Introduction
Fast-food companies have become phenomenal in modern society. They are usually situated in congested areas to attract customers. Many fast-food restaurants operate in the industry, with most being fully established, while others are in the process of development. One fast-food company in the process of developing itself is Leon Restaurants. The chain is located in the United Kingdom, although it has expanded into other European countries. The company intends to expand into the Chinese and Australian markets.
The two markets have appropriate government policies regulating them, making them suitable for foreign investors. They also have a large population, which fast-food companies need. Therefore, the Human Resources (HR) department at Leon Restaurants should ensure that employees acquired for the new markets have the necessary skills and knowledge to perform as expected in the new markets.
Background
The demand for fast food has become prevalent in the 21st Century, especially in developed countries. Fast-food restaurants are typically located on busy streets and at train and bus stations. The major fast-food restaurants are McDonald’s and Burger King, although Leon Restaurants are growing rapidly in modern society. Leon is primarily found in Europe, with a notable presence in the United Kingdom, where there are 49 restaurants.
The founder, John Vincent, has been utilizing modern business strategies to explore the market. As a result, he has partnered with like-minded persons from other countries to expand the company to new markets and countries. To compete with McDonald’s and Burger King, Leon must expand into markets outside Europe. The countries where Leon is likely to find a good product market include China and Australia. This report examines the resource opportunities and challenges that Leon may face as it expands into China and Australia. The report also explores some recommendations that Leon can rely on to overcome the challenges that might deter them from effectively venturing into the new markets.
Resourcing Opportunities
China has the most significant labor market and an excellent working population (Rong et al., 2020). It also has the highest number of youth intending to be trained to join the job market. Therefore, the country has reliable labor sustainability that is unlikely to shrink anytime soon. The availability of a reliable labor market makes China a preferable country for business entities to venture into and explore.
For instance, China created 13.2 million jobs in 2019 due to its aggressive training of its people on the skills required in the modern market (Rong et al., 2020). Since Leon Restaurants intends to venture into the Chinese market, it will have the advantage of acquiring a fully trained and skilled workforce for its restaurants. Chinese people are more willing to learn new skills intended to enhance their performance; thus, Leon will have an easy time training the acquired employees on the skills needed to perform as expected in their restaurants.
Australia, like China, has a tight and highly skilled labor market. The country has reliable training facilities that equip its population with the skills needed in the modern market. Although Australia’s labor market may not match China’s in terms of the availability of personnel to employ, the country is a reliable destination for business ventures looking to expand. The working age in Australia ranges from fifteen to 64 years (Clarke et al., 2019).
This working range enables business organizations to recruit employees from diverse age brackets who can perform various organizational tasks. Due to the nature of its operations, Leon would require young employees to enable it to meet its performance targets. The company will therefore be able to acquire young and energetic employees from the Australian labor market. Australia has an unemployment rate of 3.9%, whereas China has an unemployment rate of 5.9% (Clarke et al., 2019).
Despite the low unemployment rate, there is a high availability of employees for new business organizations. Although China has strict employment laws and regulations, they effectively address employees’ well-being. Leon’s fast-food restaurant chain prioritizes the well-being of its employees because they are key to the company’s performance. Therefore, the employment legislation set by China will be preferable for Leon in ensuring the well-being of employees in their Chinese restaurants.
Chinese employment laws and regulations state that employees should work a maximum of eight hours a day and 44 hours a week. Any additional work hours should be implemented after consultation with the trade unions and should not exceed one hour daily. China’s employment laws and regulations ensure that employees do not overwork, ensuring optimal performance (Cooke, 2020). Employment laws and regulations favor the Leon chain of fast food restaurants as it plans to open more locations in China.
Australia has well-stipulated employment laws and regulations that ensure employment rights are safeguarded. The Fair Work Act 2009 establishes the minimum conditions for employment and guides the HR department in treating employees (Pennington, 2020). Similar to China, Australia requires employees to work a maximum of 7.6 hours a day and a maximum of 38 hours a week, which is lower than in China (Wong et al., 2019). Australian employment laws and regulations also require employers to ensure the safety of employees while at work and to address all issues affecting employees adequately.
Therefore, the employment laws and regulations set in Australia favor Leon Restaurants regarding the well-being of their employees. Leon treats all employees equally and addresses their issues appropriately, enabling the locations opened in Australia to comply with the country’s employment laws and regulations. Australia and China have favorable employment laws and regulations, and are suitable markets for the company.
Talent management is essential for any HR department. China has a wealth of outstanding talent and experienced employees who can perform as expected, helping an organization achieve its goals and targets. Performance and profitability have become major trends in the current business world (Li et al., 2019). Since the Chinese work culture emphasizes hard work, endurance, and collectivism, Leon is better suited to performing well in the Chinese market. Leon also prioritizes training its employees to match their performance standards. Therefore, the Chinese market will be excellent for the company due to the Chinese people’s willingness to learn new skills.
