The Competitive Advantage of Nations Michael E. Porter Determinants of National Advantage Firm Strategy, Structure and Rivalry Demand Condition Factor Condition Related and Supporting Industries Factor Condition Factor of Production: Labor, Land, Natural Resources, Capital and Infrastructure Factor Endowment: Human Resources, Skills Physical Resources: Quality, Cost, Abundance, and Accessibility of Natural Resources Knowledge Resources: Scientific and Technical Knowledge Capital Resources: Capital Available and Financing Infrastructure: Quality of Infrastructure for Effective Competition Basic and Advanced Factors: Basic: Natural Resources Advance: Educated Workforce and Modern Digital Communication Factor Creation: Building of Educated Skilled Workforce and…… Demand Condition Home Demand Condition: Home Demand and Perception of Buyers Needs Segment and Distribution of Demand for particular Product and Varieties Size of the Segment can be Small or Large in Domestic and International Market Sophisticated and Demanding Customers for Innovative Products Anticipatory Buyers Needs that Could be Used for Demand Size of the Home Demand can Lead Toward Economies of Scale Early Home Demand and the Rate of Growth Early Saturation of the Domestic Market to Expand in the Global Market Domestic Needs can Influence International Market and Needs Related and Supporting Industries Domestic Firms can Produce Innovative Inputs for Expanding in Global Market Efficient Access to Most Cost Effective Inputs for Developing Domestic and Global Market Preference Over a Reliable Domestic Supplier Compared to a Foreign One Cultural Similarity and Proximity with Domestic Firms International Success in One Industry can Lead to Demand for Complementary Products or Services Firm Strategy, Structure and Rivalry The Pattern of Rivalry at Home in Innovation and Innovative Products Managerial Practices at Home in the Areas of Leaders Orientations, Managerial Skills and Initiatives Skills in Understanding Different Cultures and Learning Languages, Firms International Outlook The Company’s Goals in Terms of Motivation, Structure and Incentives Attitude Toward Accumulation of Wealth by a Company, Quick or Slow Sustained Commitment of a Company to Workforce, Product and Business Domestic Rivalry at Home for the Creation of Competitive Advantage The Role of Chance and Government Chance is Out of the Control of Firms. Chance can Create Discontinuities Allowing Shift in Competitive Advantage Chance Can Be Major Shift in Input Cost, Exchange Rate, Natural Disasters Chance of Having a New Invention Can Help a Company Tremendously Government can Influence the Other Four Components of the Porter Model Government can Impose Tariff, Change Regulation in Capital Market Government can Shape the Circumstances of the Related and Supporting Industries NOBU HOSPITALITY LLC Nobu holds the position of being one of the most luxurious hoteling brands all around t.

1. The Competitive Advantage of Nations
Michael E. Porter
Determinants of National Advantage
Firm Strategy, Structure and Rivalry
Demand Condition
Factor Condition
Related and Supporting Industries
Factor Condition
Factor of Production: Labor, Land, Natural Resources, Capital
and Infrastructure
Factor Endowment: Human Resources, Skills
Physical Resources: Quality, Cost, Abundance, and
Accessibility of Natural Resources
Knowledge Resources: Scientific and Technical Knowledge
Capital Resources: Capital Available and Financing
Infrastructure: Quality of Infrastructure for Effective
Competition
Basic and Advanced Factors:
Basic: Natural Resources
Advance: Educated Workforce and Modern Digital
Communication
Factor Creation: Building of Educated Skilled Workforce
and……
Demand Condition
Home Demand Condition: Home Demand and Perception of

2. Buyers Needs
Segment and Distribution of Demand for particular Product and
Varieties
Size of the Segment can be Small or Large in Domestic and
International Market
Sophisticated and Demanding Customers for Innovative
Products
Anticipatory Buyers Needs that Could be Used for Demand
Size of the Home Demand can Lead Toward Economies of Scale
Early Home Demand and the Rate of Growth
Early Saturation of the Domestic Market to Expand in the
Global Market
Domestic Needs can Influence International Market and Needs
Related and Supporting Industries
Domestic Firms can Produce Innovative Inputs for Expanding in
Global Market
Efficient Access to Most Cost Effective Inputs for Developing
Domestic and Global Market
Preference Over a Reliable Domestic Supplier Compared to a
Foreign One
Cultural Similarity and Proximity with Domestic Firms
International Success in One Industry can Lead to Demand for
Complementary Products or Services
Firm Strategy, Structure and Rivalry
The Pattern of Rivalry at Home in Innovation and Innovative
Products
Managerial Practices at Home in the Areas of Leaders
Orientations, Managerial Skills and Initiatives
Skills in Understanding Different Cultures and Learning

