Why and How Retailers Internationalize - H&M - Literature review Example

There are a number of reasons and motivations for the retailers including H&M to internationalize. One of these motivators is retail expansion due to saturation in the local market. Other motivators for internationalization are resource seeking, market seeking, efficiency seeking and strategic asset seeking. Resource seeking and market seeking are usually motivators for a firm’s initial internationalization strategy, while the other two are for sequential internationalization. After motivation triggers the internationalisation process, the retail firms has to study the market to be entered, so they can optimally position themselves there.

Number of factors will help the firms including H&M in market positioning, thereby aiding them in carrying out the operations aptly. These typically include selecting the right target market, studying and understanding the competitive environment, then accordingly formulating steps to improve their competitive position, having a strong store brand image, and controlling the supply chain. Another very important factor that would determine success is the mode of market entry. There are a number of modes but the most common ones are licensing, franchising and joint ventures.

These modes are only followed by number of retailers including H&M while expanding overseas. There are others entry options such as acquisition, mergers and contracts, but is not a part of the scope of this paper. This paper will review existing literature on reasons why retailers internationalize – Motivation for Internationalization, in brief. These are fundamentally the same for many firms, retail or non-retail. Moreover, market position that ensures that an internationalization strategy is a success in foreign shores will be discussed.

Finally, how retailers internationalize or methods they use to enter new markets will also be discussed concisely. All of this will be discussed keeping in mind the practical case of the renowned fashion