The acquisition and maintenance of the talent needed by the company will enable it to match the performance standards set by other fast-food restaurants. The company will also be able to overcome the contemporary performance issues that are delaying fast-food companies from achieving their goals and targets. If explored effectively, the Chinese market will enable Leon Restaurants to reach new heights.
China is a working nation, and most people prefer to have ready-made food rather than cooking for themselves. Besides, China is an industrialized country with millions of employees working in various industries (Bick et al., 2020). Therefore, setting up a fast-food restaurant near the areas where employees meet to have their meals would help the company to grow. Besides the industrial strength of Australia, the country has an extremely high population and a complex transport sector. Therefore, the service stations are usually congested and busy throughout the year. Service stations can be strategic points for Leon Restaurants to set up outlets to serve the traveling public.
The high population, industrial strength, and busy service stations make China an excellent market for Leon Restaurants. The company will be well-known in the market since it aligns with China’s employment laws and regulations. On the other hand, Australia is a popular tourist destination, attracting over 9.4 million tourists annually (Goh & King, 2020). With the many tourists visiting the country each year, restaurants need to cater to a large number of tourists with ready-made foods. Most tourists are unable to prepare their own food but prefer to purchase ready-made meals from fast-food restaurants (Law et al., 2022).
Therefore, Australia is an ideal market for Leon Restaurants to enter and achieve its goals and targets. The Australian market would also be a suitable option, as Leon offers natural foods that are healthy for the body. The combination of features that the fast food company offers would make it a tourist favorite. Although Australia has a population of 25.69 million people, which is relatively low compared to China, the majority of its population is in the working class (Nguyen et al., 2019). Therefore, they do not have time to prepare meals, especially during working hours, and prefer ready-made foods that can be consumed quickly.
China has favorable government policies that support foreign investors. The Chinese government has been proactive in implementing laws and regulations that regulate market operations to ensure businesses thrive (Peirong & Al-Tabbaa, 2021). For instance, China has reliable manufacturing and transportation sectors.
Therefore, Leon Restaurants will not face the challenges of supplying goods and raw materials and delivering the finished products to its customers. The country is also famous for its low taxes, which attract foreign investors. Low taxation enables business organizations to grow and expand their operations (Hussain & Li, 2018). With low taxes and the favorable business environment set by the Chinese government, the company will perform excellently and realize more profits for its operations.
Australia, like China, also has a reliable transport sector. Australia mainly relies on buses, trains, and tram systems of transport, which will make the supply of raw materials and delivery of customers’ orders easy for Leon Restaurants. Due to the reliable and well-organized transport systems, China and Australia have busy service stations. Busy service stations should be the target points for Leon to set up their restaurants to attract more people to their products (Australia, 2019). Venturing into the Chinese and Australian markets will have a significant positive impact on the performance and profitability of the restaurants and will enable them to match the high competition from other fast-food restaurants.
Resourcing Challenges
The main challenge the company will face in the Chinese market is the difference between Asian and European types of food. Asian countries are known for Oriental foods, while European ones are known for Continental foods (Ariani et al., 2018). Therefore, the HR department will face the challenge of acquiring staff who can prepare Oriental foods for the Chinese market. There will be increased staff training in the new restaurants in China because the company cannot rely on employees from Europe to serve in the Chinese market.
To succeed in the Chinese market, the HR department must develop strategies that meet the needs and demands of the Chinese people. Oriental foods’ cooking methods differ from Continental foods’ (Cao et al., 2021). The ingredients and spices used are also different and require experience to be prepared effectively.
Although Australian foods do not differ much from European foods, like Chinese foods, setting up a new business in Australia faces several challenges. The major challenge foreign investors face in Australia is dealing with construction permits (Horgan et al., 2021). Before constructing new business premises in Australia, the investor must follow eleven tiresome procedures that delay most businesses from achieving their targets.
Numerous inspections and approvals from authorities also make the process time-consuming and costly. For Leon Restaurants to venture into the Australian market, the company must undergo all the construction permits and restrictions (Pimpa & Heffernan, 2020). The construction process of the new business premises will be costly for the company, and the HR department will have to apply reliable strategies to ensure the company achieves its goals and targets.
Leon Restaurants might also face the challenge of an employee shortage while venturing into the new markets. The two countries—China and Australia—have low unemployment rates; thus, acquiring employees for the new restaurants might be a challenge that might derail the company from achieving its goals and targets in the new markets. The new employees in the new markets will also need to be trained and equipped with the necessary skills to enhance their performance (Chen et al., 2019).
