INTERNATIONAL

RETAILING
PRESENTED BY
GROUP 8

WHY INTERNATIONAL RETAILING

International Retailing has been in existence and has

gained ground in the past two to three decades.

The economic boom in several countries, coupled with

globalization have given way to Organisations looking

at setting up retailing across borders.
The advent of internet and multimedia has further

changed the dimensions as far as International

Retailing is concerned.

WHO ARE INTERNATIONAL

RETAILERS
When you think of International Retailers the names

that come to ones mind would be the Wal-Mart,

Gucci, Ralph Lauren, Mango, GAP etc. All of these
are International Retailers. However, they can be
classified as ;
1. Global Grocery Retailer
2. International Fashion Brands

International Grocery Retailers

The Companies namely Wal-Mart, Carrefour,

Metro, Tesco and Ahold etc are the leading

international grocery retailers who have
multi country presence. Major portion of
their total revenue comes from foreign sales.
These international grocery retailers follow a

multi brand and multi product business

format.

International Fashion Retailing

Names

like Ralph Lauren, Gucci,

Zara,
Hugo
Boss,
JC
Penny,
Benetton, Jimmy Choo, Swarovski,
Dolce & Gabbana etc belong to the
second category of International
Fashion Retailers. Originally these
Companies catered to domestic
markets in the countries of their
origin.

Over the years, these companies have

realised the opportunity in expanding

their product mix and promoting
their brands internationally. Thus we
see the emergence of international
fashion brands, luxury product
brands.

INTERNATIONAL RETAIL AT A GLANCE

Factors Affecting International Retailing

Expansion of
Retail
Operations
To Foreign
Market.

Transfer
Of Retail
Concepts.

International
-ization Of
Management
Expertise

Employing
Advance
Technology.

Issues In International Retailing

Legislation
&
Regulation

Variations In
Retail Practices
(Sales people
And
Management

International
Retailing

Variations In
Retail
Practices
(Consumers
Perspective)

Taxation
& Cross
Border
Shopping

Process Of Internationalization
Licensing

A contractual agreement in which one firm provides access to some of its patents, trademarks, or technology to other firms
in exchange for fee or royalty.

Export via agent or distributor

Firm uses export as method for its surplus production and may have no long run commitment to the international market.

Export through own sales representative or sales subsidiary.

Firm sets a separate export department to manage sales and production, tailoring of product design as per export market.

Local Packaging and or Assembly

Involving in Host country Factor market, dealing with environmental variables such as cultural attitudes, wage rate,
workers expectations.

Foreign Direct Investment

Establishes production line in Host country with prescribed FDI norms.

Support Activities
Firms infrasctructure:

Close connection between headquarter and local stores.

Human resources:
- Based on Interaction practices between company and employees
-Low pay but other benefits (health care plans, retirement plans, or promotion opportunities)
-2.2 million associates globally.
-Every time they open a supercenter, they provide roughly 300 jobs
-Women57% of our U.S. workforce, 27% of corporate officers, and 20% of their Board of directors.

Techonology development: It is the key factor of the company. It constitutes a competitive

advantage against competitors.
- Computer-based technology
POS (Point of sales) system
Satellite System

Procurement:
-Wal-Mart deals directly with manufacturers, by passing all intermediaries.
- EDI : Electronic data interchange

MANUFACTURER WALMART - CUSTOMERS

Primary Activities
Inbound
Logistics

Operations

Outbound
Logistics

Marketing and
sales

Service

-VMI system

3 business
segments:

-Hub and spoke

distribution
system.

- Word of mouth
communication.

-accepting
returned goods

-focuses on everyday
low prices

-Satisfaction
guarantee

Save money, live

better

- Opening
hours(24/7)

(Vendor
managed
inventory)
continuous
replenishment
-EDI (Electronic
Data
Interchange

a)WalMart stores
Super centers
Discount
centers
Neighborhood
markets
b) SAMS Club
c)WalMart
international

- CROSS
DOCKING:
logistic technique
to make the
distribution
process more
efficient

-Sales are on a selfservice, cash-andcarry basis.

EXTERNAL
EXTERNAL
FACTORS
FACTORS

INTERNAL
INTERNAL
FACTORS
FACTORS

Helpful
Helpful
STRENGTHS

SW

Diversity in products & services

Convenient prices & locations
Strong market presence
Customer loyalty
Strong financial performance
Cost and pricing advantages over
rivals
Good supply chain

Global Expansion: new geographic

areas
Increasing online sales
Strategic alliances
Acquiring rival firms

OPPORTUNITIES

OT

Harmful
Harmful
WEAKNESSES
Brand image-weak
reputation
Low global presence
Behind rivals in ecommerce

Intense Competition
Laws and Regulations:
Trade policy
Cultural barriers
Current economy
Slow market growth
Transport of distinctive
comptency
THREATS

Forces favoring
Internationalization

Risk of Expansion

Satudrated domestic
market, U.S has only
4 percent of worlds
population.

Management Risk
-Culture, language,
customer
preferences,
distribution systems

Economies if scale.
Growth.
Revenue.

High Investment
Political and
Economic Risk
Exchange Rates Risk

INTERNATIONAL SUCCESS
CANADA

CHINA

Closer and emerging markets

Highly emerging and high population

Entered through the acquisition of Woolco,

weak player

New opening, JV, Acquisition

Many of these stores also have a garden

centre, a pharmacy, an Axess Law office, Tire
& Lube Express, optical centre, one-hour
photo processing lab, portrait studio, a bank
branch, a cell phone store and a fast food
outlet, usually McDonald's

To maintain its practice of EDLP, Wal-Mart

adopted a three pronged approach in China.
First, it focused on increasing local
procurement thus reducing procurement
costs. Second, it maintained satisfactory
supplier relationship during its initial years
Engaged in practices that discourage by paying suppliers within 3-7 days. Third, it
associates from exercising their right to join established modern commodity distribution
a union and negotiate a collective bargaining centers and computerized its management to
agreement.
improve efficiency and reduce cost...

In CHINA
Wal-Mart figured among the 15 most popular foreign

employers in China in a survey of university students

conducted by ChinaHR.com one of the leading online
recruitment websites in China.
Wal-Mart suppliers also underwent "standards training."
As per Wal-Mart standards, suppliers were not allowed
to have a work-week of more than 40 hours.
Wal-Mart also restricted overtime to three hours per day
and emphasized that safety requirements were met and
satisfactory accommodation was provided to the workers

STORE IN CANADAObserve the pharmacy

and McDonalds Store

STORE IN CHINA

International Failure
Germany
Walmart was not able to benefit from economies of scale.
Unable to become cost leader
Mode of entry in a very mature market
Culture differences
Low profitability market
Lost $1 Billion

International Failure
India

Political and legal barriers:

Foreign companies are not allowed to set up big stores unless

they sell only one brand.

South Korea

Very demanding customers

Did not customized to market
Big companies also fail in South Korea

THE END
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