, J. W. (2012). International marketing, strategic orientations and business success: reflections on the path ahead. International Marketing Review, 29(4), 340-348.

Chen, M. J., & Miller, D. (2012). Competitive dynamics: Themes, trends, and a prospective research platform. The Academy of Management Annals, 6(1), 135-210.

Chilis.com. (2017). Restaurant Menu - Order Online for Lunch & Dinner | Chili's. Chili's Grill & Bar Restaurant. Retrieved 4 November 2017, from https://www.chilis.com/menu

Fleisher, C. S., & Bensoussan, B. E. (2015). Business and competitive analysis: effective application of new and classic methods. FT Press.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2012). Strategic management cases: competitiveness and globalization. Cengage Learning.

Huang, R., & Sarigöllü, E. (2014). How brand awareness relates to market outcome, brand equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132). Springer New York.

Ivens, B., & Valta, K. S. (2012). Customer brand personality perception: A taxonomic analysis. Journal of Marketing Management, 28(9-10), 1062-1093.

Khan, M. T. (2014). The concept of'marketing mix'and its elements (a conceptual review paper). International journal of information, business and management, 6(2), 95.

Kim, W. C., & Mauborgne, R. A. (2014). Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press.

Michalski, E. (2015). Foreign market entry strategy. Acta Scientiarum Polonorum. Oeconomia, 14(2).

Upson, J. W., Ketchen, D. J., Connelly, B. L., & Ranft, A. L. (2012). Competitor analysis and foothold moves. Academy of Management Journal, 55(1), 93-110.

Yüksel, ?. (2012). Developing a multi-criteria decision making model for PESTEL analysis. International Journal of Business and Management, 7(24), 52.

Zhou, L., Wu, A., & Barnes, B. R. (2012). The effects of early internationalization on performance outcomes in young international ventures: the mediating role of marketing capabilities. Journal of International Marketing, 20(4), 25-45.

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