Franchise Business Development Model: Theoretical Considerations

Franchising is not a popular business development form in Lithuania. Only 0.02% of all Lithuanian companies use franchising for business development, while in most of the developed countries franchise is recognized as a convenient business expansion form. So, what factors determine such differences in the use of franchising? Analysis of related literature showed, that mainly researchers analyse some aspects of franchising, however there is no systematized analysis which covers all the main franchise development elements. Therefore, the aim of this article is to systematize franchise business development phases, main elements and factors, influencing this process and to propose a theoretical franchise system development model. Thus, theoretical considerations about the main phases and elements of franchise system development as well as advantages and disadvantages of the system are analysed in the article. These theoretical considerations are generalized in theoretical franchise system development model, which shows, that development of franchise business consists of particular steps, starting from favourable conditions for the system to emerge; intention and ability of franchisor to form franchise based on his business; the establishment and initial development of franchise system; and its further functioning. The article does not test the model and even does not discuss the operationalization of it. Operationalization of the model as well as empirical evidence is presented by the authors in the forthcoming articles

Verslo ryšiai ir įmonės internacionalizacija : Lietuvos tekstilės ir aprangos sektoriaus įmonių atvejis

Pagrindinis šio straipsnio tikslas analizuoti Lietuvos tekstilės ir aprangos sektoriaus įmonių verslo ryšių intensyvumą ir patikrinti, kaip turimi ryšiai įtakoja įmonės internacionalizaciją. Šis straipsnis yra unikalus tuo, kad papildo verslo ryšių literatūrą socialinės distancijos aspektu. Empiriniai duomenys buvo renkami anketinės apklausos pagalba (atsakymų lygis yra 32%, t.y. atsakė 38 įmonės iš 119). Duomenų analizė rodo, kad Lietuvos tekstilės įmonės pasižymi itin žemu internacionalizacijos lygiu; žemu socialinės distancijos su verslo partneriais lygiu; supratimu apie artimų ryšių su verslo partneriais svarbą. Tyrimo rezultatai rodo, kad artimų ryšių su verslo partneriais suvokimas neužtikrina aukšto įmonės internacionalizacijos lygio, nes daug svarbiau yra pats ryšių su verslo partneriais intensyvumas ir socialinė distancija tarp verslo partnerių, kurie ir nulemia įmonės gebėjimą panaudoti verslo partnerius įmonės plėtrai. Reikšminiai žodžiai: Aprangos sektoriaus įmonės; Ryšiai su verslo partneriais; Socialinė distancija; Tekstilės ir aprangos sektoriaus įmonės; Tekstilės įmonės; Įmonės internacionalizacija; Apparel companies; Company internationalisation; Lithuania; Relationships with business partners; Social distance; Textile and apparel companies; Textile companiesThe main aim of this paper is to analyze the intensity of relationships of a Lithuanian textile and apparel company with its business partners and to test how the relationships affect the company’s internationalisation. The social distance aspect is introduced in the context of the business partnership literature. Empirical data were collected via a questionnaire survey (response rate is 32% (38 of 119 companies)). Data analysis shows that Lithuanian textile and apparel companies can be characterized as having a very low degree of internationalisation despite their managers having a good understanding of the importance of business partnerships and a low social distance with business partners. Thus, the study shows that an understanding of importance of close relationships with business partners does not result in a higher degree of internationalisation as there are additional factors such as social distance and intensity of relationships (for example "passive relationships") which affect internationalisations process as well

Evaluation of internalisation perspectives of Lithuanian textile and clothing industry

Due to the long period of repression, Lithuanian textile and apparel makers fall behind the global events where the most important role belongs to globalisation. Taking into account these circumstances the author of this article analyses the possibilities of Lithuanian textile and apparel industry to work in the global economy. The author examines the essence of internationalisation and development of this process in the global textile and apparel industry. Also the main methods of internationalisation and Meta trends ("Triad", intra- and interblock trade, direct investment, dynamic adjustments) in the textile and apparel industry are analysed. Although the British and European textiles companies have a lengthy history of international involvement in textiles production, the first really major wave of such activity occurred in the early 1960s and was led by the Japanese textiles firms and the general trading companies (the sogo shosha). Direct investment, export, licensing, and subcontracting is the internationalisation methods mostly used by the firms of the textile and apparel industries. After the examination of meta trends the author comes to the conclusion that intra-block trade becomes more complex, although there is some liberalisation of trade. Additionally, author makes a conclusion that the textile and apparel industries of the industrial countries are varnishing. Finally, the author analyses possibilities of Lithuanian textile and apparel industry to internationalise its activities and makes the conclusion that the global environment is well disposed towards the Lithuanian textile and apparel industry, therefore the perspectives of this industry depends on the representatives of the industry

What is delaying the internationalization of small and medium-sized firms in central nad Eastern Europe?

