Osha Resturant Entry Mode in UK

Author: Iloka Benneth Chiemelie
Published: 5th May 2018

Definitions

Prior to discussing the type of entry mode that Osha will adopt in the UK, it is important to gain an understanding of what the entry modes are in business and what is implied by each of these rules (Angelis, 2016). Businesses can internationalize by combining with other businesses that are on the same level in order to form a new organization (normally baring the same name) and this is known as merger. On the other hand, acquisition can also be adopted and it involves businesses acquiring other businesses (normally those that are smaller than them) by acquiring its assets and gaining control of its shares (Slywotzky, 2003). Also, companies can internationalize by setting up a joint venture, which can  done with two or more business partners in order to conduct business activities in the international markets, sharing both loses and profits are they occur. There are some organizations that like to retain their business process by starting up a wholly owned subsidiary. The subsidiary can either follow the same line of business or actually undertake an entirely different line of business on its own.

Entry Modes Pros & Cons

The main reasons why businesses go for acquisition is because it is a faster and easier way to internationalize, and it also allow them to acquire all aspects of the company – its business process technologies, clients and so on. However, the issue with acquisition is that the company will also be acquiring the losses and issues with the business (Tripadvisor, 2014). Additionally, merging the cultures of the acquiring and acquired companies can sometimes be very difficult due to the differences in both national and corporate approaches to business.

Joint venture does come with its advantages, which mainly features the understanding that it involve or more businesses coming together, making it easy for risk bearing as they will have to share both the profits and loss. Since the two or more businesses are coming together to form a unit, their forces are made more formidable and the managements combine their expertise to deliver a more lethal effect on the business process. (alfanarrestaurant, 2014) However, the disadvantage is that the profits are shared, which limits the overall earnings for the company. Additionally, it is important to consider the fact that these managements can have varied views to businesses, making it difficult for them to co-exist.

Fully owned business is one of the best approaches for internationalization. This is because it also the company to set up its own business in the international market exactly the way it desires – normally depicting a replica of the home country’s business (with the same culture and values). Additionally, the company will retain all profits (enhancing overall earnings in the process that the outcomes are profitable) (Tripadvisor, 2014). However, it is important to consider the fact that the company will also have to bear all losses and business risk on its own, and huge financial investment is required as it will have to start the business from scratch.

Chosen Entry Mode

In line with the PESTLE analysis, it is clear that the UK does present a viable business opportunity based on the understanding that it has a stable political, economic, and legal structures, with a culturally diverse society that shows much concern on environmental sustainability. Additionally, the country is highly advanced in technologies, ensuring that the business process are made effective and efficient (Angelis, 2016). On that ground, the chosen mode of entry is fully owned businesses. This entails Osha starting up its own subsidiary in the country. The main reason for this is because the company operates in the food sector, offering products and services that are very much unique with the historical Arabian world – something that would be hard to find in the UK. Thus starting up a whole new venture will ensure that it is able to design the business process, products and services exactly the way it wants (in order to carry along with it the values it has created in their local market). Additionally, the company will be able to enjoy full benefits of the business is success is ensured. Success is possible because the UK is a very diverse society with numerous Arabian communities that will value the opportunity of experiencing an Arabian lifestyle in its grassroots form.

SWOT Analysis

SWOT analysis is one of the best approaches for understanding the strength, weaknesses, opportunities and threats of any given business. The significance of this is that it can be carried out on the company, its products and services and the management. The understanding gained from such analysis can be used to redefine the business process in order to create a more reliable condition for ensuring profitability of the business. Effectively, issues with the business can easily be highlighted with focus shifted to expected opportunities.

Strengths: are the numerous resources and capabilities that a company have, which it utilizes to offer high value in its business process. The strengths of Osha restaurant are:

·         Uniqueness: their products are very unique as they represent historical food cultures and cuisines of the Gulf nations.

·         Unique decorations: they restaurants are stylishly decorated in order to offer a similar feeling of being in the traditional Arabian homes. The interior are made up of wooden round tables with chair that have red toppings to reflect the traditional settings. The dining halls are very specious as well.

·         Affordable prices: they offer meals that are affordable for everyone, ensuring that the general populace can be able to enjoy their products and services.

·         The restaurant has high competitive advantage on the ground that it is one of the best when it comes to offering high quality Arabian feeling in the industry.

·         The restaurant is located in Masdar City, a top spot for pot tourist and other recreational visitors, offering the company the opportunity of serving both local and international clients.

·         There is a selection of ryoog (breakfast) combinations on the menu, featuring both local and international cuisines, in a way that it try to bring the old and new together through quality products and services.

·         Osha also has strong reputation and its products are Halal, something that those who value Arabian dishes will always consider (Johnson, 2016).

Weaknesses: are the business gaps that occur as a result of the absence of certain strengths required to make the business process a success. The weaknesses recorded in the case of Osha are:

·         It has limited branches across the UAE.

·         It does not offer any delivery servcies

·         Low lightning that creates a sense of secrecy in the customers and make them less happy. (Johnson, 2016)

Opportunities: they represent external positive factors in the company that can provide them with the opportunity to boom and develop. The opportunities for Osha are as discussed below.

·         The company can develop new products and meals at wish.

·         It can develop new tastes and flavors.

·         It can easily internationalize abroad.

·         It can respond to the ideas of end users.

·         It has the opportunity of expanding its business across the UAE,

·         They can develop new product lines that feature season’s meals. (Johnson, 2016)

Threats: they are the negative external factors that but the overall chances of the business to succeed at a great risk. The threats facing Osha are as discussed below.

·         There are numerous competitors and limited barriers of entry, which impacts on the company’s overall share value in the sense that these competitors can always reduce their customer and sales volume.

·         The world is continually suffering numerous economic challenges, limiting the overall spending power and intention from customers. Thus, the expected volume of sales will also be affected in this case. (Johnson, 2016)

References

alfanarrestaurant. (2014). Our Storyline. Retrieved from Flavor of the Emirates: http://www.alfanarrestaurant.com/aboutus.aspx#abt

Angelis, A. D. (2016, 10 5). UK Restaurant Industry. Retrieved from Yahoo News: https://uk.finance.yahoo.com/news/uk-restaurant-industry-000000282.html

Johnson, S. O. (2016, 3 2). Abu Dhabi’s Osha restaurant serves up classic Emirati dishes done right with a few twists. Retrieved from The national: http://www.thenational.ae/arts-life/restaurant-reviews/abu-dhabis-osha-restaurant-serves-up-classic-emirati-dishes-done-right-with-a-few-twists

Slywotzky, A. (2003, 1 11). Improving the practice of management. Retrieved 10 8, 2014, from iveybusinessjournal: http://iveybusinessjournal.com/topics/strategy/six-principles-for-making-new-growth-initiatives-work#.VEL3BPmG9rU

Tripadvisor. (2014). Best Restaurants in London, United Kingdom. Retrieved from Trip Advisor : https://www.tripadvisor.co.uk/Restaurants-g186338-London_England.html