FOREIGN DIRECT INVESTMENT – LOCATION ATTRACTIVENESS FOR RETAILING FIRMS IN THE EUROPEAN UNION1
Pervez N. Ghauri Manchester School of Management, UMIST United Kingdom Email:
[email protected] Ulf Elg Dep. of Business Administration, School of Economics and Mgmt, Lund University, Sweden Email:
[email protected] Rudolf R. Sinkovics Manchester School of Management, UMIST United Kingdom Email:
[email protected]
1
The authors would like to thank Handelsbanken’s Research Foundations for financial support.
FOREIGN DIRECT INVESTMENT – LOCATION ATTRACTIVENESS FOR RETAILING FIRMS IN THE EUROPEAN UNION Abstract For politicians and country representatives it is becoming more and more important to look into ways to attract Foreign Direct Investments (FDI). Not only are successful location decisions of multinational companies good news for surviving in the political system, but related economic and social development implications necessitate a more comprehensive view on whether there is a race to attract FDI in Europe. And if so, what are its implications on different industries and societies within the EU. This paper focuses on the retailing industry and mandates an understanding of managerial decision making: Why do retailing companies enter particular country markets and what are the factors that determine a country’s attractiveness? A conceptual model is developed to understand the factors, corporate as well as market characteristics, which influence companies in their location selection decisions. This will help us understand the impact of the incentives, if any, given by governments. We study two cases, Wal-Mart in the UK and Germany and Toys‘R’Us in Sweden to verify our model and to draw conclusions that can be useful for firms as well as policy makers in the EU.
-2-
Introduction Foreign direct investment and company’s location decisions in Europe have attracted much attention from competitors, consumers, academics and governments. Empirical evidence has been provided in the literature with particular attention given to manufacturing investments. The main thrust in the study of this “race for FDI” has been the relationship between competition and trade policy, regional development, employment generation and industrial regeneration (Oxelheim 1993). From an academic perspective it appears worthwhile to investigate in how far the increase in the importance of the service sector is also reflected in the attention it is given with respect to attracting service-FDI. We particularly look into retailing companies because during the last decade, retailing has rapidly become more and more internationalised and retailing firms are creating high levels of value-added by means of domestic job-creation and local purchasing. Successful retail expansion involves the development of a set of network contacts with different actors and interest groups on that market, as well as good relationships with suppliers and other business partners. Furthermore, a solid understanding of the market in terms of consumer demands, the competitors and their strengths and weaknesses, legal and political factors, etc. is required. American and European firms are leading actors in this development. Wal-Mart is by far the biggest retailer in the world. Their total retail sales were US$191 billion in the year 2000, compared to the second biggest company, French retailer Carrefour, with an annual sale of US$60 billion the same year. The twenty biggest retail companies in the year 2000 included ten American, nine European and one Japanese companies (Deloitte & Touche Tomasu 2002). In Europe, however, there is still a very strong dominance of European retailing companies. For instance, in the food sector Wal-Mart is the 14th biggest and the only non-European company among the twenty largest retailers. Wal-Mart, as well as other American retailers, are trying to invest in Europe, however, they have faced substantial difficulties on some of the national markets, further demonstrating that FDI in European retailing is challenging both for managers as well as host markets. From a theoretical perspective, there is a dearth of coherent conceptual and
-3-
theoretical frameworks that can help us to understand and to analyse these difficulties, country evaluation models or the location attractiveness for FDI in retailing. The market entry and establishment phase has been neglected, along with the networking aspects (Doherty 1999). Most internationalisation studies deal with manufacturers, some attention has been given to small and medium sized firms and to service firms (Buckley and Casson 1979; Coviello and Munro 1997; Ghauri and Kumar 1989). However, attempts to understand motives of retailers (Alexander 1990) and conceptualisations of the internationalisation process (Alexander and Myers 2000; Vida 2000) have not yet materialised in a framework for managing the complexities of retail internationalisation. When companies start operations in foreign markets they face greater uncertainty, as the environment is very dissimilar to the home market. These dissimilarities in the economic, political and legal environment, and the level of technology and culture, create obstacles to successful entry (Buckley and Ghauri 1999). This is especially problematic in retailing, because companies have to invest large sums from the start in building or taking over stores, in developing logistical systems and relationships to suppliers. These activities usually also make it necessary for retailers to interact with actors on a societal level, in acquiring permissions for land in order to build stores, making sure that there are appropriate road accesses and parking spaces for the store, public communications, import licenses and approvals for products from other countries that are to be featured in the stores. As indicated above, governments often provide substantial support for companies, motivated to direct FDI into disadvantaged regions or to foster sector development. Government incentives contribute significantly to the attractiveness of certain locations from a retailer’s perspective. Hence, it is interesting to integrate market characteristics such as location benefits from governments into a “location attractiveness” framework, above and beyond market characteristics issues such as size and infrastructure. We are also witnessing more and more networking due to an increasing importance of outsourcing and efficient purchasing. For instance, retailers such as, IKEA and H&M do not produce anything themselves. Instead, they rely on the most efficient manufactures. In all, since the building and management of relationships is such a critical factor, a matching approach is very relevant in order to understand FDI decisions, successes and failures of retailers. This view on internationalisation is, in
-4-
turn, very different from a traditional one (Axelsson and Johanson 1992). One key success factor in international retailing, which helps to critically enhance retail manager’s evaluation of a country markets´ location attractiveness, is the ability to understand consumers as well as competitors on these different host-markets. This makes the retailer's degree of market orientation (MO) likely to influence its performance on new markets (Jaworski and Kohli 1993; Narver and Slater 1990). A high degree of MO when entering a new market will increase the retailer’s ability to interpret the specific consumer needs and the cultural differences on that market and to develop corresponding retail concepts, to develop a competitive position versus the competitors on that market, etc. Critical factors for retailers during their process of internationalisation are, for example, to understand how a certain format has to be adapted in order to fit culturally different markets (Burt and Carralero-Encinas 2000), how to manage distributions and logistics and how to advertise and persuade consumers. Thus, there is a need for an approach that better recognises these specific challenges when retailers enter new markets. In this paper we therefore propose a framework for analyzing a retailer's foreign investment prospects based on its matching and relationship building, particularly with the local governments, and managing the infrastructure in the host market. This is done by integrating theoretical dimensions from matching, FDI and internationalisation process research.
Theoretical background The investigation of FDI location attractiveness for retailers points to different streams of research. Within this section we attempt to integrate the view of the export and FDI literature on internationalisation, with the networking and matching perspective to develop a comprehensive conceptual research model. The model, while preliminary in nature, serves as a framework and guidance for the discussion of two consecutive case studies. Therein, the model will be further illustrated. Wal-Mart’s and Toys‘R’Us’s attempts to enter European markets will be analysed. International expansion – The view of the export and FDI literature The discussion on firm’s success points to internal and external constraints on the growth of the firm. The firm’s growth has an underpinning in the underutilized resources approach (Penrose 1959) and the internationalisation approach (Buckley and Casson 1976; Buckley and Ghauri 1999; Johanson and Vahlne 1977).
-5-
The export and Foreign Direct Investment (FDI) literature treat foreign expansion of firms as part of a general view of increasing international commitment, with foreign direct investment as the final stage in the internationalisation process. The Economic theory of multinational enterprise incorporates international economics, theory of finance and location economies to explain growth of the firm (Buckley 1989; Dunning 1989). Many of these concepts are relevant to understand the internationalisation of retailing firms. However, much of the literature on FDI theories and internationalisation process deals with manufacturing firms. Lately, some attention has been given to explaining FDI of services firms. It is proposed that FDI in services is highly appropriate in cases where there is a high degree of interaction between service provider and consumer. Control over delivery is considered as a crucial issue, which is achievable through establishment of branches and mergers and acquisition (Buckley and Ghauri 2002; Buckley, Pass, and Prescott 1992). According to Stopford and Wells (1972) firms choose entry modes, which allow them maximum control over foreign activities. Moreover, control is related to the degree of resource commitment. In other words, high resource commitment will lead to a need for higher control and thus preference for foreign direct investment instead of contractual arrangement (Buckley and Ghauri 1999). According to the location theory firms locate their activities to higher degree in domestic markets, where the need for adaptation is greater; transport and tariff costs are high; there is availability of factors input and due to government restrictions (Dunning 1972). In the internationalisation of retailing firms these conditions fit very well and explain increased FDI by foreign firms into EU countries. Retailing operations require a higher level of market adaptation and domestic factor input. The higher cost of transport and tariffs, especially on agricultural products (between 6080%) are other factors that influence on FDI strategies of retailing firms. From a strategic perspective, the classic ‘resource seeking’ and ‘market seeking’ triggers of foreign direct investment have further been enriched by two emerging emotions to FDI. Companies are scanning globally for identifying resource alternatives and identifying market and technology trends. Furthermore, competitive positioning, e.g. to pre-empt competition from thriving in and through other markets or to develop positional strengths, is an argument which triggers investment-decisions at the managerial level (Bartlett and Ghoshal 2000). With retailing firms such as Wal-
