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Analysis of franchisors' expansion strategies and competition

Author

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  • Kun-Huang Huarng
  • Tiffany Hui-Kuang Yu

Abstract

Franchising provides a channel for small businesses to grow successfully into nationwide or even worldwide chains. Franchising is considered to be common among chain stores, of which the convenience store is a typical example. This study aims to examine the expansion strategy of each individual convenience store franchisor and the competition to expand among the franchisors. Taiwan is considered to have the highest convenience store density in the world. This study performs empirical analyses of four major convenience store franchisors in Taiwan, namely, 7-Eleven, Family Mart, Hi-Life, and OK. The evidence shows that the franchisors tend to be slow to expand when facing a highly dense competitive environment. There exists a strong first-mover advantage in convenience store franchising. The first mover (7-Eleven) has played a dominating role throughout the years. As a result, the franchisors' outlet shares have remained relatively stable.

Suggested Citation

  • Kun-Huang Huarng & Tiffany Hui-Kuang Yu, 2014. "Analysis of franchisors' expansion strategies and competition," The Service Industries Journal, Taylor & Francis Journals, vol. 34(9-10), pages 856-866, July.
    • Handle: RePEc:taf:servic:v:34:y:2014:i:9-10:p:856-866
    DOI: 10.1080/02642069.2014.905918
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    References listed on IDEAS

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    Cited by:

    1. Chang, Hung-Hao & Meyerhoefer, Chad D., 2019. "Inter-brand competition in the convenience store industry, store density and healthcare utilization," Journal of Health Economics, Elsevier, vol. 65(C), pages 117-132.
    2. Jaeyoung Kang, 2014. "Roles of Board of Directors in Organizational Ambidexterity," Journal of Management and Strategy, Journal of Management and Strategy, Sciedu Press, vol. 5(4), pages 99-109, November.

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