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International Retailer and the Pattern of Internationalization - Coursework Example

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The coursework "International Retailer and the Pattern of Internationalization" describes the driving force for advancing research on internationalization in retailing is the melding of knowledge between the three main players: Asian researchers, Western researchers, and international retailers. …
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Name of writer appears here] [Course name appears here] [Professor’s name appears here] [Date appears here] International Retailer and the Pattern of Internationalization Introduction International retailer is not a new phenomenon. Furthermore, such activities have generated economic and social conflicts for as long as they have existed. In late mediaeval England, the merchants sought protection from the foreign competitors. The foreign merchants competed in new ways, perceived to be unfair by the existing merchants. Westerfield (1915), in his classic historical study of English retailing, reports that in the early eighteenth century, ‘The English merchant was not satisfied with the rate of profit which the Dutch Merchant made. The Dutch did a big business for a small profit, and the English preferred to do a smaller business at a large profit’ (p. 373). Three hundred years later, there are similar calls for protectionism and similar concerns about foreign retailers taking market share by seeking volume business. The foreign retailer often brings innovations into domestic markets. Throughout the more than 2000-year history of innovation diffusion in retailing there are references to foreign traders as agents in urban change and business evolution. These studies illustrate the importance of foreign entrepreneurs in introducing, not only new products, but also new managerial methods, into a variety of domestic markets. The European ventures into Africa in the nineteenth century introduced permanent market structures into traditional trading systems, bringing ideas of market administration and standardization of weights and measures. Such changes had considerable effect on the indigenous trading groups and their traditional practices. Alongside the attempts to modernize the administration of distribution there are also many examples of innovation in trading technologies. In more modern times, there are many examples of supermarkets being introduced into countries by foreign entrepreneurs. For example, Lawson (1971) pointed to Syrian and Lebanese traders introducing supermarkets into Ghana in the early 1950s. Wish and Harrison (1969) showed how American supermarket companies introduced the idea to Puerto Rico with a huge effect on local firms and the subsequent emergence of Puerto Rican owned supermarket groups. The transfer of Western formats into China in the present day (Goldman 2001) is only the latest in a long history of innovation diffusion by foreign retailers. Whether the foreign influence has been politically motivated or whether it is the result of a market response it was not unusual for there to be antagonism between the foreign entrepreneurs and the traditional methods of the local trading groups. The conflict that occurs as retail innovations are introduced by foreign agencies has a long and complex history and has been the subject of considerable study. Many of the studies of retail internationalization in the last twenty-five years have considered activities in Europe or North America. Relatively few have looked at the recent increasing amounts of retail internationalization in East Asia. The processes involved in retail internationalization are complex. Initially there is considerable fluidity as the firm gains understanding about the new market. The firm, in a second phase, then adjusts to the new conditions, consolidating its position, and in a third phase begins to try to exert control over vertical and horizontal channel relationships. When the retailer becomes established in the market, mature strategies seeking market domination, and similar to those used in the home country, are applied. Whilst this sequence of stabilization-consolidation-control-domination can be hypothesised to model the overall process, few firms pass through the complete model, deciding to withdraw from the market at some stage or failing to achieve their objectives. The international activities of retailers increased in scale and complexity during the last quarter of the twentieth century. This phenomenon is seen in all the major markets. Whilst in 1980, only 6 of the 20 largest retailers based in Europe operated stores outside their domestic market, by 2000 all but 1 of the top 20 had internationalized their store network. By 2000, it is estimated that 12.8 per cent of British retail sales were accounted for by foreign-based firms (Clark et al. 2001). Throughout Central Europe foreign retailers have expanded dramatically since 1989. ‘One of the consequences of the 50 years of communism is that the major retailers in these countries will be foreign owned’ (Dawson 2001a: 27) through the early decades of the