How to Transition from a Small Business to a Franchise: designing a Business Model for a Company that Prepares Traditional Mexican Food

Abstract

Small businesses that survive for more than five years can position themselves in the market and gain a comparative advantage, allowing them to operate with acceptable profit margins. For instance, a small food company that has maintained its presence in a highly competitive market for 35 years. However, it has neither grown nor advanced to the next level of business maturity, still functioning as a “changarro” with informal structures and processes, reflecting empirical and inefficient management. This situation raises the following research question: How can a traditional Mexican food company evolve from being a “changarro” to a formally established entity with the potential to become a franchise? To address this question, the methodology of organizational systems design is applied in its analysis and design phases, considering the systems approach and the theoretical aspects of Michael Porter’s theory of competitive advantage, which enable the company to create value for its customers. The proposed model is based on the theoretical foundations presented by Osterwalder in the Canvas methodology, with a strategic and business approach that defines the aggregated decisions to build the value model. Finally, a schematic representation of the business model is provided to highlight its main technical characteristics. The scope of this proposal is limited to the design of the eclectic business model at the first level of detail in a schematic representation. It is concluded that, technically, building a business model is straightforward; the challenge lies in the organizational change that must be driven by the company’s founder and the investment required to achieve it.