3. Languages, Firms International Outlook
The Company’s Goals in Terms of Motivation, Structure and
Incentives
Attitude Toward Accumulation of Wealth by a Company, Quick
or Slow
Sustained Commitment of a Company to Workforce, Product
and Business
Domestic Rivalry at Home for the Creation of Competitive
Advantage
The Role of Chance and Government
Chance is Out of the Control of Firms. Chance can Create
Discontinuities Allowing Shift in Competitive Advantage
Chance Can Be Major Shift in Input Cost, Exchange Rate,
Natural Disasters
Chance of Having a New Invention Can Help a Company
Tremendously
Government can Influence the Other Four Components of the
Porter Model
Government can Impose Tariff, Change Regulation in Capital
Market
Government can Shape the Circumstances of the Related and
Supporting Industries
NOBU HOSPITALITY LLC
Nobu holds the position of being one of the most luxurious
hoteling brands all around the globe. People who own Nobu,
three people to be exact, are Robert De Niro, Meir Teper and
Chef Nobu. Nobu is recognized for its exquisite cuisines and a
large celebrity following which influences other people to
engage in the experience this luxury brand offers.
Nobu runs its operations in five continents and blossoms in

4. various world capitals. The brand image is based on quality
service, customer satisfaction, and amazing hospitality that
provides people all around the world with opportunities to
indulge in restaurant management for the purpose of investing
in new projects all around the globe. (Hospitality Net)
Abstract:
This paper is going to talk about the general and more in-depth
information about Nobu brand and how it expanded globally.
You will also learn about the various phases the restaurant went
through in its process of expanding while also being consistent
with its quality and standards as well as following the law, rules
and regulations of all the countries it is operating its function
in.
Statement:
The purpose of this paper is to answer questions like how a
reputable brand like Nobu deals with various problems while
expanding and what benefits and difficulties it faces while
complying with multiple kinds of laws and regulations
according to each country it operates its functions in. The paper
will also discuss what each of these countries brings on the
table as far as drawbacks and facilities are concerned.
Background:
The issues that are going to be discussed regarding my case
study include the global expansion of Nobu brand keeping in
mind its reputation of being a luxury brand that not everyone
can afford especially when it comes to underdeveloped or
developing countries.
Another agenda that is to be discussed is what benefits were
offered to Nobu that made the expansion and operating process
easy and enjoyable while also being profitable for Nobu and
what were the difficulties Nobu faced that made it hard for it to
sustain its profit levels and maintain its standards.

5. Hospitality Industry:
The category of hospitality industry is like a vast sea of
subcategories including food, tourism, hoteling, event planning,
amusement opportunities and other service based industries.
Nobu first joined the hospitality industry in 1994 in New York.
(CNN business).
In the words of Robert De Niro, from the first restaurant they
ever opened, “it just grew and grew”. De Niro takes pride in the
fact that when a customer walks in into the restaurant, he trusts
the quality of the food and the service provided in the
restaurant. Nobu and De Niro plan on opening more franchises
every few years just like they planned on opening five new
properties in 2018. (Travelmarket, 2017)
Global Growth:
Every business aims on expanding and after a smash hit success
the business puts the plan in action. Nobu gained popularity and
success in a short span of time for various reasons. The
involvement and ownership by an Oscar winning actor was one
of the biggest reasons behind the success because when a
celebrity is associated with a brand, or vice versa, word spreads
really fast and people are eager to try what their role model has
created for them.
Another reason was the experts working at Nobu. All the chefs
were skilled and knew exactly what they were doing, the
aesthetics of the restaurant were appealing, the taste of the
cuisine was exquisite and the service offered was also
remarkable. Nobu started as a restaurant business and joined the
hoteling industry soon after. (CNN business)
Expansion:
Nobu has expanded its operations all around the globe in
various countries. Following is a list of all the countries
USA
Europe
Middle East

