Recommendation
Decision matrix has been used as the criteria to reach at the given recommendation which can be seen in (Appendix 2).After evaluating the key strengths and opportunities of the company, and the alternative presented above; it is recommended that the company should opt for franchising model as it will help the company to increase its market presence rapidly without incurring any substantial investments. Franchising will allow the company to market its product at various platforms both locally and globally due to the wider range of networks. Additionally franchising will minimize the risk associated with the growth and will allow the company to focus on the core areas while generating high financial returns.
Tactical plan
In order to execute the recommendation; the company will be required to carry out the following actions, in order to successfully implement the plan:
- In order to implement the franchising model; the company will have to restructure its current model that is more based on direct selling.
- Afterwards the company will have to state all the legal terms andnecessary disclosure associated with the franchising, before taking any step further.
- The upfront cost to change the model of the company from direct selling to franchising will require an initial investment of $75000.
- The company will have an obligation to define all the rights that will be granted to the franchisors, and the rights that will be reserved with franchisors. The ways through which the franchisor can exercise control, royalty payments and the authorization of suppliers.
- After carrying out the above steps, the company will have to screen out the potential franchisees, as it is essential to consider the personalities of the business owners before entering into any kind of agreement, as they are going to be representing the brand.
- Once the franchisee will be selected; the company will have to carry out the required registration and authorization of franchising documents earlier to selling in the state or from the state.(DeLuca, 2011)
By doing so, the company will be able to gain a competitive edge in the market over its competitors and will be able to sustain its position in the long run by allowing itself to expand both internationally and domestically, which will further help itin the generation of high returns.
Appendix 1
| Company | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| Natura | 13.6 | 14.2 | 14.9 | 13.8 | 13.2 | 12.4 | 11.4 | 11.1 |
| Avon | 8.8 | 9 | 8.8 | 7.8 | 7.2 | 6.4 | 5.8 | 5.7 |
| Boticario | 6.5 | 6.7 | 6.9 | 7.8 | 8.8 | 9.2 | 10 | 10.9 |
Appendix 2
| Factors |
Alternative 1 |
Alternative 2 |
| Market presence |
7 |
9 |
| Growth |
7 |
8 |
| Increased sales |
6 |
8 |
| Risk |
4 |
7 |
| Cost |
4 |
6 |
| Total |
28 |
38 |
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