Many barriers to entry Grocery retailing is a high fixed cost low margin business with returns that accrue only over time Walmart showing profitability in china in 2010 after 15 years of operation Foreign entrants often have o take on incumbents that operate exclusively in one country.

Two mistakes Perceive opportunities outside the home market to be larger, less constraining, and easier to tap into than those in the home base. Divert their attention from what’s happening at home. Walmart strong at home Carrefour losing market share and profitability at home

Aldi (Germany) “hard discounter” position extends across borders. Small stores, few SKUs, simply store layouts… 40% lower prices than super markets Jeronimo Martins (Portugal) Entered Poland via acquisition (cash-and- carry and small chain of hypermarkets) Sold stores to concentrate on Biedronka, which it runs independently as if it were a local Polish store concentrating on buying local.Biedronka

Economies of scale and scope often do not materialize Scope only works if retailer’s core competencies are relevant for a new market. Walmart struggled in Germany because price proposition didn’t stand out. Couldn’t use its logistics because of lack of scale. People policies wee out of tune with the unionized, high-wage German labor force When multinational retailers try to capture gains from global procurement, they often end up selling what they have bought instead of buying what they can sell

Carrefour failed in developed markets because shoppers weren’t ready for hypermarkets. Kroger and Target may be waiting too long Cash-and-carry retailers can enter a country early because they can serve mom-and-pop stores. Generally Hard discounters can enter early because there is a segment that likes the low prices. However if they go in too soon may lack reliable private-label suppliers.

Success Canada and Mexico Failure Germany and South Korea Not in Europe or Japan