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The report focuses on the study of prospects of Sizzler's establishing business in India. At first, the background of the company is discussed briefly. Then, risks and threats are assessed to define clearly possible risks and problems the company is likely to face in India and has to overcome to succeed in establishing its business in this country. Finally, recommendations are developed, which vary from no and low cost options to full cost option, when Sizzler is not limited in its investments. The purchase of a Indian chain of restaurants is recommended as the best option for Sizzler Australia.
Sizzler is one of the most successful chains of restaurants in Australia. At the same time, the company keeps growing and expanding its business internationally. Today, the company operates in many countries of the world and still attempts to enter new markets, such as Indian one. In this regard, it is worth mentioning the fact that the strife of Sizzler to expand internationally is determined by natural factors such as the necessity to improve the competitive position in face of the growing competition from the part of other multinational chains of restaurants such as KFC, McDonalds and others. On the other hand, Sizzler is quite different from other restaurants, especially fast food restaurants, that put the company in an advantageous position compared to its major rivals (Best, 2004). Nevertheless, entering the new market, especially the market of India is a challengeable task and the company needs to develop a concise plan of entering the market along with the adequate assessment and analysis of its potential and current situation in the market. At this point, it is worth mentioning the fact that Indian market opens large prospects for the growth of Sizzler because of the huge economic and demographic potential of the country and availability of Sizzler's products and services to the mass audience.
Background of the company
Sizzler has proved to be one of the most successful chains of restaurants in Australia. The company has an extensive experience of operations and work in the field of restaurant business. At the same time, the development of the company was steady and persistent. In this regard, it is important to point out that the company started as a small restaurant based on the soup, salad, pasta, fresh fruit and dessert bar concept. Steadily, the restaurant expanded the menu as well as the chain of restaurants emerged nationwide. The new menu included not only steak and seafood but also chicken dishes, BBQ, combination meals and burgers. In the late 20th century, the company has launched an aggressive strategy of the international market expansion, which brought the company a tremendous success and allowed to improve its competitive position in both domestic and international markets. In such a situation, the intention of the company to establish business in India seems to be quite logical because India is a growing economy, which has a great potential. In this regard, it is necessary to take into consideration several factors that contribute to taking a positive decision concerning entering Indian market by Sizzler Australia. First of all, Indian economy has a great potential to grow. Therefore, the company can benefit expanding the chain of its restaurants in India, which may bring considerable growth due to the economic growth in India and the improvement of well-being of the local population. Secondly, the demographic situation in India is also favourable for establishing business in this country. To put it more precisely, the larger part of the population of India are young people, who are economically active and who are ready to change their lifestyle. Therefore, they are likely to become the target customer group of Sizzler and the company just needs to promote its brand and position it properly to attract the attention of the younger generation of Indians and to conduct effective pricing policies because prices should be affordable for mass customers in India. Anyway, the company has the potential to grow and it can establish its business in India but entering Indian market is likely to raise certain barriers Sizzler will have to overcome in the course of its market expansion.
Analysis of factors affecting the company
Marketing is crucial for establishing business in a new country. In this respect, it is important to place emphasis on the fact that marketing in India will be different from marketing in Australia (Gwynn, 2004). What is meant here is the fact that methods and strategies that worked pretty well in Australia will not always work in India because of the different mentality of the local population and specific business environment in India. At this point, Sizzler should take into consideration local specificities and develop effective marketing strategy to establish its business in India successfully. One of the major problems Sizzler can face in India is the division of the local population and the existence of different castes which put people into different social classes and prevent them from the direct interaction and close communication especially in such delicate matters as taking meals. This means that representatives of different castes may not be willing to dine together, whereas the division of Sizzler's restaurants into different areas for different castes is absolutely discriminatory and unacceptable for Australian company. Anyway, the company will have to deal with this problem somehow to meet needs, wants and expectations of customers.
The company structure is also important in regard to the international market expansion and establishing business in India. As the matter of fact, Sizzler has a well-developed chain of restaurants in Australia as well as in other countries, where the company has already established its business. However, Sizzler will start the new business in India, where the company has no facilities, partners, and experience of operations. Therefore, the company will have to build up a brand new chain of restaurants in India that may need substantial financial and human resources and a lot of efforts to succeed.
In such a context, human resources play a particularly important role. In this respect, it is important to place emphasis on the fact that India is absolutely different from Australia (Bourdieu, 1999). The local population has absolutely different culture and mentality compared to Australian one. Therefore, Sizzler is likely to face the problem of cultural and communication gaps while launching its business in India. It proves beyond a doubt that Australian managers and employees will hardly be able to understand needs of Indian customers and meet their expectations. Consequently, the company has to employ local employees as well as managers to develop the chain of restaurants successfully. In fact, local professionals understand local culture, they know local traditions and they can meet needs and wants of local customers. On the other hand, they are not aware of standards, management style and organizational culture of Sizzler. Hence, the company will spend financial resources and time on training local professionals as well as transferring some experienced professionals from other countries to India to establish business successfully and to develop the new chain of restaurants that matches both needs and wants of local customers and marketing goals and organizational culture of Sizzler.
