Melissa Straube

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(No Transcript)
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Expansion into Ireland
by Melissa Straube Pavan Goteti Jared
Jablonski David Sumpter
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Introduction
Northern Ireland
England
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Demographics
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Demographics cont.
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Culture

• Irelands culture is similar to the United States
• Low PDI (Power Distance Index)
• Employees rule!
• Uncertainty Avoidance Index (UAI)
• Ireland is more acceptable to risk than the U.S.

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Culture cont.

• Masculinity vs. Femininity
• Ireland is more masculine than the U.S.
• Collectivism vs. Individualism
• Ireland is more collective oriented protecting
  current and future generations
• U.S. is more individual oriented people pursue
  their own economic self-interest

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Business Culture

• Normal Business Hours 900 a.m. to 500 p.m.
• Length of work week 37 to 40 hours
• Holidays (Employees) Act of 1973
• Mandatory 3 weeks paid vacation
• Time off for the statutory public holidays
• Familiar modes of doing business
• Luncheons
• Receptions and Dinners

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Business Culture

• While meeting with someone
• It is normal to shake hands
• Men should not initiate a handshake with a woman
• Handshakes can also be exchanged before departure
• Irish tend to be more relaxed when it comes to
  time
• Irish are very informal using first names
• Travelers are advised not to compare the Irish
  with the English or refer to the Irish as
  Europeans

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Business Culture

• Visitors are expected to maintain a low and
  moderate tone of voice
• Like Americans, the Irish love their personal
  space
• Rare period of silence - There is something
  seriously wrong
• Irish businessmen dont like to say No
• Expect answers like Maybe, Lets see

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Business Culture

• August and December are popular vacation times
  and are not the right time for business deals
• May is time for business fairs and businesspeople
  will be busy traveling
• Abbreviations like "Mr.", "Mrs.", or "Miss." are
  considered words in Ireland
• Dress
• Men- No Flashy or Ostentatious clothes
• Women- Suits or blazers with conservative blouses
  and skirts

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Economic Analysis

• Trade dependent economy with growth averaging 8
  from 1995-2002
• Industrial sector accounts for
• 45 of GDP
• 80 of exports
• Exports account for more than 82 of GDP
• Ireland has GDP (purchasing power parity) of
  111.3 billion and GDP per capita (purchasing
  power parity) of 28,500

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Economic Analysis

• GDP composed of
• 60 Services
• 36 Industry
• 4 Agriculture

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Economic Analysis

• Reasons for rapid economic growth
• Increases in consumer spending patterns
• Heavy construction and business investment
• EURO currency system was launched in 1999
• Revenues - 36 billion
• Expenditures - 27 billion incl. capital
  expenditures
• External debt - 11 billion
• The unemployment rate in Ireland is very low at
  4.1
• Ireland exports to the U.S. - i16.5 billion
• Ireland imports from the U.S. - i8.1 billion

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Industrial Economy

• Mainly an agricultural economy until 1950
• Turnips, Barley, Potatoes, Sugar beets, Wheat,
  Beef and Dairy products
• Industrial sector confined mainly to indigenous
  industries serving the home market
• Food products, Brewing, Textiles, Clothing,
  Chemicals, Glass Pharmaceuticals, Machinery,
  Transportation equipment, Crystal and Software
• Industrial production grew at 14 in the year
  2000 and 6 in the year 2002

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Industrial Economy

• Electricity
• Total electrical production - 22.285 billion kWh
• Consumption - 20.823 billion kWh
• Fossil fuel accounts for 94.42
• Hydro 4.23
• Others 1.35
• Total Exports - 85.3 billion
• Total Imports - 48.3 billion

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Infrastructure

• Telephone
• 1.6 Million Landline Users
• 3.0 Million Mobile Phone Users
• 22 Internet ISP Providers
• 1.0 Million Subscribers
• Transportation
• 44 Airports
• 3 International (Dublin, Shannon, Cork)
• 92,500 km of Highway
• Bus Services, Railways

