Using her beloved grandmother's recipe for fruit-filled empanadas, Marianna opens a drive-up kiosk specializing in these sweet treats. The concept is profitable and gains a lot of media attention. Marianna wants to open additional locations, but she doesn't have a lot of start-up capital. Which consolidation strategy for fragmented industries could she utilize?

Question

Business

Victor Lam

27 May, 00:25

Using her beloved grandmother's recipe for fruit-filled empanadas, Marianna opens a drive-up kiosk specializing in these sweet treats. The concept is profitable and gains a lot of media attention. Marianna wants to open additional locations, but she doesn't have a lot of start-up capital. Which consolidation strategy for fragmented industries could she utilize?

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Answers (1)

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Rolando Huffman · Answer 1

Franchising

Explanation:

Since Marianna wants to open additional locations, but she doesn't have a lot of start-up capital, the consolidation strategy for fragmented industries that she could utilize is franchising

Franchising is a business expansion model and marketing concept which can be adopted by an organization that does not have to put down additional capital for expansion.

The expanding firm (a franchisor) only needs to license its know-how, procedures, intellectual property, and the use of its business model, brand, and rights to sell its branded products and services to a franchisee.

The franchisee is the party to bring the capital for the expansion.

Much explains why most restaurants use this same strategy, e. g. KFC, Subway and McDonald's;