twenty-first century. European based retailers have been particularly active in opening stores in other countries both within Europe and in other cultural regions. Some of the most international firms, for example Carrefour, Body Shop, Zara and IKEA, are operating shops in twenty or more countries, including several in Asia. Others, for example Ahold, Signet and Courts have more than 50 per cent of sales accounted for by non-domestic activity. Whilst the activity of the major European retailers has been substantial, North American retailers also have been active, although not to the same extent. Nonetheless, Wal-Mart, Gap, Claire’s, ToysRUs, and others have expanded into Europe and Asia whilst many others have opened stores in Canada and Mexico (Simmons and Kamikihara 1999). Despite the substantial increases in activity over the last twenty years few, if any, retailers yet can claim to have a global scope to their operations. McDonalds and Benetton are probably the closest to having a truly global coverage of outlets and to be managing what could be termed a global firm. Many of the strongly active international retailers, including Wal-Mart, Ahold and Metro generally are absent from Africa, India and have a very small presence in China, in respect of store operations. Major European retailers with a strong international orientation often are absent from North America or have had less than satisfactory experiences there (Muniz-Martinez 1998). A relatively small number of retailers based in USA have moved beyond Canada or Mexico (Sternquist 1997a). The coming decades presage an increase in international activity with European and American retailers expanding particularly into Asia and joining Asian retailers who are moving internationally within their own broad culture realm. Truly global retailers may emerge over the next decade as the large firms from Europe and USA expand their presence rapidly in East Asia and South America and move slowly into India and Africa. It is not only in shop operation that this internationalization process has been evident. Retailers have increased the scope of international activity in three main areas. First, there is the sale of products in other countries, usually through shops but also including export activity. Secondly, there is the sourcing from other countries of products for resale. Again there is a long history of such activity and the range of actions has increased in recent years. Thirdly, there is the internationalization of managerial ideas and managers, including internationalization of managerial activity amongst small independent traders. The internationalization of management in the small firm is widespread, for example, the Chinese Diaspora throughout Asia; East African and Pakistani traders in UK; Algerian shopkeepers in France; and the Koreans and Vietnamese in USA. This aspect of the internationalization of retailing know-how is often ignored in discussions of retail internationalization but has been a strong force in the sector with substantial impacts for many centuries. There are many countries where a substantial amount of small-scale retailing is operated by foreign retailers. The difference in these cases, from the more widely discussed internationalization of the late twentieth century, is that with the larger firms the head-office and ultimate control remains in the home country. Nonetheless, the creation of operating subsidiaries, with substantial executive independence, begins to blur the distinction between what is and what is not an international retailer even for these larger firms. Despite increased activity in all three areas, the internationalization process in retailing, as it affects medium- and large-sized firms, remains in its early stages. It has probably extended furthest in sourcing and in the transfer of managerial ideas where the history of international activity has been longest. With a few notable exceptions, the operation of shops internationally by large firms, other than as a token presence in another country, is a relatively new phenomenon associated with the globalization trends in economies. The pointers would suggest that this activity is likely to grow substantially over the next several decades. Increasing internationalization of shop operation is, therefore, for the future, a long-term process affecting the retail sector. The reasons for the surge in international activity of European retailers have been broadly established and these results can now be applied to forecasting developments in other culture realms. The reasons why particular markets are selected have also been identified and the potential attractiveness of markets for foreign retailer activity can now be established. The advantages and disadvantages of the different entry modes of retailers are also now better understood (Quinn 1998). There is still substantial empirical work to be undertaken outside the European region but the foundations for such empirical work have been laid. Conceptual and theoretical work remains to be developed on the empirically based answers to the questions of why, where and how but the general direction of research is clearly signed. Two major gaps in the research