RETAIL MARKET STRATEGIES

Retail Market Strategies



Retail Market Strategies

Chapter 1 Introduction

Background of the study

International retailers frequently emphasise the cognitive aspects of the retail internationalisation process. Examples of this abound but include Tesco's utilisation of embedded research teams within Japanese families to monitor consumption behaviour prior to their acquisition of the Japanese C Two chain in 2003. Within the international retail literature, however, there has been limited detailed empirical or conceptual research on international retail learning (Clarke and Rimmer, 1997). Thus, although learning has played an important role in shaping the way retail companies behave in practice, comparatively few studies actually address international retail learning. An absence of detailed empirical or conceptual research on international retail learning is therefore a major gap in our understanding of the whole internationalisation process. It is contended that important insights and valuable lessons have been learned by retailers from their own successful international forays as well as the visible success of other companies in the international marketplace. Not all international retail operations have been successful however, and the difficult and highly contested process of scaling back of retailing operations to remedy mistakes may also result in an equally valuable learning process for international retailers (see Palmer 2000, 2002a, b).

Purpose of the study

A number of researchers have called for research to re-examine the ways in which retailer internationalisation has been conceptualised (Dawson, 2001; Howard and Dragun, 2002). The recent critiques of Wrigley (2000), Burt and Sparks (2001) and Burt et al. (2002) suggest that the existing conceptualisations neither adequately capture the multiplicity and difficulties in the retail internationalisation process, nor sufficiently explain the variety of approaches to internationalisation being used by retailers. Various explanations of the retail internationalisation process are emerging, but one viable and promising line of enquiry is the area of international retail learning. Notable in this respect is Clarke and Rimmer's (1997) analysis of Daimaru's (a Japanese department store) investment in a new outlet in Melbourne, Australia, which provided an initial step towards understanding the cognitive aspects of the international retail investment process. Indeed, this research has drawn a number of important lessons learned from retail market entry and development.

Problem statement

Despite the value of this initial research, and although the international retail learning process itself and the outcomes are occasionally referred to in the literature (see Treadgold, 1991; Alexander and Myers, 2000; Evans et al., 2000; Vida, 2000; Dawson, 2001; Arnold, 2002), its conceptualisation and analysis remains largely under-theorised and under-developed. What is required, according to Clarke and Rimmer (1997), is a research approach that explores “the way in which a retail firm reflects on individual decisions it has made, and how this might influence their perceptions and actions”. From this perspective, it is critical to understand international retail experiences through reflection and analysis, and to identify what has been learned from the internationalisation process. Furthermore, while some researchers in the field have indicated that experience is important for many aspects of market entry and development (Treadgold, 1991; Williams, 1991a, b; Evans et ...