For this assignment, I am writing a case study on the global issues the Nobu brand encounters globally. Listed below I provided the ‘prompt’ of my paper and what I am looking to be analyzed and discussed. I have provided the draft of my report so more information can be added and not duplicated in what I already have. The inclusion of charts, graphs and figures are welcomed. I would like to have the paper formatted and structured the way it lists in the requirements towards the bottom. Additional sources and APA citations are needed as well.
“Discuss how the Nobu brand expanded from one restaurant in the US to an international brand including hotels globally. I wanted to analyze and discuss the benefits as well as difficulties Nobu encounters in trying to keep with the standards of all of his brands while also having to deal with rules/regulations of the countries he decides to open up his properties. “
The case study must focus on a specific topic, highlight the relevant literature that exists on that topic, and examine the ways in which the hospitality and tourism industry prepares for and responds to these situations. The goal is to identify a hospitality or tourism organization that demonstrates best practices in your area of interest. Case studies may be compiled from field research, published sources and/or generalized experience. Case studies do not have to follow a specific structure.
However, each case study is expected to include sections related to the following topics:
a). abstract
b). key words
c). introduction to the topic
d). a background of the subject organization and of the topic;
e). an analysis of the dilemma;
f). a section explaining the questions and dilemmas of the case study;
g). related bibliography and additional reading.
The case studies must be of maximum 5,000 words excluding figures, tables, annexes and bibliography. The case studies will be evaluated against three criteria: content, theoretical underpinning, and presentation. Case studies must adhere to and follow the submission guidelines of case study writing.
All case studies must be accompanied by a short abstract of not more than 100 words and a list of no more than six key words, which define the subject matter.
NOBU
HOSPITALITY LLC
Nobu holds the position of being one of the most luxurious hoteling brands all around the globe. People who own Nobu, three people to be exact, are Robert De Niro, Meir Teper and Chef Nobu. Nobu is recognized for its exquisite cuisines and a large celebrity following which influences other people to engage in the experience this luxury brand offers.
Nobu runs its operations in five continents and blossoms in various world capitals. The brand image is based on quality service, customer satisfaction, and amazing hospitality that provides people all around the world with opportunities to indulge in restaurant management for the purpose of investing in new projects all around the globe. (Hospitality Net)
Abstract:
This paper is going to talk about the general and more in-depth information about Nobu brand and how it expanded globally. You will also learn about the various phases the restaurant went through in its process of expanding while also being consistent with its quality and standards as well as following the law, rules and regulations of all the countries it is operating its function in.
Statement:
The purpose of this paper is to answer questions like how a reputable brand like Nobu deals with various problems while expanding and what benefits and difficulties it faces while complying with multiple kinds of laws and regulations according to each country it operates its functions in. The paper will also discuss what each of these countries brings on the table as far as drawbacks and facilities are concerned.
Background:
The issues that are going to be discussed regarding my case study include the global expansion of Nobu brand keeping in mind its reputation of being a luxury brand that not everyone can afford especially when it comes to underdeveloped or developing countries.
Another agenda that is to be discussed is what benefits were offered to Nobu that made the expansion and operating process easy and enjoyable while also being profitable for Nobu and what were the difficulties Nobu faced that made it hard for it to sustain its profit levels and maintain its standards.
Hospitality Industry:
The category of hospitality industry is like a vast sea of subcategories including food, tourism, hoteling, event planning, amusement opportunities and other service based industries. Nobu first joined the hospitality industry in 1994 in New York. (CNN business).
In the words of Robert De Niro, from the first restaurant they ever opened, “it just grew and grew”. De Niro takes pride in the fact that when a customer walks in into the restaurant, he trusts the quality of the food and the service provided in the restaurant. Nobu and De Niro plan on opening more franchises every few years just like they planned on opening five new properties in 2018. (Travelmarket, 2017)
Global Growth:
Every business aims on expanding and after a smash hit success the business puts the plan in action. Nobu gained popularity and success in a short span of time for various reasons. The involvement and ownership by an Oscar winning actor was one of the biggest reasons behind the success because when a celebrity is associated with a brand, or vice versa, word spreads really fast and people are eager to try what their role model has created for them.