are consideration of when retail internationalization takes place and what the effects and impacts are on the domestic retail system of foreign retailer arrival in a country. There has been work on when moves take place in a temporal sense (Quinn 1999) but not in a conditional one. Relevant conditional factors may refer to the home country or the host country. Research on the ‘when’ and ‘what’ topics involves moving forward from decisions related to entry (why, where, how) to exploration of development and growth following entry. This involves moving from the study of events to the study of processes. Work in these general areas is starting with studies of what competencies within the firm are internationalized. Burt and Carralero-Encinas (2000) have studied the international transferability of retail image and Goldman (2001) has identified transferable components of a format. Gielen and Dekimpe (2001) explore the link between mode of entry and subsequent performance of the retailer. The effects of Wal-Mart have been the focus of several studies. Burt and Sparks (2001) point to some of the ways that Wal-Mart may make changes to operations in ASDA that they purchased in UK in 1997. Arnold et al. (1998) surveyed some of the impacts on consumers consequent on Wal-Mart’s entry into Canada. Mondragón (1997) analyzed the evolution of the Wal-Mart - CIFRA joint venture in Mexico. These studies are illustrative of this new phase of work, but are few compared with the work on entry. The development of a retailer in a foreign market involves adjustment to cultural and competitive conditions, a form of organizational learning associated with the management of intellectual capital, and issues of when and how fast development takes place. Moves by a retailer into another country mean the transfer of managerial knowledge relating to relationships with others in the demand (supply) demand. This can result in: • changes in the role of intermediaries in the chain, as happened with Carrefour’s development in Japan and with several major retailers in China (Au-Yeung 2002). New approaches to relationships with the various types of suppliers were introduced that have changed behaviors in the demand chain. Tesco’s use in Thailand of slotting allowances and the passing of transport costs to suppliers, considered standard practice in many countries but new in Thailand, provides a further example of this type of impact; • innovation in logistics as happens with Zara and Hennes & Mauritz when they expand in foreign markets and introduce their short product cycle and new inventory control procedures into established channels (Vitzthum 2001); • changes of trading terms (notably payment periods and discount structures) between retailers and suppliers as happened spectacularly with Promodès move into Greece; • starting new relationships with suppliers in the host country providing these suppliers with new access to the market, as seen in Tesco’s development of hypermarkets in Poland; • introducing new processes into demand chains, for example, new quality control and monitoring processes introduced by Ahold in its demand chain in Czech Republic and Slovakia; • supporting provision of services by other international firms, for example, West European retailers expanding their operations in Central Europe used the services of the international property agencies that also have sought to expand into these countries. These changes introduced or strengthened by foreign retailers have a demonstration effect in that domestic retailers follow the lead and adopt the innovatory practices. For example, when Promodès entered Greece and negotiated new types of contract relations with suppliers that reduced prices, extended payment periods and changed discount structures in favour of the retailer, domestic Greek retailers quickly followed the lead of Promodès and sought to renegotiate their own contracts with suppliers. The result has been that across the whole sector, channel relationships have changed following the catalyst provided by Promodès (Bourlakis et al. 1996). This demonstration effect is important in encouraging other changes in demand chain practices that diffuse through the body of domestic retailers. The establishment of a foreign retailer in the market has impacts on horizontal competitive processes and so has effects on the competitiveness of retailers already in the market. Examples of these types of effect are: • introduction and diffusion through the existing retail structure of new retail formats or retail formulae, as exemplified by ToysRUs in Japan, Wal-Mart in Mexico, B&Q in Taiwan, HMV in Japan, Sephora in Spain and many other examples. The impacts are those of the introduction of a disruption to existing structure by the arrival of a retail format or retail formula with new cost structures, enabling new methods of competition through lower prices, higher service levels, new product ranges, etc. The cost structures, at a particular time, may be affected by the scale economies achieved by the foreign retailer, at that time, but this is then due to the situational impact of a specific firm rather than the impact of a new format or formula; • introduction of improved information management methods that affect competitive success, for example, with the transfer of information systems from 7-Eleven Japan to the USA in their purchase of 7-Eleven USA (Sparks, 2000); • introduction of new marketing and merchandising methods using an existing format, for example, Aldi’s expansion from Germany to other countries involved the introduction of new merchandising and pricing concepts within the existing small supermarket format. The internationalization of Japanese department stores into the large cities in Asia and Europe also provide examples; • injection of new and additional investment into the sector often with expectation of higher than average sectoral profitability and productivity returns on investment and consequential sectoral restructuring. Metro’s substantial investment across several sectors in Poland with the development of hypermarkets, discount stores, DIY stores, electrical products stores and clothing stores had the effect of raising expectations of higher returns on investment across the whole retail sector. The impact therefore was to encourage a process of structural readjustment for the whole sector (Pütz 1997, 1998); • reductions in profitability of small local retailers facing competition from more strongly capitalized foreign retailers can result in failure of the smaller firms. There is strong anecdotal evidence for large foreign retail firms acting as triggers for the closure of small retailers operating close to the margin of profitability. There is, however, little rigorous empirical evidence of direct causal links between foreign retailer growth and reduced profitability of small firms. Existing retailers in the host markets have to make competitive responses to innovations from foreign retailers and the diffusion of these innovations. Horizontal competitive processes are therefore subjected to new forces brought by foreign retailers from outside the country. In order to remain competitive the existing domestic retailers have to respond to these new activities of foreign retailers. The development of the activity of foreign retailers often brings new products to the retail market and may well introduce consumers to new methods of selling. In these ways, levels of consumer literacy of retailer activity are increased by foreign retailer activity and the subsequent copying of this activity by domestic retailers. Examples of situations when this has occurred are: • the internationalization of a style that is the distinguishing character of some internationalizing retailers. Notable examples are Muji from Japan, IKEA from Sweden, Starbucks from USA and Laura Ashley from England, all of which have taken their design concepts into several foreign markets so bringing to consumers in the host country new design ideas in household goods, clothing and even coffee-drinking. The lifestyle brands of high fashion retailers provide other examples with consumers in host countries becoming aware of the distinctive styles and ranges of retailers such as Armani, Gucci and Escada (Laulajainen, 1992). Consumer literacy of fashion trends is extended by these retailers creating stores in the host countries; • extending consumer awareness and knowledge of products is exemplified by the activities of Sony. Sony has taken to many countries, in part through its Sony Centre store networks, sophisticated consumer technologies, widening and deepening the knowledge of consumers about such products. This is also an important aspect of the impact of Disney Stores and Warner Brothers Stores; • widening consumer horizons of retail methods may also be an impact of retailers developing internationally. The spread of supermarkets into Turkey, Carrefour’s development of hypermarkets in China, and Courts’ development of furniture stores in Caribbean countries are examples but many others are to be seen. Consumers become aware that some retailers are foreign retailers and so the consumers often have expectations that these retailers will present them with different products and different ideas. Consumer expectations of foreign retailers may be different from the expectations placed on foreign firms. Consumers in Japan expected Carrefour stores to be ‘French’ and were somewhat disappointed when this was not the case. Consumers become susceptible to new cultural influences, perceived in both positive and negative terms, brought into a market by foreign retailers. This is a long established concept. Itinerant retailers, many centuries ago, traveled around European countries taking with them new and different products from those available from domestic retailers. This is conceptually no different from the internationalization today of retailers such as Pier 1 and Body Shop that consciously introduce ‘exotic’ products to consumers in the host country. The growth of store operations in a foreign country as well as affecting conditions in the host country also has substantial impacts on the performance of the firm involved. The impacts on the firm take many forms: • impacts on profitability may be positive, as with the expansion into Spain and USA by Ahold, Wal-Mart into UK and Carrefour into Spain, or negative as with the experiences of Ahold in China and Wal-Mart, Carrefour, Sephora, and Marks and Spencer in Germany. Metro, over several years in the 1990s, showed a strong financial return from its investment in Poland that helped support a slowdown in profits from its domestic German operations. Signet has used the financial success of its foreign operation in USA to support the failures in its domestic operations in the UK. Trade hold, of South Africa, has used international expansion into UK, Australia and Poland, to sustain corporate profits that are under acute pressure in its domestic market in the late 1990s; • managerial knowledge or intellectual capital may be obtained in the foreign country and brought back to benefit domestic operations. Wal-Mart is using ideas about retail brands obtained from ASDA in UK to benefit their operations in USA. Ahold have taken knowledge from their operations in USA back to be applied in the Netherlands and also in their operations in other countries. Cees van der Hoeven, Chief Executive of Royal Ahold has explained that in respect of the acquisition by Ahold of Giant in May 1998 and Pathmark in March 1999, ‘We also see Giant-Landover giving Ahold a pool of talented retail professionals to populate other sister companies in the U. S. and abroad. That helps our globalization process’ (van der Hoeven 1999:78). The flow of ‘know-how’ within a firm, from the foreign operation to the domestic one is an important area of impact of international expansion of retailers; • increases in scale of operation and resultant scale economies, particularly of purchasing, are obtained for the firm as it expands its international chain(s) of stores. The basic rationale for retailers to move internationally is to increase the scale of their operations so clearly that there are impacts on the firm resulting from increased scale economies. Salto, as Deputy Operating officer of Promodès, claimed that the first reason for retail expansion in international markets was, ‘so that the retail group can be of a comparable size to its main rivals and not suffer from lack of economies of scale’ (Salto 1999:6). These scale economies impact on the cost structure of the firm. Van der Hoeven wrote in respect of the acquisition by Ahold of Giant and Pathmark in USA, ‘The economies of scale are yielding significant synergy effects in distribution and production, store operation and information technology. A major factor is the savings coming from synergies in buying and merchandising’ (van der Hoeven 1999:78). The expansion of Dixons from UK into Norway and Denmark has added to their scale of operation and has benefited their purchasing costs. The success of purchasing groups, for example, Intersport, depends on expansion into several countries to generate increasing purchase volumes for manufacturer branded items and for their own brand products. The same rationale lies behind the expansion of the store networks of limited range discount grocery firms. In these cases, because the international expansion increases the scale of the limited number of items being purchased, greater buying power is focused onto the suppliers of these products; • opportunities exist to use international expansion to support management development in the firm. IKEA, for example, uses its international store development network, to provide managers with a wide range of managerial experience in several countries; • the status associated with the development of a successful international chain and the stigma of failure can be significant impacts for the retail firm. The pressure on Fast Retailing to extend its success in Japan by moving internationally has been great and the status of the firm will increase if the chain being built, from 2001 onwards, in UK is successful. Conversely failure will reduce status. The stigma of the failure of Boots in Japan had repercussions, more widely, on the status of the firm. Impacts of internationalization on the retail firm are considerable. As the firm expands its international operation so both the beneficial and detrimental aspects increase in magnitude. Cost structures in the firm may change. Major mistakes in internationalization can have serious impacts for financial and capital performance of the firm. Examples are Yaohan’s attempts to develop a chain of department stores outside Japan (Carlile 1998) and the acquisition of store networks in Canada by Marks and Spencer and their attempts to build a European network of stores (Burt et al. 2002). Conclusion That industrialization, or more accurately modernization, in the retail distribution sector has lagged behind that of the manufacturing sector is well known. Certainly this lag was the position in past years. Retail companies in the Western economies that have gone through industrialization in both the manufacturing and retailing sectors have developed advanced retail technologies. These firms are expectedly taking the lead in the internationalization of retailing. Some major Japanese retailers at the end of the 1980s and beginning of the 1990s were in a similar position but are now no longer amongst the leading companies. As a result, current trends in retail internationalization