South-Western - Management  
Middle East to Get 'Ultimate Ice Cream Experience'
Topic Global Business
Key Words Globalization, barriers to trade, entry strategies, contractual agreements
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News Story

Cold Stone Creamery, the fastest growing ice cream concept in the U.S., has announced new plans to take its "Ultimate Ice Cream Experience" deep into the Middle East.

According to a recent press release, the Scottsdale, Ariz.-based franchise has reached an agreement with Dubai-based Apparel Group to open more than 40 Cold Stone stores over the next five years in the Gulf Cooperation Council (GCC). Member countries of the GCC include the United Arab Emirates (UAE), Kingdom of Saudi Arabia, State of Kuwait, State of Qatar, Kingdom of Bahrain, Sultanate of Oman, and The Hashemite Kingdom of Jordan. Cold Stone plans to open its first store in Dubai, United Arab Emirates, by May of 2007.

"We are truly excited to partner with the Apparel Group to launch Cold Stone Creamery in the Middle East, and to bring the ultimate ice cream experience to Dubai as early as May," said Lee Knowlton, president of international and new business development, Cold Stone Creamery. "They are incredible retail operators and share the same desire we do, to make people happy around the world."

The UAE's Apparel Group has carved a niche for itself through its exclusive mix of international retail concepts. Currently, it operates nearly 230 stores across the Middle East, encompassing at least 29 brands, including Tommy Hilfiger, Kenneth Cole, Anne Klein and Nine West. The Apparel Group's vision aims at being the premier source of contemporary fashion and food in its region by entering partnerships with world-class concepts and top international brands.

Since its international arrival, Cold Stone has served more than one million ice cream lovers through its eight Japanese stores, and thousands of others through its four Korean stores. The company plans to open international stores in Indonesia and Mexico and is exploring many other international markets. Cold Stone Creamery was ranked No. 14 in the January 2007 "Franchise 500" issue of Entrepreneur magazine.

Questions
1.

How is Cold Stone Creamery able to rapidly expand its presence with hundreds of new store locations each year?

2.

After reading the article, list three challenges that threaten both XM and Sirius as a result of this merger.

Source "Cold Stone Creamery Announces Expansion Plans for the Middle East," Business Wire, Jan 30, 2007 pNA
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