PONTIFICIA UNIVERSIDAD JAVERIANA

International Business

1st Draft Project

INTEGRANTES
Isabella de Avila
Luis Alberto Leal
Juan Felipe Sua
Santiago Orjuela
Juan Felipe Manotas

DOCENTE
Carlos Ramos

Bogotá D.C.
15 of August of 2019

 
INTRODUCTION
Mario Hernandez is a Colombian brand that has 41 years in the market, funded in 1978, its
main business activity is the manufacture of leather goods business. Their first store was in
Colombia and it now employs more than 1050 employees. They are perceived and positioned
worldwide as a luxury brand, with good quality goods.

● Mission
“We characterize for having the highest combined quality with trends that rule the
fashion world, generating exclusive products and haute couture to expand the
expectations of our clients, collaborators, and community; with products and lifestyle
experiences.”(Hernandez, 2018, P.01)
● Vission
“Our lifestyle brand will be recognized by positive experiences, fancy and matchless
(benefit-price) products. Will be regional leaders with more than 130 distributors
around Colombia, Venezuela, Panama, Costa Rica, Aruba, Mexico, Peru, Chile, The
Caribbean, and Central America. Therefore we want to expand our worldwide style
and reach to become the number one brand in Latin America. We will strengths our
online red space to commercialize in the web market and communicate with our
clients.”

Mario Hernandez exports, imports, has franchises, and national investments. The imported
goods come mainly from a partnership he made, in 1992, with a spanish factory when he
designed “Bolsos de Mariposa” famous collection. The factory is dedicated to leather tanning
making it the principal supplier of luxury leather to Mario Hernandez currently. Other
imports such as canvas come from China because of the low-cost workforce in the country.
The remaining imports come from Brazil, where their brand shoes are made, etc. However,
the products are presented as if they were made in Colombia.
The export process consists in the shipping of merchandise to different countries in which
they have franchises, this process is made through “empack” (massive system of distribution
which has a large capacity of storage.

1. Theme (phenomenon):

We Interviewed the junior manager of the company, Jesus David Sanez (2019) and according
to his information: “ Marroquinerias S.A.S counts with 44 own stores and 25 franchises
worldwide (...) One Mario Hernandez franchises is valued around 500 million COP”.

Currently, Mario Hernandez has franchises in countries like Guatemala, Panamá, Venezuela,
Ecuador, Perú, Chile, Costa Rica and Mexico. The country with more franchise of the brand
is Panama followed by Venezuela (...) In 2018 there was a higher quantity of franchise stores
in venezuela but they have been closing in the past year (Sanez, 2019).
 The following standards, according to Sanez (2019) must be followed 100% in order
for someone to open a franchise:
Market Mario Hernandez products solely and they can only sell past collections of the
brand (...)The interior design of the franchise must be supervised by the Visual ( A
person in charge of merchandise in the company) (...) Accomplish set parameters and
established margins in order to have the franchise. It is not known the exact figures
although is supposed a 60-40 rule; where the 60% of sales goes to Marroquineras
S.A.S and the other 40% to the owner of the franchise. However, this policy is being
modified due to the fact that a lot of owners of the franchises are complaining. The
sales control system, inventory control system and billing control system must be
homogeneous between all the stores under Mario Hernández name, in order to have a
real control of the value that the franchise goods are being sold in foreign markets.

There are other legal specifications that are treated deeply and correctly according to the
country.

The first store outside the country was un 1989 , 11 years after the brand foundation,
in Venezuela. This was the chosen place because venezuelans had a high acceptance level of
the brand and was sold a lot. After the first store was open, 5 years later, it was open 4 own
stores and 7 franchises in Venezuela (Sanez, 2019).

The stores in Guatemala, Chile, Mexico and Ecuador came out almost simultaneously
in a franchise type. Mario Hernandez did not open directly these stores because there were a
lot of venezuelan investors applications to try to open stores in new markets. In that time
Mario Hernandez knowledge was limited and fear in terms of lost was big to enter in
countries where the brand was not recognized (Sanez, 2019).

In order to have a franchise the person interested must submit ​an application to the
managers in which he or she specifies that it is being tried to open a franchise. ​It must sustain
the precedence of money and submit all the pertinent information of the person that wants to
open the franchise. This for the purpose that the company can investigate the person (Sanez,
2019).

When this process is passed, an appointment with Mario Hernandez, Alvaro Carama
(general manager) and Andres Hernandez (marketing Management) is scheduled. The person
specifies in which country and the exact location where the franchise would be located,
because there are limitations for certain places. For example in Europe (...) This limitation of
continent has two causes; first, one is that Mario already tried opening one in Madrid and it
failed . Then they concentrate on straightened the brand in Colombia and Latin America to
then enter to Europe. one of its organizational goals is to have shops in Europe by 2022 all
own by Marroquineras S.A.S (Sanez, 2019).