show that European and North American retailers are the main players, moving strongly across national boundaries in the European and North American consumer realms. Research on international retailing has analyzed the state of internationalization and is characterised by Western researchers working with Western paradigms of business, focusing on Western retail firms, from the viewpoint of the why, where and how of internationalization. However, the reality of the retail internationalization on which these research studies were built, changed in the 1990s, and, particularly so, in the later half of that decade. There was a shift towards moving into the Asian market which had yet to experience ‘industrialization’ in the retail distribution sector. The Asian market became the battlefield for Western retail companies. However, although there has been a big shift in the target markets and in the activity of retailers, the research on retail internationalization has not fully taken this into account. In answering this question, first it is essential to know, ‘What are the histories and characteristics of the retail industries of Asian countries, and how are they changing?’ These histories and characteristics include not only ones of economic structure but also of distribution policy and distribution systems. Unfortunately, so far, we have to say that Western countries and Asian countries do not understand each other in these areas. Jirapar Tosomboon, for example, outlines the situation in Thailand where local capital is inviting international retailers into the market. Not only are the retail companies entering the market under their own volition but on the Thai side there are specific moves aimed at industrializing the retail sector using the abilities of foreign firms. Seong Mu Suh and Choi Sang Chul introduce the emergence of new forms of retailing in Korea where the local retailers are competing with Western companies such as Carrefour and Wal-Mart on an equal, if not higher, level. Furthermore, Hitoshi Tsuchiya investigates the various conflicts that arose between the local manufacturers and retailers when Carrefour moved into Taiwan. There is a greater need for us to know what phenomena are going to occur and be important in the future in each country. And once we know what is going on, we must come up with the answers to the questions of why international retailers in certain countries operate in specific ways and cause change, maybe conflict, through the channel. Among Western retailers there are those that have succeeded in moving into overseas markets and there are those who have failed. Why did some international retailers succeed? And what are the reasons for the failure of others? Although there are retailers who have aggressively internationalized and succeeded, it is not always the case that they have succeeded in every country. Why is it that the same retailers sometime succeed in some countries but in other situations fail? Is the reason due to the differences in the environment in the home country versus the environment in the host country? On this point, Roy Larke shows that the mode of entry into the foreign market by the retailer can affect the outcome, and Amelia Yuen Shan Au-Yeung puts forward a model for analyzing the behaviour of retailers in the host country whereby retail internationalization is treated as a process of technology transfer. This research shows that international retailers possess some form of strategic strength which other retailers do not have (such as an ability to choose their entry mode or an ability to transfer their retail technology to the host country) and that by using these advantages they can be successful, and that in cases where their strengths are not enough to overcome the differences in environments they can also fail. In research terms we need to clarify the strategic strengths held by international retailers and analyze what conditions are essential for their success. Internationalization is not the sole right of Western countries. We must not forget that it is possible for any retailer to internationalize their activity. At the present time, although it is not the centre of attention and although there are still few examples, there exist already local Asian retail companies that are moving into overseas markets. Taiwanese retailers are moving into China and several Hong Kong and Singapore specialty stores are opening stores in Asian markets. The internationalization processes of these Asian companies are likely to be different from those of Western companies. Whereas Western retailers have built up their own know-how and technologies for internationalization, Asian local retailers have learnt this from being subjected to foreign competition, and then have moved overseas using this gained knowledge. This process of technological transfer is something that is very worth researching as little research exists in this area. Up until now, Western researchers in retail distribution have hardly looked at Asia as a research topic. Analysis of the Asian retail market, however, is becoming an important research area for Western researchers, as international retailers target Asia. On