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Currency

• Euro
• Launched in January 1999
• Took affect in January 2002
• Irish Pound is subdivision of Euro
• No exchange Controls
• Effective January 1, 1993
• No restrictions on
• Repatriation of earnings
• Capital royalties
• Interest Payments

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Labor
Scale 1 to 10, 10 being best
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Labor cont.
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Labor cont.
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Labor cont.
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Political

• Parliament
• House of Representatives (Dail)
• Senate (Seanad Eireann)
• President
• Prime Minister

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Legal

• Based on English Common law
• Supreme Court Judges appointed by President

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Ireland Conclusion

• Comparable to the United States
• Stable economy
• Low inflation

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Our Focus

• To quickly find a Master Franchisee to start
  Quiznos operations in Ireland

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Sub Industry Competition

• Subway is by far 1
• More Subways in US than McDonalds
• Quiznos has passed Blimpie and is now 2
• Blimpie has been struggling in recent years

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Store Numbers
http//www.entrepreneur.com/franzone
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Franchise Costs
http//www.entrepreneur.com/franzone
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Franchising Basics

• The types of owners
• Franchisor like Quiznos
• Master Franchisee experienced business person
• Franchisee buys franchise

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Master Franchisee

• A Master Franchisee is usually in charge of a
  geographical area like Ireland
• A good candidate would be a business person or
  company with experience in the food industry,
  running marketing campaigns, knows the suppliers,
  etc.
• They run everything in the geographic location,
  so pick them wisely

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Master Franchisee cont.

• They are the franchisors representative in the
  area and are in charge of such things as
• Finding franchisees
• Setting up supply lines for materials
• Finding sites for stores (along with franchisees)
• Regional Marketing
• Oversight and inspection of franchisees and the
  stores

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Franchise vs. Other Ownership

• The franchisors concerns are
• Overall economic soundness
• Overall political soundness
• Will the product sell
• Industry competition
• Franchisor is less concerned about detailed local
  labor, marketing, etc. issues
• Franchisees worry about these things

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Strengths in Ireland

• 2 in Sub Market
• More upscale than Subway
• Hot sandwiches, cold Irish weather!
• Better change management than Subway
• Plenty of international experience in overseas
  markets, many of which are non-western cultures
• Quiznos already in England

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Master Franchises
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Weaknesses in Ireland

• Subway already established (10 stores and
  growing)
• Time is of the essence
• Even with experience in other places, Ireland is
  still a new market
• Some prime locations may be taken

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Opportunities in Ireland

• Subway not entrenched, yet
• No other entrant, yet
• Market looks promising
• Can reflect Irish market wishes easier than
  Subway (change management)
• Coffee House upscale look more appealing than
  Subways look
• Quiznos already has more selection of items
• coffee, cappuccino, deserts, etc.

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Threats in Ireland

• Bad Master Franchisee
• Time
• Other entrants like Blimpie
• Local eateries

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Alternatives to Ireland

• There where no alternatives on how to enter the
  market, Quiznos and the other sub shops are all
  franchisors
• The choice was amongst the geographic areas laid
  out by Quiznos

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Alternatives to Ireland
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Davids Top 10 on Why Ireland

• 10. Good economy
• 9. No limits on repatriating funds
• 8. Good demographics (large 1834 age group)
• 7. Franchises in England already established
• 6. Predominately English speaking

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Davids Top 10 on Why Ireland

• 5. Hot subs, cold climate
• 4. Quiznos Coffee House atmosphere should be a
  hit
• 3. Subway already there but not entrenched yet
• 2. No other entrants
• 1. We could all spell Ireland

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Goals in Ireland

• Find Master Franchisee within 6 months
• This will be done thru advertising, franchising
  trade shows, and business contacts
• First store open in 1 year
• 10 stores minimum in 2 years
• Ten stores is usually enough to support a
  regional add campaign and make it worthwhile
• This tight schedule will limit how far ahead
  Subway gets

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Thank You