-6-
Mart now even topping revenue league tables (Buckley 2003) the strategic dimension of moving into the most attractive international markets is becoming ever more important. From a country and policy-maker perspective the ‘race for FDI’ is henceforth becoming more competitive. Considering the market size of more than 450 million affluent consumer (in 2004), the European Union (EU) has become the most attractive single market in the world. Foreign companies, especially American and Japanese, are thus very active in mergers and acquisition activities in EU countries. The acquisition of Wertkauf in Germany and ASDA in the United Kingdom by Wal-Mart are just a few examples (Voyle 2003). While these non-EU companies are rushing into Europe, European countries are providing incentives to these foreign firms to attract the FDI in their particular market. A number of countries are offering considerable incentives. For example, the Netherlands has passed a 35% ruling, according to which, the local government would finance/reimburse 35% of the total investment made by a foreign firm into that market. Not only the part of the foreign investment but also the senior executives moving into the Netherlands will be exempted from personal income tax on 35% of their total income for a period of up to eight years. While bigger markets such as Germany and the UK are attracting a lot of FDI from the US and Japan, smaller countries are offering incentives and making extensive marketing efforts to attract FDI. The EU has also paid considerable efforts and attention towards attraction of FDI to relatively disadvantaged regions within the EU with a view of employment creation and industrial regeneration (Hood and Truijens 1993). Also, for a variety of reasons related to nationalism and anticompetitive policies, almost every such major effort and investment has been subject to criticism. Moving the focus towards the discussion of whether American FDI in retailing can be explained by the conventional investment theories mentioned above. For example, Kojima (1982) discussed Japanese investments in Europe and concluded that earlier Japanese investments did not replace but complemented international trade. However, Kojima indicated that most investments between developed countries were to overcome trade barriers. In terms of American investments in the EU, in our
-7-
opinion, this has been a factor in addition to need for adaptation, local content rules and local inputs other than these incentives. Companies are being influenced by other strategic factors while choosing a location for FDI. The location decisions process of foreign firms has been studied by several authors. Hood and Truijens (1993) studied the location decision-making process of Japanese firms. The process was studied from a companies´ perspective as well as from the perspective of regional economic development agencies. They concluded that selection of location for FDI depended upon factors such as; language, viability and costs of manpower, and welcoming and supportive attitude of the government agencies. As a result, the UK and Germany turned out to be the most attractive countries (see table 1).
Table 1: Country Evaluation Aspect
UK
Labour availability 8 Wage level 9 Labor Unions 8 Supporting Industries 9 10 Support of Development Agency 6 Investment Incentives Language 10 Feelings against Japanese 8 Presence of other Japanese 8 manufactures Total score 76 Source: Hood and Truijens (1993, p. 55)
GERMANY
FRANCE
7 6 8 8 7 9 7 7 7
7 8 8 6 4 8 4 3 4
NETHERLANDS 7 6 8 7 7 8 8 7 4
66
52
62
It is interesting, that the investment attraction strategy of UK and other EU countries seem to influence the investment decisions of American and Japanese firms. Internationalisation and foreign market entry – A retailing perspective Several studies present factors important for foreign market entry (Cateora and Ghauri 2000; Ghauri and Holstius 1996; Root 1994). These models generally look at internal and external aspects about the firm and its market, then providing tools to screen a market for its suitability for a specific product. They are quite useful for traditional manufacturing firms and can also provide a more general basis, but are not enough in analysing the service and networking firms that retailers represent. More over, this study cannot help us understand the impact of government incentives on the -8-