The management of the company is likely to face the problem of cultural and communication gaps, when Australian managers will deal with their Indian colleagues and employees. The problem of communication and cultural gaps may be crucial for management because it may raise unsurpassable barriers on the way to the formation of positive interpersonal relationships within the new chain of restaurants established in India. Moreover, cultural and communication gaps can provoke conflicts within the organization that undermine consistently the effectiveness of the marketing performance of the company. Hence, the management of Sizzler should deal with the elaboration of new effective management styles and approaches which close cultural and communication gap and, thus, prevent the company from poor marketing performance in India.
In addition, it is necessary to take into consideration the impact of competitors on business development in India. At the moment, India is a desirable target market for many multinational companies operating in the restaurant industry (Volti, 2005). In this regard, it is worth mentioning the fact that the major rivals of Sizzler are fast food restaurants. Although they operate in a bit different segment of the market, they offer customers meals at the relatively low price and relatively good quality. Therefore, the company will have to take its own niche in Indian market and overcome the resistance of its competitors.
In the contemporary business environment, company-customer relationships are crucial for the overall success of establishing business in a new market. In this regard, Indian market is not an exception. In fact, company-customer relationships lay the foundation to the business development because, if Sizzler fails to establish positive company-customer relationships, the company is likely to fail in the development of its business in India. In contrast, if the company gains the customer respect and confidence, it can conduct its business successfully and expand its market share consistently. Therefore, the company has to attract customers and offer them products and services they are interested in and promote its brand to attract the attention of local customers.
Government policies and their impact on business
On assessing risk factors that can affect the positive outcome of establishing business in Australia, it is impossible to ignore the role of government and policies conducted by Indian government in relation to foreign investors. In this regard, Indian government is traditionally loyal to foreign investors because foreign direct investments can boost the economic growth of India. On the other hand, India has the problem of corruption that prevents companies entering Indian market from the fair competition and exposes them to the threat of unfair competition and corruption that misbalance the normal market development. As a result, the company can fail, if the local government conducts unfair policies. Nevertheless, today, India needs foreign direct investments badly and the local authorities are unlikely to raise barriers on the way of foreign direct investments, especially when such successful companies as Sizzler attempt to enter Indian market.
Solutions and recommendations to Sizzlers
Taking into consideration risks and threats Sizzler can face in the course of establishing its business in India and strategic marketing goals of the company, it is possible to recommend Sizzler to enter Indian market (Newel, 2001). In this respect, the company has several options, which Sizzler has to choose to enter Indian market successfully and reach its marketing goals. First of all, the company can use its brand to take advantage in Indian market and attract local companies and chains of restaurants to cooperation. In fact, the company can provide its brand for local restaurants, restructure them, conduct the reconstruction of their facilities to create the traditional brand image of Sizzler and allow them working autonomously under the brand of Sizzler sharing their profits with Sizzler. At this point, it is important to keep control over the target restaurants in India because they have to meet standards and norms established by Sizzler. Otherwise, they can undermine the positive brand image and put under a threat the strategy of establishing business in India. In spite of high risks, this option needs minimal costs from the part of Sizzler.
Furthermore, Sizzler can start a close cooperation with a local chain of restaurant sharing expenses and profits equally or proportionally to investments of either party. The partnership with a local company allows Sizzler to enter Indian market fast and get facilities, where it can develop its own brand and restaurants. On the other hand, the partnership with a local company, even though it needs low costs, still implies relatively low return on investments because the company will share its profits with the local chain of restaurants. In addition, such cooperation may raise problems in the close cooperation between Sizzler and the target company because either party may attempt to maximize its profits at the cost of its partner.
However, there is a better alternative Sizzler can use to establish its business in India, although this option will need more financial resources compared to the previous option. As the matter of fact, the company can purchase a chain of restaurants operating in India. At first glance, this step seems to be too expensive because Sizzler will need to acquire the entire company. On the other hand, potential benefits from such a step outweigh its costs. What is meant here is the fact that, when Sizzler purchases the local chain of restaurants, the company will need to conduct the rebranding and to reconstruct the restaurants belonging to the chain. Naturally, such restructure and reconstruction will need substantial financial resources but the company will receive the high return on investments because Sizzler will not share its profits with any other company. In addition, the company will be able to conduct absolutely independent policies and define the business development in India respectively to its interests and needs.
Finally, the company can establish the totally new chain of restaurants but this option is the most expensive one and this option is possible to implement if the company is not limited in resources to invest into establishing business in India. The company will need to purchase the land and construct new facilities and infrastructure for its restaurants. Then, the company will need to recruit and train the personnel. After that, Sizzler will need to conduct the promotional campaign and find local suppliers. And finally, the company can start its business, although the return on investments cannot certainly exceed costs of this option. In other words, in case of choosing this option, the high return on investments is uncertain.
Thus, in conclusion, it is important to place emphasis on the fact that Sizzler can establish its business in India and succeed. At the same time, the company should be aware of risks and threats Sizzler is likely to face in India. In this respect, specificities of the local culture and business traditions are the major threats to establishing business in India by Sizzler. On the other hand, if the company manages to overcome communication and cultural gaps, it can succeed in establishing its business in India. In this respect, it is possible to recommend purchasing an Indian chain of restaurants, which provides Sizzler with well-developed chain, facilities and human resources accustomed to work in India.