2. Problem(s) and question(s)

In the past Mario Hernandez tried to open different stores and Franchises in important
countries such as Spain and the United States, but due to the lack of knowledge in brand and
image in these countries, they had to close these stores and did not open a Franchise until
2014 in Russia (which also were close by 2016). Also, Mario Hernandez Company is
planning to open new franchises in Europe and North America

Based on the problem that Mario Hernandez Company had, especially about franchises, we
are going to develop an investigation about what are the reasons why Mario Hernandez
company opens, closes and maintains their franchises and compare it to the theory of the
Professor Alba Aldave.

3. Methodology

Our methodology for this project relies on a qualitative instrument, and an in-depth interview
with Mario Hernández (CEO of the company Mario Hernández). The interview is scheduled
as a part of a dinner with Hernandez and has a duration of 45 minutes, approximately. (The
date and place has not been arranged yet due to Hernandez compromises).

First of all our plan consists of checking data from different sources such as passport to
conduct a potential market analysis to determine which countries would be good for either
expansion of current franchise numbers in said country or which countries would present a
good opportunity for franchising.

The interview is a semi-structured interview, because we want to have a guide of questions

that will create a path for us to play with, in the way that the questions will give us some
answers from Hernández, and we can take them as a step to look into more information and
go further in the investigation. For example, the question ¿why did you close the Mario
Hernández store in New York? will allow us to know the reason why they closed the store,
which is a great way to ask if there is any standard or rule to close stores-franchises in the
countries they are located.

Some of the questions we have prepared for the interview are:

● Why did you close the New York store?
 ● Has the dollar crisis made some impact on the opening and maintaining of the stores
in other countries?
● You have said in some interviews that you just want to open stores in places where
the brand is known, like Miami (because of the Latin people), but if you are
projecting to take Mario Hernández to other countries, Is it required for the brand to
be known in those places for you to make the decision to open the store? If you want
to open a store in a country, but the brand is not known there, do you cancel the
opening plan?
● How do you enter new markets if you do not take into account places where the brand
has not history or recognition?
● Do you think that franchise business brings positive benefits when it comes to open
stores in different countries? for example, it could be a good opportunity to enter to
new markets with the help of somebody (the one who has the franchise) that knows
the culture of that country

One of the big benefits of the depth interview with Mario Hernández is that we have
direct access to information that the company does not make public because is just for an
objective public. In this case, we would have access to the whole franchise operative manual
of the company, to answer why do they maintain and close their franchises (information that
is not public). On the other hand, the interview would help us to ​broaden the information we
already have about how they open the franchises (for example, the cost which is 500 million
COP and how Mario chooses the person that will own the franchise. All this is already
explained in theme).
The depth interview will help us to compare what kind of elements Mario Hernández
has in comparison to the ones that Alba and Funes define in “Elementos que intervienen en la
valuación de una franquicia para su compra o venta”. For example cost of effectiveness,
transmit teachings to others, systematization, commercialization, transfer and originality. The
objective is to determine if Mario Hernández franchise operative manual is as complete and
rigorous as the one defined in the world perspective written by Cristina Alba.

4. Objectives:

General Objective​: Define the conditions for Mario Hernandez Company franchise
licenses to be granted, broke and maintained.
Specific Objectives​:
● Investigate if is it possible to Mario Hernández Company to open franchises in other
countries departh from 2018
● Examine the main Mario Hernández franchises in Latin America to know what are the
factors that make the franchises successful
● Determine if the Mario Hernández 2019 franchise operative manual follows the
international guidelines defined by Cristina Alba in “Franquicias una perspectiva
mundial”
5. Bibliography:.
● Funes, Y., & Alba, C. (2005). 5. In UNAM (Ed.), ​Elementos que intervienen en la
valuación de una franquicia para su compra o venta​ (1st Edition, pp. 65–69).
Retrieved from
https://books.google.com.br/books?id=2vlilUI_i6EC&printsec=frontcover&hl=es#v=
onepage&q&f=false
● Mario Hernandez. (2015, April 19). Mario Hernández - manual de marca. Retrieved
August 12, 2019, from
https://issuu.com/joangarciamartin/docs/manual_mario_hernandez_marca_s_
● Unknown,(2015, January 23) Mario Hernández abrirá su primera franquicia en Miami

en el 2016. Retrieved August 13, 2019, from

http://www.100franquicias.com.co/Noticias/2015-01-23-Mario-Hernandez-abrira-su
-primera-franquicia-en-Miami-en-el-2016.htm
● J.Sanes, (Personal Communication, August 13, 2019)
● Traslaviña, D. (2018, October 3). Colombia: Mario Hernández cierra su operaciÃ3n
en México - América Retail. Retrieved August 12, 2019, from
https://www.america-retail.com/colombia/colombia-mario-hernandez-cierra-su-opera
cion-en-mexico​/º

6. Chronogram​: