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Kids&Us: International Expansion
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Reference: P-1151-E
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Year: 2015
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Number of pages: 26
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Geographic Setting: China, España
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Publication Date: Jul 13, 2016
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Source: IESE (España)
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Type of Document: Case
Description
Kids&Us is a successful family business founded by Natàlia Perarnau and Quim Serracanta. In Spain, the company has revolutionized methods used to teach children English from a very early age. The Kids&Us method is an innovative system that uses eye-catching materials with stories and characters that appeal to children, interactive classes in which songs play a key role, and CDs to facilitate repetition of content at home. The business model is based on a system of franchise schools, with which Kids&Us has a very close relationship. Schools are provided with strong support, but, at the same time, the level of quality is strictly and comprehensively controlled. This case describes the current operating model and the company?s relationship with its franchise schools in detail.
Kids&Us has over 230 franchise schools in Spain and has started expanding into other European countries. As a result of this expansion, it is becoming more difficult for the company to exercise control over its franchisees, and problems have started to emerge. At this point, as they consider what model is likely to work best to manage expansion, the owners have been presented with an opportunity to introduce Kids&Us into the Chinese market. They debate whether or not to enter this market?one that is not without risks?but also whether they should continue using the master franchisee model or manage the company?s expansion directly.
Learning Objective
The case can be used in class to examine and discuss various aspects of service management, namely:
- service design, including aspects related to product, process and experience;
- standardization of parts of the delivery process and participation of customers as value drivers in service design;
- structuring a franchising model (possible models, economic logic, incentives and control mechanisms);
- operational challenges associated with international expansion of a retail-type business, in which the store (or school in this case) is a key operational element.
The case also allows for discussion of the organizational and cultural challenges associated with rapid expansion of a family business that has a very strong culture, and whose founding members play a very significant role.