New employees might be ineffective without the necessary skills required in the Chinese and Australian markets. There might also be a lack of managerial staff to take on managerial roles in the restaurants that have started in the new markets (Chaudhary, 2021). Acquisition of employees to take over managerial tasks in the new restaurants will also require the HR department to heighten its training process to ensure it acquires the best employees. Acquiring employees with outstanding skills and abilities will enable Leon Restaurants to withstand competition in the market and maximize its competitive advantages to realize more profits.
The other challenge Leon might face in the new markets is the failure to understand the culture and employees’ motivation strategies in the new markets. Markets have varying cultures and different ways of motivating their employees. The Chinese market might be different from the Australian market. Therefore, the strategies to venture into the Chinese market might prove irrelevant to the Australian market. Understanding the cultures of the two markets will enable Leon to differentiate the business and employee relation strategies that can be utilized in China from those that can be utilized in Australia.
Recommendations
Any business organization’s success lies with its HR management’s efficacy. Therefore, the success of Leon Restaurants in the Chinese and Australian markets will rely on the HR department’s effectiveness and ability to address the rising issues in the new markets appropriately. First, acquiring employees and managerial staff in the new restaurants in the new markets requires an appropriate succession plan (Minbaeva, 2021). The HR department at the company should prioritize training employees and testing their efficacy before employing them.
The performance of employees in Leon Restaurants has enabled the company to attain the performance heights it has achieved in the fast-food restaurant industry. Since the new markets might have different operation strategies from the ones utilized in the United Kingdom, the HR department should ensure that the employees deployed in the new restaurants have skills that match the new market needs and demands (Dhanpat et al., 2020).
For instance, the types of foods consumed in China are different from the types of foods consumed in Australia and the United Kingdom. Therefore, the employees deployed in the Chinese restaurants must know how to prepare food according to Chinese standards. The employees deployed in the Australian restaurants must also possess the knowledge and skills to prepare the fast food according to Australian standards. Training and equipping the employees with the skills and knowledge required is the responsibility of the HR department.
Secondly, leadership and good leadership strategies are essential for the operation of business entities (Gyansah & Guantai, 2018). The new restaurants in the new markets will require leaders who understand the specifications of the new markets. The specifications of the Chinese market are different from the Specifications of the Australian market. Therefore, leaders must be conversant with what is required in the new markets to avoid colliding with authorities or relating badly to employees. There is a need for appropriate leadership training programs that can enable the HR department to equip the company’s leaders with the necessary skills and knowledge (Ager et al., 2018). Thirdly, new markets are prone to sudden changes, some of which might be natural or due to changes in government.
New market changes affect the operations of business entities in that market. Therefore, Leon Restaurants should be wary and fully prepared for any changes in the new markets in China and Australia. One way to prepare for sudden market changes is by training employees to operate under abnormal circumstances (Rana & Sharma, 2018). The HR department should occasionally impart skills to employees to overcome any new challenges in the new markets and enable them to be reliable under all circumstances.
Although the company faces prevalent challenges in the new markets, the new markets remain promising for new business ventures to thrive. For instance, the Chinese market is populated and busy throughout the day. Most employees do not have time to cook but rely on ready-made foods. Therefore, Leon Restaurants should seize this opportunity and utilize it to expand its operations in the Chinese market.
The Chinese market is expansive and promising for companies in the fast-food industry. The Australian market is also effective because of the many tourists visiting the country each year (Insan & Masmarulan, 2021). Australia has numerous tourist attractions and is among the top countries tourists visit globally. Therefore, the HR department should heighten its efforts to acquire enough employees to enable the company to open as many restaurants in Australia as possible.
The Chinese and Australian governments have also implemented reliable operations policies in their markets to enable investors and business entities to grow. For example, the Chinese government has perfected its manufacturing and transport sectors to ensure an effective supply of raw materials and delivery of finished products. Upon opening restaurants in the Chinese market, Leon Restaurants will enjoy the benefit of excellent manufacturing and transport industries, making the supply of raw materials and delivery of customers’ orders easy. The Australian market also has a reliable form of transport. Therefore, the success in the new markets will be achievable if HR implements appropriate operational strategies for the employees.
Conclusion
Venturing into new markets has constantly challenged many business organizations globally. New markets have varied operation strategies and regulations that might not be preferable for foreign business entities. To venture into a new market, HR must play a crucial role in equipping the new employees and leaders with the appropriate skills and knowledge needed in the new market. Leon Restaurants’ desire to venture into the Chinese and Australian markets might face similar issues that deter foreign companies from succeeding in new markets.
However, the HR branch in Leon’s chains of fast-food restaurants should implement appropriate training programs to equip its employees with reliable skills and knowledge. The company should also seize the market opportunities posed by the new markets to increase its productivity and profitability. The Chinese and Australian markets have high populations and effective government policies that make them friendly to foreign investors.
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