Successful-Franchising-in-Brazil - SUCCESSFUL FAST-FOOD...

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SUCCESSFUL FAST-FOOD FRANCHISING IN BRAZIL AND THE ROLE OF CULTURE: FOUR CASES By MARY E. RISNER A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS UNIVERSITY OF FLORIDA 2001
ii ACKNOWLEDGMENTS I would like to express my gratitude to Dr. Terry McCoy, my thesis committee chair, for being a helpful mentor as I have became more and more involved with the study of business aspects in Brazil. I thank my other committee members, Dr. Ginway and Dr. Perrone, for their scholarly suggestions on the Brazilian cultural issues considered in my research. I also would like to thank the Center for Latin American Studies for its financial support in the form of the Tinker Grant I received in order to conduct my research in Brazil. I sincerely thank Peter Rodenbeck, a kind and helpful businessman in Brazil, whose efforts allowed me to set interviews with key professionals associated with franchising in Brazil. Finally, I thank the all the Brazilian executives that took the time to meet with me for my research.
iii TABLE OF CONTENTS page ACKNOWLEDGMENTS .................................................................................................. ii LIST OF TABLES ............................................................................................................. vi CHAPTERS 1 INTRODUCTION ........................................................................................................... 1 Significance of the Study ................................................................................................ 2 Franchising ...................................................................................................................... 3 Definition .................................................................................................................... 3 Standardization vs. Adaptation ................................................................................... 5 Franchising In Brazil ....................................................................................................... 5 Organization of the Study ............................................................................................... 8 2 REVIEW OF THE LITERATURE ................................................................................ 10 International Franchising Research ............................................................................... 10 Why Expand Internationally? ................................................................................... 10 Advantages of Franchising Over Other Foreign Investment .................................... 12 Entry Modes .............................................................................................................. 13 Franchising Studies on Brazil: Contributions and Findings ................................... 14 The Role of Culture in International Franchising ......................................................... 16 What is “Culture”? .................................................................................................... 17 Adapting to Local Culture ......................................................................................... 18 Case Studies Dealing with Cultural Differences ....................................................... 19 Other Factors to Consider Before Franchising Internationally ..................................... 20 Brazilian Culture ........................................................................................................... 23 Hierarchy/The Elitist Tradition ..................................................................................... 27 Personalism ............................................................................................................... 28 Paternalism ................................................................................................................ 30 Malandragem (Cunningness) .................................................................................... 30 The jeito .................................................................................................................... 31 Sensualism and Attraction to Adventure .................................................................. 32 Brazilian Corporate and National Culture ................................................................ 34 Regional Differences ................................................................................................. 36
iv 3 RESEARCH APPROACH ............................................................................................ 38 Research Method-Similar and Contrasting Case Studies ............................................. 38 Inter-relational Dimensions ........................................................................................... 40 Universalism and Particularism ................................................................................ 41 Individualism and Collectivism ................................................................................ 42 Neutral versus Affective ........................................................................................... 42 Specific versus Diffuse ............................................................................................. 43 Achievement versus Ascription ................................................................................ 44 Other Inter-relational Dimensions ............................................................................ 45 Structure .................................................................................................................... 45 Thinking Styles ......................................................................................................... 46 Problem Solving ........................................................................................................ 48 Human Resource Issues ............................................................................................ 49 The Cases ...................................................................................................................... 50 Use of Case Study Method and Personal Interviews ................................................ 51 Sources of Information ............................................................................................. 52 Collection of Data ..................................................................................................... 52 4 PRESENTATION OF CASES ...................................................................................... 55 McDonald’s ................................................................................................................... 56 History ....................................................................................................................... 56 Product ...................................................................................................................... 57 Operations ................................................................................................................. 59 Store format/Location ............................................................................................... 59 Training ..................................................................................................................... 60 Marketing .................................................................................................................. 60 Customer Service ...................................................................................................... 61 Local Networking ..................................................................................................... 61 Selection of Joint Venture Partner ............................................................................ 62 Franchiser-Franchisee Relations ............................................................................... 62 Community Service ................................................................................................... 63 Dunkin Donuts .............................................................................................................. 64 History ....................................................................................................................... 64 Product ...................................................................................................................... 64 Operations ................................................................................................................. 67 Store Format/Location .............................................................................................. 67 Training ..................................................................................................................... 68 Marketing Strategies ................................................................................................. 68 Customer Service ...................................................................................................... 69 Local Networking ..................................................................................................... 69 Master Franchiser Selection ...................................................................................... 70 Franchiser/Franchisee Relationship .......................................................................... 70 Pizza Hut ....................................................................................................................... 71 History ....................................................................................................................... 71 Product ...................................................................................................................... 75
v Store Format/Location .............................................................................................. 76 Training ..................................................................................................................... 76 Marketing ..................................................................................................................

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