SECTION B - Case Analysis [Total = 25 marks]

Originally launched in Chicago in 2016, RoboThink has since expanded its operations worldwide, especially in Asia. It was a passion project by entrepreneur, Danny Park, who wanted to build a company that lays the foundation for young kids to pursue careers in STEM-based occupations (Science, technology, Engineering, Medicine). Kids use the materials provided by the company to learn a concept code, build a robot from RoboThink's Lego-esque plastic components, and then apply the concept code to the build to make it perform certain functions. The franchise heavily emphasises its commitment to teaching young children the essential skills that will prepare them for an advanced career in the sciences. RoboThink franchises are available for purchase in a number of countries including Malaysia. Total investment is not too high at approximately US$50,000. This includes inventory costs, supplies, and training, which will be assisted by RoboThink main office professionals. (Source: SME Magazine, December 2020 Malaysia Edition)

Question 1 Define franchise. What is the nature of business of RoboThink? Question 2 A franchisor can employ a cost leadership strategy by pursuing the integration strategy, specifically vertical integration. Explain the benefits of vertical integration in relation to value chain.

Question 3 Explain the difference between forward integration and backward integration.