lecture 8 Flashcards
Determinants of Gap 3
Channel confict over objectives and performance
Channel conflict over costs and rewards
Difficulty controlling quality and consistency across outlets
Tension between empowerment and control
Franchising
1) Product/trade franchisor
a) manufacturer-distributor
e.g. Car dealers, gas stations
b) manufacturer-wholesaler
e.g. Coca-cola or pepsi
c)Wholesaler-distributor
e.g. Buying association, SPAR, intertoys
2) Business Format Franchising (consistent in operations of all outlets)
e.g. Mcdonalds, body shop, benneton, tie rack, Albert heijn
3) Conversion Franchising (including new stuff to your format (think hes talking about hotels))
e.g. Fixet, best western
What is the reason why franchising is so popular
its a way to grow, which requires money
Resource scarcity:
Large amounts of capital are needed to grow
Agency theory becomes important:
Principal = franchisor
Agent = Franchisee
Goal DIvergence is lower than for hired managers as franchisees have incentive to maximize (his) profits
Motivations for franchising (franchisee and franchisor)
Franchisor: 1) capital advantage
2) possibility to decrease distribution costs
3) Higher motivation of management
Franchisee:
1)reduction of insecurity
2) higher customer acceptance
3) lost of assistance
4) low financial barriers
5) Larger possibility on big profits on the SHORT term
Royalty rate
Must adjust, if its high they can advertise but franchisee doesnt have money, other way around the other way
outsourcing
An agreement in which the outsourcing firm deleages (part of) the activities that the firm used to perform internally to another company which is the outsourcing provider
Why do companies outsource
1) reduce and control operating costs
2) improve company focus
3) gain access to world class capbilities
4) Free internal resources for other purposes
5) resources are not available internally
6) accelerate reengineering benefits
7) Function fdifficult to manage/out of control
8) make capital funds available
9) share risks
doesnt include increasing service quality
success of outsourcing
enourmous growth of outsourcing but…
25% of arrangements fail within 2 years
50% arrangements fail within 5
80% of customer support arrangements that focus on services fail
Near-shor vs Off-shore outsourcing of customer contact:
call center
email contact
acquisition
All customer
Near shore close, offshor is far
Outsourcing (consumers prefer services from)
Their own country
More economically developed countries
countries with closer cultural distance
Outsourcing works better for companies/countries with
a good reputation
E.g. ski resort
Paper with ski resort one in france one in switzerland same story same pics but the swiss hotel was evaluated better than france one
Outsourcing influences expecations and antiipated satisfaction
Outsourcing CC
Outsources services are part of PSQ
Off-shore and near-shore outsourcing has negative impact on PSQ, satisfaction and loyalty
Loss of expertise (consumer info)
more intermediaries that have impact on PSQ
Online intermediaries
Transportation companies (delivery of your goods)
Insurance brokers (specific example, bad broker bad insurance but not issue with insurance company)
Physical evidence
a) the environment in which the service is delivered and where the firm and the customers interact and
b) any tangible commodities that facilitate performance or communication of the service
Physical evidence
facility exterion (design, signage, parking, landscape)
Facility interior(interior design, equipment, layout)
Other tangibles: business cards, stationery, billing statements, reports, employee dress, uniforms)
