Which Factors Determine Transnational Retailer Expansion and Performance?

Which factors determine transnational retailer expansion and performance?

The first one may be the labour standards. Christopherson and Lillie in 2005 said that two multinational retail firms, IKEA and Wal-Mart, illuminate the implication of a new era of labor standards-focused on transnational firm. It also emphasises home country influence in the construction of TNC adherence to labour standards. Comparing the different strateges used by Wal-Mart and IKEA, in conlusion, Wal-Mart’s focus on cost-reduction puts the implementation of labour standards far down list of priorities. However, as for IKEA, the systematic cost-reduction strategy remains at odds with the implementation of high labour standards in IKEA suppliers. And the final lesson is that for monitoring and enforcing standards, strong unions rather than consultancies are better placed.

According to the Durand and Wrigley (2009), there are three main factors may determine transnational retailer development and performance. The first factor is strategic decisions which is made about market entry (timing and mode) and subsequent development of subsidiary (organic growth or acquisition). It affects the ability of subsidiary to connect itself to social, political, and economic networks in the host economy/society and also the strength of indigenous competition depends. The second one is the transnational retailer’s ability to benefit from an upstream market power position. And the final factor is the sensitivity to unions and standards. Local labour standards in host markets may be more or less consistent with the way transnational retailers usually manage industrial relations systems in their home markets.

Compare and contrast the dominant theories explaining the workings of transnational production.

There are three theories explaining about the workings f transnational production. Porter and Millar’s analysis of the impact of the IT revolution on value chains and competitive...