Another reason was the experts working at Nobu. All the chefs were skilled and knew exactly what they were doing, the aesthetics of the restaurant were appealing, the taste of the cuisine was exquisite and the service offered was also remarkable. Nobu started as a restaurant business and joined the hoteling industry soon after. (CNN business)
Expansion:
Nobu has expanded its operations all around the globe in various countries. Following is a list of all the countries
USA
Europe
Middle East
Africa
Mexico
Caribbean
Asia Pacific
South America (Nobu)
USA:
In USA, the restaurants exist in
Dallas
,
New York Downtown
,
New York Fifty Seven
,
Honolulu
,
Houston
,
Lana’i
,
Las Vegas Caesars, Palace
,
Las Vegas At Bally’s
,
Los Angeles
,
Malibu
,
Miami
,
Newport Beach
,
Palo Alto
,
San Diego
,
Scottsdale
,
Washington D.C.
, and
Chicago
Europe:
In Europe, the Nobu restaurants are in
Barcelona
,
Budapest
,
Ibiza Bay
,
London Berkeley St
,
London Old Park Lane
,
London Shoreditch
,
Marbella
,
Milan
,
Monte Carlo
,
Montenegro
,
Moscow
as well as
Moscow Crocus City
.
Middle East and Africa:
Nobu has three locations in Middle East and Africa in Cape Town, Doha and Dubai
Mexico and Caribbean:
Four locations including Bahamas, Mexico city, Mexico city Polanco and Los Cabos.
Asia Pacific:
Hong Kong, Kuala Lumpur, Manila, Melbourne, Perth and Tokyo
South America:
São Paulo Jardins, Nobu Angra Dos Reis and Pop Up.
BENEFITS:
Fortunate Regulations:
When Nobu opens up a restaurant in a new country, depending on the law and order of that country, it utilizes the favorable regulations if it is fortunate enough to encounter such a situation. Some countries have a lenient tax structure that helps Nobu save money which he can invest in other aspects of his brand.
For example the taxes and fees needed to start a business in China is less than it is in the United States, same is the case with other countries. Paying lower fees and taxes can improve the return levels of Nobu. (CHRON)
Brand Image:
One very big advantage that Nobu has while opening a new branch in the same country or a different country is the positive brand image that it holds. People all over the world know about Nobu, mainly because of the fact that it is co-owned by Robert De Niro. Nobu has a very strong reputation for serving the best food and providing the best quality and this is why when it opens in a new country, it does not have to worry about people approaching the restaurant and vice versa. (PREMIERLINE, 2015)
Cost Saving:
Because of the positive brand image, Nobu does not need to spend a whole lot of money on advertising and promotional activities. People are already aware of the next opening through the website, interviews, and social media and so they approach Nobu themselves. Most of the time, people are already waiting for the opening before Nobu even decides to bring its operations to a certain part of the world.
Loyal Customers:
Not everybody can afford to book a room at Nobu or enjoy a meal in the said restaurant because of the high price point but those who can afford it, become the most loyal customers because of the
luxuries and unique services offered by Nobu Hotels.
These loyal customers become the source of unasked appreciation in the form of “word of mouth”. When people all over the world rave about the food, services, innovatory practices and high customer satisfaction levels, more people are bound to come in to try Nobu and fall in love with it.
More Investors:
Goodwill and excellent reputation brings in more investors to most industries and businesses. Same is the case with Nobu Hotels. Because of its high profit levels, big investors globally are inclined towards investing more in Nobu because they know that the chances of loss are almost non-existent and that they are only going to make more and more profit. (UK ESSAYS)
DISADVANTAGES:
Cultural Differences:
Cultural barriers can be one of the potential problems while franchising in a new country. People are reluctant to change especially when it comes to something as basic and necessary as food and accommodation. Something that is popular in the United States might not be popular in Mexico. Similarly, just because Americans like light food with close no to spices, does not mean it will be appreciated in the same way in Spain too. Even a brand as big as Nobu, might have trouble predicting the culture of a new country and getting it right each time. It needs a lot of research and appropriately calculated risk taking to open a new franchise in a country which has a very different culture. (CHRON)
Financial Risk:
Risk is a constant factor in business, old and new alike, but when a brand franchises on international land, the calculations of risk change. The differences in currencies and exchange process might make the business less profitable. Nobu faces the same drawback when opening a new restaurant. Shipping charges, taxes, and tariffs can add up to the cost of production and lower the rate of return for Nobu Hotels. (Siebert, 2019)
Compliance Challenges:
The business laws, orders, and policies vary from continent to continent and even from country to country. Nobu faces this challenge too. The ingredients that are allowed to be consumed from a religious point of view in one country might be forbidden in another country. The policies of a country that allow a restaurant certain ways of running a business might vary from policies of a different country. Employee rights and human resources of different countries also vary.
