Chipstix in Abu Dhabi: Developing Market Competition in Franchised Businesses Case Synopsis Mona Al Alawi, the owner of Chipstix in Abu Dhabi, is having difficulty deciding whether to keep the franchised name of Chipstix in Abu Dhabi and the rest of the UAE, except for Dubai and Al Ain, and live with the financial losses that she is suffering and struggling from, or sell the franchised name to someone else who can handle this business better. The financial losses have increased after the owner made a bad decision by expanding the business before returning the starting up capital. From the start, it was obvious that the owner was very excited about the unique product and wanted to make the business generate a profit. However, after few years managing the business, the owner realised the business challenges and faced stiff market competition. Theoretical perspective Chipstix has adopted the resource based theory which has helped it organise its resources and skills to fit the needs of the customers. Identification of the environment, especially the competitors, by a company plays a major role in determining the competitiveness of the company (Grant, 2001). Chipstix has allocated part of its resources in carrying out market environment analysis and information gathering. Chipstix has established equilibrium between the internal and external environment, which has influenced its good performance. The company has established a strategy of approaching different geographical locations differently. This is because different locations have unique features and people who require varying services. The tailoring of services to fit the needs of people allows Chipstix to retain a competitive advantage. Perfect information is always gathered within the company to ensure that the trends in the market are clearly understood, and this maintains the company’s position in the market (Grant, 2001). The company has also utilized the theoretical perspective to come up with innovative services that create increased loyalty from customers. Company Background Chipstix Company initially started in South Africa and it has expanded its operations to different parts of the world. As part of the company’s expansion process, two different owners in the United Arab Emirates bought franchises, first in Dubai in 2008 and then in Abu Dhabi in 2010. The company deals with the sale of special potatoes that that are cut using a patented technological machine and served on a stick for easier handling. Currently, Chipstix acts as a global franchise company with its headquarters in the United Kingdom. There are around 40 countries in which the company operates (Huffington Post, 2014). Abu Dhabi is one of the cities that have recently gotten exclusive rights to operate Chipstix kiosks (see Figure 1).
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- Spring '12
- Business, Management, United Arab Emirates, ABU DHABI, Chipstix