International Europe

When there is an entrepreneurial opportunity that exists in another country, it is important to understand the culture and industries that are prominent in the area. There are factors that will influence an entrepreneurs decision in determining the best and most potentially profitable business opportunity. The STEP factors assist in helping to make this process and decision smoother. Looking at the culture through the STEP process and then applying the same thoughts to the industries will give a entrepreneur a better understanding of companies and people.

Hungary

Fast Food Industry

Social

The concept of franchising is relatively new to Hungary and many of the market segments are underdeveloped. The franchises that are most frequently found are in the fast food sector. Fast food is being socially accepted throughout the world and will only continue to grow as demand for convenience goods continues to rise. The idea of the America culture is present in many international countries and a Big Mac, fries and a Coke clearly define the typical America cuisine.

Technology

The efficiency of the many fast-food restaurants is what has laid the path for success. The ability to have faster computers, credit/debit card machines, cordless microphones are technologies that have been implemented to make this industry flourish and grow. Technology continues to be persistent in Hungary and many other countries worldwide. With franchising being a new idea in Hungary, technology will only have to growth along with franchises.

Economic

Hungary has a strong economy and man analysts believe franchises will increase up to 10-12 percent in the next 4-5 years. There is a lack of personal capital and access to credit. There are banks that are beginning to offer packages with a relatively high interest rate, although lower than the past. In order for a franchiser to be success there will need to be an adjustment of the typical American model.

Political

In is important for new franchises to understand the laws and regulations around beginning and owning a business in Hungary or any other country. Knowing the tax and liability laws will also be beneficial when starting a new franchise. The European Union issued regulation EU 4087/88 regarding franchising, which provides a universal code for the 15 member states. It main goal is associated with transfer pricing, non-competition clauses, price fixing and exclusive dealing.

McDonald’s

As the most successful franchiser in Hungary, McDonald’s has modified their model to fit the Hungarian marketplace. They have provided financing and obtained foreign master franchisees. It is the most dominant fast-food sector with 70 restaurants, comparable to Burger King (8), Wendy’s (2), Pizza Hut (14). The opportunity that McDonald’s maximized upon was to apply multiple franchising techniques. They have determined who their target market is: well-educated, highly motivated Hungarians who have a desire and presence toward a small scale entrepreneurship but lack the financing. According to the Hungarian Franchise Association, the fast food market is close to saturation but the HFA sees additional room for franchisers in the service sector.

Netherlands

Electronic Industry

Social

The total Netherlands market for Information Technology, which consists of hardware, software and services, grew approximately 10 percent to USD 12 billion in 1999. The computer market makes up about 50 percent of this market and that sector grew almost five percent. Probably the fastest growing segment in the hardware market is the PC. About one third of PCs were sold to the consumer sector. In 1999 1.8 million PCs were sold which was up 13 percent from the previous year. The Netherlands is a key center