Technological factors

1. Infrastructure and location

Infrastructure in Russia is generally underdeveloped, however, target city St. Petersburg has strategic location on the Baltic Sea, and thus it is closer to Europe and has access to marine transportation. The transportation system and road infrastructure of Saint-Petersburg is developing rapidly with introduction of high speed railway connection with Moscow and Helsinki and plans for building the motorway connection between Saint-Petersburg and Moscow.

Other considerations

In order to further analyze the attractiveness of the market such factors were assessed:

• Product fit (relatively high)

• Market potential (high)

• Competitive intensity (relatively low)

• Business friendliness (average)

Marketing Mix

The following marketing mix was devised in order to enter the market:

Product Strategy 1/3: Minor menu-adaptations 7 bases and 8 sauces unchanged 14 favorites: 3 regional adaptations Taste and preferences 784 possible combinations Packaging: Wok boxes with logo	Price Standardized price level Base + Favorite – Sauce free 250RUB (eqv. 6€) - 335RUB (eqv. 8€)
Promotion Location and boxes Frequent buyer flyers Illustrative billboards Sales event promotion – 1+1free	Place Close to universities, business centers, transit points and party zones Preferably on street corner Start with two shops

International offer from Wok to Walk Franchise bv

We decided to export furniture from the head company Wok to Walk Franchise BV located in the Netherlands to out Russian counterpart, LLC Wok to Walk Russia located in Saint-Petersburg, to ensure the unique look of our restaurant and to allow our potential customers so identify the restaurant and our brand all over the world. The furniture for the dining room consists of tables (10 items), stools (10 items) and benches (20 items), which are made of solid oak wood. The furniture is to be shipped in a disassembled way, packed in both bubble wrap and cardboard boxes and to be assembled by the customer (instructions on assembling are attached). For more detailed specification of the products to be shipped see the Appendix 1.

Our supplier produces the furniture in Slovakia and we store it in our warehouse in Rotterdam. We offer to deliver the furniture from Rotterdam to St. Petersburg in a twenty feet container within 12 days from the date of signing an agreement. We suggest setting the prices in euros on the CIF Saint-Petersburg basis (Incoterms 2010), which means that the product price includes:

• packing and marking

• drawing up the accompanying and Customs documents

• export Customs clearing

• freight charge

• insurance that assumes all risk to the goods (loss or damage) during the transportation insurance.

We provide the Marine Cargo Insurance under the “A”-Clause. It covers all the risks of loss and damage to the cargoes, except of washing overboard, during loading and unloading and lightning.

The list of documents to be transferred is included in Appendix 1.

The counteroffer

We suggested that the payment be made with an irrevocable and confirmed letter of credit. Also we would like to have 40 per cent upfront payment. The offeree, however, wasn’t willing to agree, because the transaction costs are high and two transactions caused inconvenience for the offeree. We agreed to revise the terms of payment in case the franchising agreement for further collaboration was discussed.

The offeree was also interested in getting some special discount in the future in case of further collaboration. This can be arranged in the future on the basis of a long-term and loyal relationship as a result of the franchising agreement.