For example, in one country employees may be paid in hourly wages while in another country, they might be getting paid monthly. All of these changes create the need for a new legal team and compliance terms for Nobu. (CHRON)
Franchise Fees:
Some countries demand a huge chunk of money from new franchises. Sometimes when Nobu opens up a franchise in a country, it takes years to reach the breakeven point which results in low profit levels. (PREMIERLINE, 2015)
Competitors:
Already existing hotel and restaurant brands pose a threat for Nobu hotels when starting a new franchise. This goes for both domestic and international branches. It is especially hard to compete with a local existing brand in a country because people are familiar with their own hotels and restaurants more so than other restaurants. (AmericasBestFranchises, 2015)
Growth Risk:
It is a hypothetical situation that if and when Nobu fails to run its operations smoothly in a new country and if and when this news sees the light of the day, customers will assume that Nobu has lost its touch and is now going towards loss. This will stop new investors from coming in and will also result in the loss of loyal customers. Fortunately, it has not happened yet but it cannot be said that it will never happen. (UK ESSAYS)
Limitations:
Opening a franchise includes complying with the laws enforced by the government. This can limit Nobu Hotels from exploring their creative side or adding their own personal touch. It can also limit the amount of SBUs (Strategic Business Units) that it wants to explore and invest in. (Brookins)
CULTURAL DIFFERENCES:
Opening a business in a new country can bring a lot of cultural differences and these differences can become hurdles in the way of smooth running of business. Nobu also faced these issues. Since Nobu is a restaurant and hotel, most of these differences showed themselves in the form of food. Following are the countries that Nobu Hotels opened in and how the food differed from the United States.
CHINA:
Chinese food is served in sharing which means more than one person can eat from the same platter whereas American food is served in single servings. American food has more sugar and therefore is sweeter than Chinese food. Also, Chinese cuisine does not have a lot of dessert recipes and so the concept of baking and sweet dishes is not as developed and liked as it is in America. American people like lots of meat and steaks and Chinese people have a better liking for vegetables. (Quora, 2013)
DUBAI:
Dubai is an Islamic country and so the biggest difference is that Pork and dishes made from pork
are forbidden in Dubai, so it alcohol whereas these things are allowed and very common in America. Also, Dubai has more traditional dishes that they take pride in and enjoy (example: lamb & rice) whereas America does not have any traditional dishes per se. (Advance Custom Writing)
RUSSIA:
Russia is a cold country and so people really enjoy warm foods mostly. The two most common foods / beverages consumed in Russia are soups and different variations of hot tea. The most consumed foods / beverages in America are fast food, steaks and soda pops. (Charlie Baggs)
EUROPE:
The use of additives and preservatives in food is strictly prohibited in Europe whereas there is no strict prohibition in America which makes it different for Nobu since it has to take good care and consideration in Europe.
The countries and their differences discussed above tells us what precautions Nobu has to take while opening restaurants in any other country than America.
AmericasBestFranchises. (2015, August 24). Retrieved february 9, 2020, from AmericasBestFranchises: https://americasbestfranchises.com/blog/franchising-competitors/
PREMIERLINE. (2015, JANUARY 30). Retrieved FEBRUARY 9, 2020, from PREMIERLINE: https://www.premierline.co.uk/knowledge-centre/what-are-the-advantages-and-disadvantages-for-the-franchisee.html
Travelmarket. (2017, DECEMBER 27). Retrieved FEBRUARY 9, 2020, from Travelmarket: https://www.travelmarketreport.com/articles/Nobu-Hospitality-to-Open-Five-New-Properties-in-2018
Brookins, M. (n.d.). CHRON. Retrieved february 9, 2020, from CHRON: https://smallbusiness.chron.com/disadvantages-franchises-186.html
CHRON. (n.d.). Retrieved FEBRUARY 9, 2020, from CHRON: https://smallbusiness.chron.com/advantages-disadvantages-international-franchises-22488.html
CNN business. (n.d.). Retrieved February 9, 2020, from CNN business: https://edition.cnn.com/2018/09/28/business/robert-de-niro-nobu/index.html
Hospitality Net. (n.d.). Retrieved FEBRUARY 9, 2020, from Hospitality Net: https://www.hospitalitynet.org/organization/17016422/nobu.html
Nobu. (n.d.). Retrieved February 9, 2020, from Nobu: https://noburestaurants.com/
Siebert, M. (2019, JANUARY 9). Entrepreneur . Retrieved FEBRUARY 9, 2020, from Entrepreneur: https://www.entrepreneur.com/article/323371
UK ESSAYS. (n.d.). Retrieved FEBRUARY 9, 2020, from UK ESSAYS: https://www.ukessays.com/essays/business/advantages-and-disadvantages-of-domestic-and-international-franchising-business-essay.php