The report also looks in details some benefits that Upali’s restaurant will enjoy and challenges it may face once it has gone international (Cairncross 2015). The report also recommends a joint venture as a market entry strategy for Upali’s Restaurant into Dubai. Lastly, the report provides recommendations to Upali’s Restaurant which will oversee the successful implementation of the global strategy. Introduction Upali’s Restaurant is a unique firm located in Sri Lanka; the firm offers a flavor of the unique culinary and truly local experience. The restaurant is well known not only by the local people of Sri Lanka but also by the rest of the world due to their seasoned signature dishes which are par the excellence (Hettiarachchi, De Silva & Sivashankar 2015).
Benefits of International expansion A global strategy may seem a good idea to many. However, such a strategy may be beneficial while at the same time it may also face a lot of challenges (Hill 2008). Upali’s Restaurant has a well brand name and going international may bring the following benefits; 1. Access new regional markets, this will create room for new customers. Economies of scale in that, it will attract new customers and clients in the new markets. As a result of unpredictable fluctuations and competition in the market, it can lead to reduction in domestic customers. Challenges 1. Language and cultural barriers, this will be a major challenge for the firm, the reason being people in Dubai speak Arabic while those in Sri Lanka speak Sinhala.
2 Tightened immigration rules and regulating policies. Tight and strict immigration rules and policies are likely to pose a challenge to Upali’s Restaurant; this can even hinder it from more expansion. The report indicates that Dubai is expected to exceed its retail sales by more than $43 billion by the year 2020 (Shenkar, Luo & Chi 2014). Dubai also has a large market which accommodates all industries including the food service industry, Dubai markets are expected to grow at a rate of 11% by 2020. This makes Dubai the appropriate economy where the restaurant can invest in and become profitable. Being an international economy where various firms and individuals have invested and having a large population as compared to other countries, provides a large target market for the restaurant (Thunø 2007).
The government also recently lifted laws and policies which were restricting foreign companies and organizations from operating In Dubai. The cultural differences, however, pose a challenge to the Upali’s Restaurant, the reason being the two countries have different cultures. Market Selection and Segmentation Upali’s restaurant will have the following segmentation. A. Demographic Segmentation. In this particular segmentation, Upali’s restaurant will consider the workforce from their domestic country. Here considerations such as interests and occasions dear to the people will be offered at affordable prices. D. Behavioral segmentation. This particular segmentation will be based on climate changes and working patterns. Upali’s restaurant has considerations on the buying behavior, income levels and leisure times (Jonsson & Foss 2011). The restaurant plans to use joint venture as a market entry strategy.
Recommendations • Upali’s Restaurant should first consider culture before joining the Dubai market. This is because cultural difference plays a major role in the success or failure of a business (Luo & Tung 2007). • The restaurant should also venture into another industry reason being it has the capability, well-established brand, able and competent leaders as well as good connections with suppliers. • The restaurant should also put into consideration regulatory and legal barriers which can hinder the business from freely trading. and Hefeker, C. Political risk, institutions and foreign direct investment. European journal of political economy, 23(2), pp. Brouthers, K. D. and Schott, P. K. Firms in international trade. Journal of Economic perspectives, 21(3), pp. Bujisic, M. F. and Hines Jr, J. R. Foreign direct investment and the domestic capital stock.
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