Macro Environmental Factors Analysis Of International Franchising In China

The recent growth in international franchising was fueled by both push factors, such as saturation, competition, and diminishing profits in the domestic market, and pull factors, such as the liberalization of the Eastern block countries, and the emergence of some newly industrialized countries in the international market place. With the fast development in China, more and more famous franchising organizations in the world begin to enter Chinese market by formal or informal ways and the competition between the franchising organizations is internationalized. This paper focuses on the macro environmental factors the foreign franchisors confront in China. Following the definition of international franchising, Alon and McKee's normative macro environmental model of international franchising is introduced. Then this paper analyzes Chinese macro environment from four dimensions: economic, demographic, distance and political factors. At the end of the paper, it supplies two alternative entry models for the franchisors from different countries.