Developing strong international
retail strategy is important for organizations that desire sell products
overseas. In today’s world, emerging markets are often a main staple for
corporate processes. In the retail industry it is often the internal processes
that are as important as the right products in creating structure. The present
strength of the company, standardization of core processes, and focus on customer value that makes the
difference between those that will be successful in moving into international
markets and those that won’t.
Successful
international retail management relies on a number of internal factors that
ensure the organization is prepared to take on a wider distribution network with
its current structure. According to Vida, Fairhurst & Reardon (2000) these
internal characteristics include strategic management characteristics, retail
conception, logistics, and the size of the organization. The ability of
managers to determine and implement the retail strategy, the retail approaches,
logistical abilities, and the capital strength have an influence on whether or
not the organization will be successful.
Products
that are sold externally are not the main determinants of a successful
international retail business. Certainly, the right product helps but isn’t as
influential as the companies structure. The profitability of the organization
often relies on those internal structural functions that ensure that products
are being purchased/developed at a price conscious level and then moved through
efficient processes to display them to customers. It is these internal
structures that seem to make a large influence that separates the viability of
companies within the industry.
Standardization
creates higher levels of efficiency when moving and selling large quantities of
similar products. Successful organizations often use standardized core elements
(store design, locations, etc…) with adjustable peripheral elements (i.e.
assortments, promotions, offerings, etc…) (Swoboda & Elsner, 2013). Such a system allows for sequential and
logical adjustments of core structures in response to global market needs
without enduring higher expenses in variability and redundancy.
A
solid core system can also help to promote stronger distribution management.
The logistical market varies among nations and having a proper system can
reduce intensity of price competition, collaboration of suppliers, the
purchasing of bulk commodities, and the rate of adoption of improvements (i.e.
technology) (Fernie, 1995). The realizing of profits through an international
supply chain requires the ability to control costs and utilizing an efficient
system that can work in multiple economic environments.
Most companies seek to cost cut and
expand their markets as much as possible. How a company does this is important
for the attainment of goals. According to Abrahamsson & Rehme (2013) those
companies that focus more on customer value versus secondary goals in cost
cutting or market expansion are more likely to be successful. Even though the
goal is the same, the process may vary. It is the benefit of focus on those things
that further the fulfillment of customers’ needs.
Through
the development of strong strategy approaches with core processes that adjust
to the international market conditions organizations can develop additional retail
profits. Instead of simply cost cutting and bulk buying one’s way into
profitability it is also possible to focus on the more developed concept of
customer value. Each of the decisions and processes should end in a satisfied
customer that is willing to develop brand loyalty and long term relationships.
Abrahamsson, M. &
Rehme, J. (2010). The role of logistics retailers’ corporation strategy-a
driver for growth and customer value. Supply Chain Forum: International
Journal, 11 (4).
Fernie, J. (1995). International
comparisons of supply chain management in grocery retailing. Service Industries
Journal, 15 (4).
Swoboda & Elsner (2013). Transferring
the retail formal successfully into foreign countries. Journal of International
Marketing, 21 (1).
Vida, I., Fairhurst, A. &
Reardon, J. (2000). Determinants of international retail involvement: the case
of large U.S. retail chains. Journal of International Marketing, 8 (4).