Following the enlargement of the European Union (EU) and abolition of trade barriers, new opportunities have opened up for enterprises of Central and Eastern Europe (CEE) to internationalise their business. It is believed that small companies are much more flexible and can adapt more quickly to a changed environment, and should use such advantages for internationalising their business. The article analyses cases of internationalising business of Lithuanian, Polish, Czech, Hungarian and Estonian small and medium-sized enterprises (SMEs) and hindrances to internationalisation pointed out by enterprises themselves. The research findings show that enterprises of the said countries are not yet fully prepared to respond to competitive challenges brought about by the expanded and more open European Union and are not ready to make use of all the opportunities. Despite the fact that many enterprises underlined cooperation with foreign partners and knowledge of foreign markets as their key advantage, as well as noted on good foreign language skills and internal capacities of companies, there are still a few factors beyond their control, such as intense competition in foreign markets and bureaucratic obstacles hindering SMEs of this region to avail of all the opportunities. As a result, for countries in transitional stage EU enlargement may create more problems rather than open more opportunities that have been so eagerly awaited for

Pasikeitusio prekybos režimo poveikis Lietuvos tekstilės ir siuvimo pramonei

Two recent events had a tangible impact on Lithuanian textile and apparel industry. First of them was Lithuanian EU membership and entrance to the single market, the second one being the final abolition of quantitative restrictions in the sector from the beginning of 2005. The outcomes of the first event are less significant as tariffs in trade with the EU were removed in line with the bilateral free trade agreement concluded long before Lithuanian EU membership. The EU membership resulted in more changes in the trade regime with the third countries. Before membership Lithuania applied only a few restrictions while the EU common trade policy envisaged the application of both quantitative restrictions and tariffs. A more tangible impact on Lithuanian textile and apparel industry had the abolition of quotas which affected to a less extent Lithuanian market and 10 a larger extent the EU market where 90% of Lithuanian sector exports are supplied.The purpose of the article was to explore the situation in the sector after these two major events, to identify the problems and 10 disclose the prospects for the development of the sector in the light of new challenges and to look for the possibilities to increase and diversify the sector’s exports.Lithuania is one of the EU countries most specialized in the textile and apparel sector. In 2004, the sector produced 13.8% of manufacturing value added and exported 11.6% of the total Lithuanian exports. 63% of the sector’s exports are apparel exports. 80% of the sector’s output is assigned for export.The abolition of quantitative restrictions and application of low tariffs for textile and apparel products for imports from third countries have caused severe problems in competition with imports from China and other countries of cheap labour. The textile subsector was growing steadily until 2003, however, since January 2005, when quotas were abolished, textile outputs are shrinking. This is a result of the booming import of apparel from China and other developing countries. These imports reduced the production of these products in the EU and resulted in a reduction of fabric imports from Lithuania. The apparel subsector reached its peak in January 2004. Since then this subsector. in which more than half volume comprise items for which quotas were removed. faces a very severe competition from China, India, Turkey and other countries. Statistics revealed that when production in the sector is decreasing the consumption is increasing. In 2005. in comparison with 2000, sales of textile, apparel and leather products increased by 174.7% (10.3% in the EU).Evaluating the current situation in the sector, authors draw attention to the Following weaknesses of the sector: prevalence of low value added activities, especially in the apparel subsector; diminishing of competitive advantages as a result of labour becoming more expensive and a standstill in productivity, inadequate investments in new technologies, shortage of management and marketing competence, lack of cooperation between textile and apparel companies. missing government support to the sector.Authors believe that the sector has also a number of strengths which allow it to remain competitive at least in the near future. Among them, the modernization of technologies in most advanced companies. the geographical proximity of European markets, a good labour and product quality should be mentioned.Authors believe that new opportunities for the sector would be opened by innovations in new technologies. materials and products, an enhancement in labour skills and competencies. a faster reaction to changes in needs and demand, a shift from mass production of simple products to a larger variety and higher value added products with big design content, larger application of local designers’ skills, development of technical textile and non-woven fabrics, a transfer of labourintensive cycles of production to countries with cheaper labour like Ukraine and Belarus, better cooperation between producers. wholesalers and retailers.Lithuanian textile and apparel industry should penetrate new markets. For the moment, 90% of the sector products are exported to the EU market. Such dependence on the market makes Lithuanian export very vulnerable, and therefore there is a need t9 diversify markets and to look for new export destinations. Success in these markets depends nol only on company actions but also on the EU attempts to increase access to these markets. Most of these markets are still greatly protective. In bilateral and multilateral negotiations the European Commission should seek to reduce high tariffs in some developing countries and should require removal of all non-tariff barriers.Straipsnyje nagrinėjama, kokią įtaką tradiciškai svarbiam Lietuvos tekstilės ir siuvimo sektoriui turėjo narystė Europos Sąjungoje (ES) ir tekstilės gaminių importo liberalizavimas nuo 2005 m. sausio 1 dienos. Siekiant objektyviai įvertinti šių pokyčių poveikį, remiantis Eurostato duomenimis analizuojami Lietuvos ir Europos Sąjungos tekstilės ir siuvimo gaminių importo srautai pagal tekstilės gaminių kategorijas ir šalis atsižvelgiant į prekių kiekį ir jų vertę 2004 ir 2005 metais. Straipsnio tikslas - išnagrinėti susiklosčiusią padėti Lietuvos tekstilės ir siuvimo sektoriuje po kvotų panaikinimo, įvertinti šio sektoriaus gamybos ir eksporto plėtros galimybes. Tai pirmasis straipsnis mokslinėje periodinėje literatūroje, kuriame įvertinami kvotų panaikinimo padariniai Lietuvos prekybai tekstilės ir aprangos gaminiais