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18MBE11 - Retail
Management
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Unit 5 – International Retailing

Internationalization in Retailing 3

 Retail internationalization is the transfer of retail operations outside the home

market.

 It involves the international transfer of retail concepts, management skills,

technology and even the buying function.

 Two forces of attraction (Pull Strategy) and repulsion (Push strategy) have
propelled the internationalization of retail.
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 Domestic saturation and the high growth nature of emerging markets are the
biggest drivers of the internationalization of retail.

 Acquisition of supply chain infrastructure and local knowledge mean grocery

retailers are best suited to inorganic international growth.

 Vertically integrated retailers stand a much greater chance of success when

internationalising compared to multi-brand retailers.
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 High growth opportunities from luxury brand retailers will be geographically

different from the rest of the retail world.

 The shortage of international home improvement and gardening retailers proves

that some retail concepts are harder to export than others

 Despite the importance of internet retailing, real growth abroad requires stores
Motives of International retailing 6

 Growth and Profitability

 Economics of Scale
 Risk Diversification
 Uniqueness of Product or Services
 Spreading R& D costs
 Resources and Ideas
 Employees
International Retail Environment 7

 Political factors:
 a. How stable is the political environment in the prospective country?
 b. What are the local taxation policies? How do these affect your business?
 c. Is the government involved in trading agreements, such as the European Union
(EU), the North American Free Trade Agreement (NAFTA), or the Association of
Southeast Asian Nations (ASEAN)?
 d. What are the country‘s foreign-trade regulations?
 e. What are the country‘s social-welfare policies?
Economic factors: 8

 a. What are the current and forecast interest rates?

 b. What is the current level of inflation in the prospective country? What is it
forecast to be? How does this affect the possible growth of your market?
 c. What are local employment levels per capita, and how are they changing?
 d. What are the long-term prospects for the country‘s economy, gross domestic
product (GDP) per capita, and other economic factors?
 e. What are the current exchange rates between critical markets, and how will they
affect production and distribution of your goods?
Socio cultural factors: 9

 a. What are the local lifestyle trends?

 b. What are the country‘s current demographics, and how are they changing?
 c. What is the level and distribution of education and income?
 d. What are the dominant local religions, and what influence do they have on
consumer attitudes and opinions?
 e. What is the level of consumerism, and what are the popular attitudes toward it?
 f. What pending legislation could affect corporate social policies (e.g.,
domesticpartner benefits or maternity and paternity leave)?
Technological factors: 10

 a. To what level do the local government and industry FUND research, and are
those levels changing?
 b. What is the local governments and industry‘s level of interest and focus on
technology?
 c. How mature is the technology?
 d. What is the status of intellectual property issues in the local environment?
 e. Are potentially disruptive technologies in adjacent industries creeping in at the
edges of the focal industry?
Environmental factors: 11

 a. What are the local environmental issues?

 b. Are there any pending ecological or environmental issues relevant to your
industry?
 c. How do the activities of international activist groups (e.g., Greenpeace, Earth
First!, and People for the Ethical Treatment of Animals [PETA]) affect your
business?
 d. Are there environmental-protection laws?
 e. What are the regulations regarding waste disposal and energy consumption?
Legal factors: 12

 a. What are the local government‘s regulations regarding monopolies and private
property?
 b. Does intellectual property have legal protections?
 c. Are there relevant consumer laws?
 d. What is the status of employment, health and safety, and product safety laws?
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Thank you
dhivya.mba@Kongu.edu