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Franchising in China. 1.0 Introduction The catering industry in China is booming. ...
Chen, Ye-Sho Franchising China: She is Ready, Are You? ...
... capital through franchise investment. The 2008 Olympics are also playing
a large role in franchising in China. With so many people ...
... s rapidly growing entrepreneurial class as it appeals to many business people with
enough capital to take on a franchising operation” (Franchising in China). ...
... 21 2.5.5 Considerations for Franchising in China ..... ...
Franchising is clearly making progress in China. ...
... The retail industry in China began to undergo a drastic transformation with all
the new regulations on retailing and franchising in China for global companies. ...
Submitted by jotheweirdo on November 11, 2007
Category: Music and Movies
Words: 8203 | Pages: 33
Views: 317
Popularity Rank: 30,063
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1.0 Introduction
The catering industry in China is booming. In this report, we aim to enable the readers to gain a better understanding of some of the factors that the authors believe to have significantly contributed to the success of fast food catering industry in China.
The report will first look into China¡¦s socioeconomic and legal environment, and explain how each of the factors within the two categories have procured the success of the catering industry. Two case studies will then be introduced to illustrate how a domestic brand and an international brand have achieved success in the Chinese market.
2.0 Socioeconomic Environment
It has been long recognized that food is vital to human survival. When the household income is low, expenditure on food will, without doubt, take up a significant portion of a family¡¦s income. As income rises and people are better fed, a family¡¦s spending focus will slowly shift from food to other areas.
In order to determine the poverty or surplus level of a population, Engel¡¦s Law was developed to address the above mentioned phenomenon, with Engel coefficient commonly being used to measure the living standard of a population from a given country or region.
2.1 Engel¡¦s Law
Engel's Law is the observed phenomenon that when a family¡¦s income increases, the proportion of money they spend on food decreases. Engel had discovered, based on surveys of families' budgets and expenditure patterns, that the income elasticity of demand for food was relatively low. With rising incomes, the share of expenditures for food declines. The resulting shift in expenditures affects demand patterns and hence the employment structures .
However, Engel was not suggesting that the consumption of food product remains unchanged as income increase. Instead, he is stating that the proportion of income spent on food falls, even if...
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