6. Africa
Mexico
Caribbean
Asia Pacific
South America (Nobu)
USA:
In USA, the restaurants exist inDallas,New York
Downtown,New York Fifty Seven,Honolulu,Houston,Lana'i,Las
Vegas Caesars, Palace,Las Vegas At Bally's,Los
Angeles,Malibu,Miami,Newport Beach,Palo Alto,San
Diego,Scottsdale,Washington D.C., andChicago
Europe:
In Europe, the Nobu restaurants are inBarcelona,Budapest,Ibiza
Bay,London Berkeley St,London Old Park Lane,London
Shoreditch,Marbella,Milan,Monte Carlo,Montenegro,Moscow as
well asMoscow Crocus City.
Middle East and Africa:
Nobu has three locations in Middle East and Africa in Cape
Town, Doha and Dubai
Mexico and Caribbean:
Four locations including Bahamas, Mexico city, Mexico city
Polanco and Los Cabos.
Asia Pacific:
Hong Kong, Kuala Lumpur, Manila, Melbourne, Perth and
Tokyo
South America:
São Paulo Jardins, Nobu Angra Dos Reis and Pop Up.
BENEFITS:
Fortunate Regulations:
When Nobu opens up a restaurant in a new country, depending
on the law and order of that country, it utilizes the favorable
regulations if it is fortunate enough to encounter such a
situation. Some countries have a lenient tax structure that helps

7. Nobu save money which he can invest in other aspects of his
brand.
For example the taxes and fees needed to start a business in
China is less than it is in the United States, same is the case
with other countries. Paying lower fees and taxes can improve
the return levels of Nobu. (CHRON)
Brand Image:
One very big advantage that Nobu has while opening a new
branch in the same country or a different country is the positive
brand image that it holds. People all over the world know about
Nobu, mainly because of the fact that it is co-owned by Robert
De Niro. Nobu has a very strong reputation for serving the best
food and providing the best quality and this is why when it
opens in a new country, it does not have to worry about people
approaching the restaurant and vice versa. (PREMIERLINE,
2015)
Cost Saving:
Because of the positive brand image, Nobu does not need to
spend a whole lot of money on advertising and promotional
activities. People are already aware of the next opening through
the website, interviews, and social media and so they approach
Nobu themselves. Most of the time, people are already waiting
for the opening before Nobu even decides to bring its operations
to a certain part of the world.
Loyal Customers:
Not everybody can afford to book a room at Nobu or enjoy a
meal in the said restaurant because of the high price point but
those who can afford it, become the most loyal customers
because of the
luxuries and unique services offered by Nobu Hotels.
These loyal customers become the source of unasked
appreciation in the form of “word of mouth”. When people all

8. over the world rave about the food, services, innovatory
practices and high customer satisfaction levels, more people are
bound to come in to try Nobu and fall in love with it.
More Investors:
Goodwill and excellent reputation brings in more investors to
most industries and businesses. Same is the case with Nobu
Hotels. Because of its high profit levels, big investors globally
are inclined towards investing more in Nobu because they know
that the chances of loss are almost non-existent and that they
are only going to make more and more profit. (UK ESSAYS)
DISADVANTAGES:
Cultural Differences:
Cultural barriers can be one of the potential problems while
franchising in a new country. People are reluctant to change
especially when it comes to something as basic and necessary as
food and accommodation. Something that is popular in the
United States might not be popular in Mexico. Similarly, just
because Americans like light food with close no to spices, does
not mean it will be appreciated in the same way in Spain too.
Even a brand as big as Nobu, might have trouble predicting the
culture of a new country and getting it right each time. It needs
a lot of research and appropriately calculated risk taking to
open a new franchise in a country which has a very different
culture. (CHRON)
Financial Risk:
Risk is a constant factor in business, old and new alike, but
when a brand franchises on international land, the calculations
of risk change. The differences in currencies and exchange
process might make the business less profitable. Nobu faces the
same drawback when opening a new restaurant. Shipping
charges, taxes, and tariffs can add up to the cost of production
and lower the rate of return for Nobu Hotels. (Siebert, 2019)

9. Compliance Challenges:
The business laws, orders, and policies vary from continent to
continent and even from country to country. Nobu faces this
challenge too. The ingredients that are allowed to be consumed
from a religious point of view in one country might be
forbidden in another country. The policies of a country that
allow a restaurant certain ways of running a business might vary
from policies of a different country. Employee rights and human
resources of different countries also vary.
For example, in one country employees may be paid in hourly
wages while in another country, they might be getting paid
monthly. All of these changes create the need for a new legal
team and compliance terms for Nobu. (CHRON)
Franchise Fees:
Some countries demand a huge chunk of money from new
franchises. Sometimes when Nobu opens up a franchise in a
country, it takes years to reach the breakeven point which
results in low profit levels. (PREMIERLINE, 2015)
Competitors:
Already existing hotel and restaurant brands pose a threat for
Nobu hotels when starting a new franchise. This goes for both
domestic and international branches. It is especially hard to
compete with a local existing brand in a country because people
are familiar with their own hotels and restaurants more so than
other restaurants. (AmericasBestFranchises, 2015)
Growth Risk:
It is a hypothetical situation that if and when Nobu fails to run
its operations smoothly in a new country and if and when this
news sees the light of the day, customers will assume that Nobu
has lost its touch and is now going towards loss. This will stop
new investors from coming in and will also result in the loss of
loyal customers. Fortunately, it has not happened yet but it
cannot be said that it will never happen. (UK ESSAYS)