the other hand, in the various Asian countries research on retail and distribution is still at a preliminary stage and there is a shortage of researchers. Nonetheless, Asian researchers are the ones who know the Asian market best. This has very important implications. That is, the driving force for advancing research on internationalization in retailing is the melding of knowledge between the three main players: Asian researchers, Western researchers and international retailers. Reference: Arnold, S. J., Handelman, J. and Tigert, D. J. (1998) ‘The impact of a market spoiler on consumer preferences (or what happens when Wal-Mart comes to town)’, Journal of Retailing and Consumer Services, 5: 1-13. Au-Yeung, A. Y. S. (2002) Foreign Direct Investment of Food Retailers: The Case of People’s Republic of China, PhD thesis, The University of Edinburgh. Bourlakis, C., Bourlakis, M. and Dawson, J. (1996) ‘The rise of retailer power in the Greek food retail sector 1988-1994’, Paper to CREER seminar on Channel Productivity: Efficiency in Retailing and Merchandising, Mons, October 1996. Burt, S. and Carralero-Encinas, J. (2000) ‘The role of store image in retail internationalization’, International Marketing Review, 17(4/5): 433-53. Burt, S. and Sparks, L. (2001) ‘The implications of Wal-Mart’s takeover of ASDA’, Environment and Planning, A33: 1463-89. Burt, S., Mellahi, K., Jackson, T. P. and Sparks, L. (2002) ‘Retail internationalization and retail failure: issues from the case of Marks and Spencer’, International Review of Retail, Distribution and Consumer Research, 12(2): 191-219. Carlile, L. E. (1998) ‘The Yaohan group’. In: MacPherson, K. L. (ed. ) Asian Department Stores, Richmond: Curzon, pp. 233-52. Clark, R., Grant, C. and Leech, P. (2001) International Retailers in the UK: The Future of UK Retailing, London: Emap. Dawson, J. A. (2001a) ‘Retail investment in central Europe and its implications’, Thexis, 18(3): 23-8. Gielen, K. and Dekimpe, M. G. (2001) ‘Do international entry decisions of retail chains matter in the long run?’, International Journal of Research in Marketing, 18(3): 235-59. Goldman, A. (2001) ‘The transfer of retail formats into developing economies: the example of China’, Journal of Retailing, 77(2): 221-42. Laulajainen, R. (1992) ‘Louis Vuitton Malletier: a truly global retailer’, Annals of the Japan Association of Economic Geography, 38(2): 55-77. Lawson, R. (1971) ‘The supply response of retail trading to urban population growth in Ghana’. In: C. Meillassoux (ed. ) The Development of Indigenous Trade and Markets in West Africa. London: Oxford University Press, pp. 377-98. Mondragón, C. (1997) Strategic Alliances in Mexico: The Case of Wal-Mart-CIFRA, PhD dissertation, University of Texas at Austin. Muniz-Martinez, N. (1998) ‘The internationalization of European retailers in America: the US experience’, International Journal of Retail and Distribution Management, 26(1): 29-37. Pütz, R. (1997) ‘New business formation, privatisation and internationalization. Aspects of the transformation of Polish retail trade’, Die Erde, 128: 235-49. Pütz, R. (1998) Einzelhandel im transformatioonsprozess. Passau: L. I. S. Quinn, B. (1998) ‘Towards a framework for the study of franchising as an operating mode for international retail companies’, International Review of Retail, Distribution and Consumer Research, 8(4): 445-67. Quinn, B. (1999) ‘The temporal context of UK retailers’ motives for international expansion’, Service Industries Journal, 19(2): 101-16. Salto, L. (1999) ‘Towards global retailing: the Promodès case’. In: Dupuis, M. and Dawson, J. (eds) European Cases in Retailing, Oxford: Blackwell, pp. 5-14. Simmons, J. and Kamikihara, S. (1999) ‘The internationalization of commercial activities in Canada’, Research Report, Centre for the Study of Commercial Activity, Ryerson Polytechnic University, Toronto, 1999: 7. Sparks, L. (2000) ‘Seven-Eleven Japan and the Southland Corporation: a marriage of convenience?’, International Marketing Review, 17(4/5): 401-15. Sternquist, B. (1997a) ‘International expansion of US retailers’, International Journal of Retail and Distribution Management, 25(8): 262-8. van der Hoeven, C. (1999) ‘Royal Ahold: a global strategy based on local independence’, International Trends in Retailing, 16(1): 73-80. Vitzthum, C. (2001) ‘Zara’s speed sells fashion’, Wall Street Journal Europe, May 11-12: 21-2. Westerfield, R. B. (1915) Middlemen in English Business. New Haven: Yale University Press. Reprinted edition 1968, New York: Augustus M Kelley. Wish, J. R. and Harrison, K. M. (1969) Marketing: One Answer to Poverty. University of Oregon Business Publication 3. Read More

Whether the foreign influence has been politically motivated or whether it is the result of a market response it was not unusual for there to be antagonism between the foreign entrepreneurs and the traditional methods of the local trading groups. The conflict that occurs as retail innovations are introduced by foreign agencies has a long and complex history and has been the subject of considerable study. Many of the studies of retail internationalization in the last twenty-five years have considered activities in Europe or North America.

