Qustions Essay Example | Topics and Well Written Essays - 750 words

Qustions - Essay Example Franchising can also generate high financial returns for relatively little risk since little money is put into each location. Franchise business model leads to lesser control over managers since the franchisees cannot be controlled as employees. Franchisees are independent businesses with different goals from the owner that may eventually lead into legal troubles. It is also not easy to get franchisees compared to hired store managers to work together and the franchisees obtain incentives to profit from each other’s efforts to generate business. There are also innovation challenges associated with franchising since when an individual comes up with an idea, there must be a negotiation with other franchisees to accept the innovation. Porter’s Five Forces technique is a very significant tool, which attempts to point out at some of the significant strength in every business situation. These forces help in identifying some of the competitive intensity as well as overall industry profitability. The Porter’s tool highlights competition from both external and internal sources. The strengths identified by the Porter’s tool may help a business to understand her strength in the competitive position as well as the strength of a place or step that the business wants to make. It is therefore clear that by identifying strength position, business can take fair advantage, eliminate wrong situations and eventually creating sustainable advantage. Supplier power is one of the important forces, which help business to determine ease of driving up prices by the suppliers. Business may counterbalance this force by standardizing specifications in parts for it to change among suppliers easily. Business may decide to add more vendors or even change technology to eliminate coming together of strong suppliers. By standardizing specifications, adding more vendors, and