10. Limitations:
Opening a franchise includes complying with the laws enforced
by the government. This can limit Nobu Hotels from exploring
their creative side or adding their own personal touch. It can
also limit the amount of SBUs (Strategic Business Units) that it
wants to explore and invest in. (Brookins)
CULTURAL DIFFERENCES:
Opening a business in a new country can bring a lot of cultural
differences and these differences can become hurdles in the way
of smooth running of business. Nobu also faced these issues.
Since Nobu is a restaurant and hotel, most of these differences
showed themselves in the form of food. Following are the
countries that Nobu Hotels opened in and how the food differed
from the United States.
CHINA:
Chinese food is served in sharing which means more than one
person can eat from the same platter whereas American food is
served in single servings. American food has more sugar and
therefore is sweeter than Chinese food. Also, Chinese cuisine
does not have a lot of dessert recipes and so the concept of
baking and sweet dishes is not as developed and liked as it is in
America. American people like lots of meat and steaks and
Chinese people have a better liking for vegetables. (Quora,
2013)
DUBAI:
Dubai is an Islamic country and so the biggest difference is that
Pork and dishes made from pork
are forbidden in Dubai, so it alcohol whereas these things are
allowed and very common in America. Also, Dubai has more
traditional dishes that they take pride in and enjoy (example:
lamb & rice) whereas America does not have any traditional
dishes per se. (Advance Custom Writing)

11. RUSSIA:
Russia is a cold country and so people really enjoy warm foods
mostly. The two most common foods / beverages consumed in
Russia are soups and different variations of hot tea. The most
consumed foods / beverages in America are fast food, steaks
and soda pops. (Charlie Baggs)
EUROPE:
The use of additives and preservatives in food is strictly
prohibited in Europe whereas there is no strict prohibition in
America which makes it different for Nobu since it has to take
good care and consideration in Europe.
The countries and their differences discussed above tells us
what precautions Nobu has to take while opening restaurants in
any other country than America.
AmericasBestFranchises. (2015, August 24). Retrieved february
9, 2020, from AmericasBestFranchises:
https://americasbestfranchises.com/blog/franchising-
competitors/
PREMIERLINE. (2015, JANUARY 30). Retrieved FEBRUARY
9, 2020, from PREMIERLINE:
https://www.premierline.co.uk/knowledge-centre/what-are-the-
advantages-and-disadvantages-for-the-franchisee.html
Travelmarket. (2017, DECEMBER 27). Retrieved FEBRUARY
9, 2020, from Travelmarket:
https://www.travelmarketreport.com/articles/Nobu-Hospitality-
to-Open-Five-New-Properties-in-2018
Brookins, M. (n.d.). CHRON. Retrieved february 9, 2020, from
CHRON: https://smallbusiness.chron.com/disadvantages-
franchises-186.html

12. CHRON. (n.d.). Retrieved FEBRUARY 9, 2020, from CHRON:
https://smallbusiness.chron.com/advantages-disadvantages-
international-franchises-22488.html
CNN business. (n.d.). Retrieved February 9, 2020, from CNN
business: https://edition.cnn.com/2018/09/28/business/robert-
de-niro-nobu/index.html
Hospitality Net. (n.d.). Retrieved FEBRUARY 9, 2020, from
Hospitality Net:
https://www.hospitalitynet.org/organization/17016422/nobu.htm
l
Nobu. (n.d.). Retrieved February 9, 2020, from Nobu:
https://noburestaurants.com/
Siebert, M. (2019, JANUARY 9). Entrepreneur . Retrieved
FEBRUARY 9, 2020, from Entrepreneur:
https://www.entrepreneur.com/article/323371
UK ESSAYS. (n.d.). Retrieved FEBRUARY 9, 2020, from UK
ESSAYS:
https://www.ukessays.com/essays/business/advantages-and-
disadvantages-of-domestic-and-international-franchising-
business-essay.php