Ownership Strategies - Case Study Example

Ownership Strategies Kazakhstan is located in Central Asia and it is a multi ethnic society composed of Kazakh, Ukrainian, Russian, Uzbek and German populations. Most of the people in Kazakhstan are Muslims with a substantial portion of the society belonging to Russian orthodox. The social cultural, legal, economic and political environment within Kazakhstan is thus very significant t business operations (Teal, Toxanova and Martin Izzo, 2011). In this regard, international companies which plan to expand their business to Kazakhstan should be aware of the various factors which would affect business success.

Chicken Delight’s corporate strategy of expanding its chain of restaurants from Australia to Kazakhstan means that the business environment must be analyzed in order to implement the most appropriate business ownership strategy in this market. Company acquisition is one of the most effective business ownership strategies, which would be used by companies that want to expand their business to the international environment (Tanganelli and Schaan, 2011). In this regard, Chicken Delight would acquire local hospitality businesses in Kazakhstan as part of its growth strategy into the global market.

Acquisition of local food companies is very effective for Chicken Delight’s business expansion because of the understanding that these companies have for the Kazakhstan culture and its implication to the business environment. The Kazakhstan culture highly values relationships and communication (Kim, 2007). Nonetheless business activities are usually conducted in very formal manner. Kazakhstan considers eating as a social event that involves consumption of food by use of bare hands (Erdener, 2010).

These cultural factors have the potential of affecting the success of Chicken Delight’s restaurant in Kazakhstan market. With this consideration, acquisition qualifies and presents the viable business ownership strategy for Chicken Delight. This is further substantiated with availability of local employees who tend to understand the local culture. Merging with other local businesses and particularly food shops is another viable strategy that can work well to facilitate expansion goals of Chicken Delight in Kazakhstan (Tanganelli and Schaan, 2011).

The effectiveness of merger in the Kazakhstan market is further stimulated by the existence of hierarchy in country’s business environment. Additionally, conservative dressing is valued by the Kazakhs (Kim, 2007). It is in the respect of the local values that the company will be able to achieve successful negotiations for the formation of alliances. Licensing is another form of business ownership, which the company would employ within the Kazakhstan market (Erdener, 2010). This means that Chicken Delight will be mandated to adhere to the legal framework in licensing its business in Kazakhstan.

The Kazakh business environment is liberalized which has motivated international investments to start licensed businesses in this market (Kaiser and Pulsipher, 2006). Wholly owned subsidiaries would be one of the most appropriate business ownership strategy that Chicken Delight can employ in it corporate strategy of entering the Kazakhstan market. Effectiveness of this strategy attributes to fact that it enables businesses to exercise total control in their international subsidiaries (Kamal, 2011).

It is in the light of this illustration that it is recommended for Chicken Delight to apply this strategy in order to have full control of its local subsidiaries in Kazakhstan. Furthermore, Chicken Delight would form partnerships with local businesses as one of the possible strategies of business ownership within the Kazakh market (Tanganelli and Schaan, 2011). The formation of partnerships in this market would include liaison with food retailers, suppliers and distributors. Such partnerships will enable the company to achieve success in the Kazakh food market and achieve a higher level of competitiveness.

References Erdener, C. (2010). Business ethical decisions in Kazakhstan. The International Business and Economics Research Journal, 9(10), 123-130 Feurer, R., Chaharbaghi, K., and Distel, M. (1995). Dynamic strategy ownership. Management Decision, 33(4), 12 Kaiser, M. J., and Pulsipher, A. G. (2006). Business environment still seen as risky in Kazakhstan. Oil and Gas Journal, 104(27), 32-38 Kamal, M. (2011). Entry Mode and Subsidiary Performance in Emerging Economies. Mustang Journal of Business and Ethics, 20-29 Kim, C. L. (2007).

Father leadership and small business management: The Kazakhstan perspective. The Journal of Management Development, 26(8), 723-736 Tanganelli, D., and Schaan, J. (2011). Ownership strategy in SMEs international joint ventures. Journal of Small Business and Entrepreneurship, 24(4), 551-566,603-604 Teal, E. J., Toxanova, A. N., and Martin Izzo, G. G. (2011). Entrepreneurial development in Kazakhstan: A review and update. Journal of International Business and Cultural Studies, 51-10