Retailing

Transcript of RETAIL DOESN'T CROSS BOARDER'S

RETAIL DOESN'T CROSS BOARDER'S

The topic covered by the authors is the pressure to globalize, “why would a retailer want to go abroad”. The first reason why expanding sounds attractive would be the quest for scale and scope. In fact, globalization appears to be the only solution left when the retailer becomes too big for its home market. The pressure tends to accelerate retailers’ processes to go abroad and the opportunistic behaviour generally causes failure.

Many retailers decide to go abroad for the financial impact that may be provoked in order to meet their financial goals. However, the article provides a series of surprise findings, all going in the same direction. Retailers need to rethink their attitude because globalization only contributes in the long-term. In fact, that means the home stays critical to the retailer’s performance, no matter what the globalization strategy is.

Executive Summary

Executive Summary

Finally, four rules in order to get globalization right are given by the two authors. The first rule is about not forgetting that your home market is the engine of your company. Retailers tend to centralize all their actions in the foreign market, leaving their principal home market on the side. 

The second rule is originality. You have to bring something new to the foreign market. It is impossible to succeed in going abroad if you don’t offer some element of novelty compared to the already-implanted chains.

Third, it is important to keep in mind that differentiation is more important than synergies, no matter how big they are. Each market is organized differently and having one common solution and/or strategy for each one is impossible. 

Last but not the least, the timing rule. Timing is indeed critical if retailers want to succeed in globalization, it is all about being careful with the expansion so that consumers can prepare themselves for the concept.

Critique

The retail...