Does the Global Village have Global Shops ? An Introduction to the Internationalisation of Retailing By Colin Clarke-Hill

Evolution towards Globalisation F International trade F The rise of the international company F The multinational company F The transnational company F The global company

Globalisation Debate F Space and time contracting - Global Village F Everywhere is becoming like everywhere else F Consumer convergence F Search for scale and cost advantages F Worldwide sourcing for production F Global production F Falling of trade barriers

Why Internationalise ? Basic Drivers for Internationalisation F “Pull” factors F “Push” factors F Convergence F The “global village”

Factors or Drivers Expalined F Push Factors - factors that force a firm to contemplate moving from their home market F Pull Factors - those factors that attract firms into international markets F Convergence - consumers having the same tastes and similar consumption patterns F Global Village - contraction of time and space The quest for Standardization

Standardization Push FactorsPull Factors Consumer Convergence Global Village

More Formally An International Growth Model

Push and Pull Factors Affecting International Growth International Growth Push Factors Motives Pull Factors Motives Saturated home market Limited growth Escape from inflation Increasing regulation Costs Competition in home market increasing Follow customer Internationalisation of industry Create international network Competitive drivers Market liberalisation Method of Growth Licensing Agents Franchising Joint development Acquisition New development Direction of Growth

Internationalisation and Retailing ? F The “cheap wine” analogy - does not travel well ! –can retailing formats transfer ? –can retail brands transfer ? –can retail competencies transfer ? –is there real convergence ? –are there global shops ?

A Walk Down the High Street F Food shopping –Tesco CZ/SV/Fr/HUN/POL –Sainsbury US/FR/IT/BEL –Asda Fr –Safeway FR/NL –Kwik Save HK –Aldi GER –Netto DK –Lidl GER –Budgens GER

Carry on walking ! F Clothing shops –Next GER/US/Fr –M&S CAN/US/JAP/Europe- all over –Sears GER/NL –C&A All Europe –Benetton all Europe/world –Littlewoods Russia –Gap USA/JAP etc.

still walking !! F “Hard goods” –Dixons US –Comet FR –Homebase BEL

How do Retailers Enter Overseas Markets ? F Various Entry Strategies F Different Speeds of Entry F Different Decisions Concerning Risk and Committment

Modes of Entry into Foreign Markets IndirectDirectLicensingJVDirect Investment Amount of Commitment Risk, Control and Profit Potential Source: Kotler P “Marketing Management” 6th Edition Low High

Now the slide show

Finally ? F Can we really compare ? –North America ? –Developed Europe ? –The “new” Europe ? F Is this really convergence ?

Any Questions ?

University Place !