Relatively few have looked at the recent increasing amounts of retail internationalization in East Asia. The processes involved in retail internationalization are complex. Initially there is considerable fluidity as the firm gains understanding about the new market. The firm, in a second phase, then adjusts to the new conditions, consolidating its position, and in a third phase begins to try to exert control over vertical and horizontal channel relationships. When the retailer becomes established in the market, mature strategies seeking market domination, and similar to those used in the home country, are applied.

Whilst this sequence of stabilization-consolidation-control-domination can be hypothesised to model the overall process, few firms pass through the complete model, deciding to withdraw from the market at some stage or failing to achieve their objectives. The international activities of retailers increased in scale and complexity during the last quarter of the twentieth century. This phenomenon is seen in all the major markets. Whilst in 1980, only 6 of the 20 largest retailers based in Europe operated stores outside their domestic market, by 2000 all but 1 of the top 20 had internationalized their store network.

By 2000, it is estimated that 12.8 per cent of British retail sales were accounted for by foreign-based firms (Clark et al. 2001). Throughout Central Europe foreign retailers have expanded dramatically since 1989. ‘One of the consequences of the 50 years of communism is that the major retailers in these countries will be foreign owned’ (Dawson 2001a: 27) through the early decades of the twenty-first century. European based retailers have been particularly active in opening stores in other countries both within Europe and in other cultural regions.

Some of the most international firms, for example Carrefour, Body Shop, Zara and IKEA, are operating shops in twenty or more countries, including several in Asia. Others, for example Ahold, Signet and Courts have more than 50 per cent of sales accounted for by non-domestic activity. Whilst the activity of the major European retailers has been substantial, North American retailers also have been active, although not to the same extent. Nonetheless, Wal-Mart, Gap, Claire’s, ToysRUs, and others have expanded into Europe and Asia whilst many others have opened stores in Canada and Mexico (Simmons and Kamikihara 1999).

Despite the substantial increases in activity over the last twenty years few, if any, retailers yet can claim to have a global scope to their operations. McDonalds and Benetton are probably the closest to having a truly global coverage of outlets and to be managing what could be termed a global firm. Many of the strongly active international retailers, including Wal-Mart, Ahold and Metro generally are absent from Africa, India and have a very small presence in China, in respect of store operations.

Major European retailers with a strong international orientation often are absent from North America or have had less than satisfactory experiences there (Muniz-Martinez 1998). A relatively small number of retailers based in USA have moved beyond Canada or Mexico (Sternquist 1997a). The coming decades presage an increase in international activity with European and American retailers expanding particularly into Asia and joining Asian retailers who are moving internationally within their own broad culture realm.

Truly global retailers may emerge over the next decade as the large firms from Europe and USA expand their presence rapidly in East Asia and South America and move slowly into India and Africa.

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(For An International Retailer Of Your Choice, Explain The Pattern Of Coursework Example | Topics and Well Written Essays - 4750 Words)
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“For An International Retailer Of Your Choice, Explain The Pattern Of Coursework Example | Topics and Well Written Essays - 4750 Words”. https://studentshare.org/politics/2042200-for-an-international-retailer-of-your-choice-explain-the-pattern-of-internationalization.
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