decision making process for entry strategies of firms. We have therefore, looked at different theoretical areas in search of a more suitable model. Just a few decades ago retailing was a domestic industry dominated by relatively small firms. Early attempts of internationalisation did not have much success (Hollander 1997). Although retailing concepts such as super markets, department stores and hyper markets spread internationally, most often it was transfer of know how and not the internationalisation of retailing firms that took place (Kacker 1985; Pellegrini 1999). Most studies available on international retailing also deal with histories and activities of single firms, retail sectors, store formats and transfer of retail concepts from one environment to another (Burt 1993; Hamill and Crosbie 1990; Sternquist 1997; Treadgold and Davies 1988). Several authors have pointed out the lack of a comprehensive approach for the internationalisation and of retailing firms (Alexander and Myers 2000; Brown and Burt 1992; Dawson 1994; Helfferich, Hinfelaar, and Kasper 1997; Hollander 2000; Pellegrini 1994). We also argue that research in international retailing would benefit especially from incorporating a matching view on this process. When entering into new markets, retailers have to develop a supportive network that includes relationships to business partners, e.g. suppliers and transporters, as well as to various decision makers in government and semi-government organisations. We thus have the ambition to develop a more detailed understanding on matching activities, including with local governments while entering a market, particularly in EU. The research therefore strives to integrate these constructs and the specific attributes of international retailing (Alexander 1997; McGoldrick 2002). Networking and the role of ‘matching’ Studies undertaken under the network approach (Blankenberg and Johanson 1992; Ford 1998; Johanson and Mattson 1988) have presented a model with three main elements; actors, resources and activities. These three factors interact with each other and help a firm to enter and establish a position in a new market. A number of studies have reported that long lasting relationships between different actors in a market have been the main marketing and competitive tools (Arndt 1979; Ghauri 1999). Furthermore, a discussion on relationships can be carried out in three steps (Anderson, Hakansson, and Johanson 1994): The first refers to the function of the relationship from the perspective of the parties involved. The second to the fact that
-9-
parties involved in one particular relationship may also be involved in other relationships and their counterparts in these other relationships may also be involved in the particular relationship. The third step explains how, based on the above, a particular market setting has a structure and how business units (actors) within this structure have a web of relationships with each other. We argue that a retailer needs to develop and extend this web of relationships for each new market entry. Matching is a concept that further increases the understanding of how successful business networks can be facilitated, by means of establishing relationships with the right type of actors at different levels and appropriate adaptations of objectives and resources in dissimilar markets (Ghauri and Holstius 1996). Whereas adaptation in the network approach is related to the company and personal relationship level (Hallén, Johanson, and Seyed-Mohamed 1991), the matching concept goes beyond that and refers also to facilitating contacts, resources and actions provided by governments, international organizations and other third parties. At a global level, matching includes international, multilateral, agreements, communications and relations. Actions taken by World Bank and European Bank of Reconstruction and Development (EBRD) for financial matching or providing soft loans are typical examples of global level matching. At the macro level, it refers to bilateral agreements between the governments to facilitate business relationships between firms. These activities can be more or less initiated by local governments and/or by companies. They can concern, for instance, financial matters such as soft loans, export credit and guarantees, and legislative matters aiming to avoid double taxation or to protect investments. Investment incentives and the improvement of legislation to create favourable conditions for doing business in the country are other examples. Matching at the micro level refers to the steps to be taken by the firm in order to get a successful market entry and to create a competitive advantage on the market. This includes establishing business relationships with different partners, with local actors and including the local government in a network of relationships.. Matching at the macro and micro level especially supports the company in building relationships with different actors – including companies as well as government and other stakeholders. Without this or without the development of mutual trust and relationship at the individual level through reciprocal visits a firm cannot have a successful entry into a foreign market (Cavusgil, Ghauri, and Agarwal
- 10 -
2002; Ghauri 1999; Holstius 1990). The benefit of the matching perspective is that it allows us to look at any level of a retailer’s entry process in order to explain its success or failure. ‘FDI-Location Attractiveness’ model for retailing companies The attempt to integrate the view of the export and FDI literature on internationalisation with the networking and matching perspective helped us to develop a comprehensive conceptual research model (see Figure 1). The model comprises of two levels of perspectives, corporate and host market-perspectives, which ultimately drive FDI location attractiveness. The FDI location attractiveness dimension is seen as a perceptional measure of executive retail managers in their decision making process. In the following section the model will be further illustrated and its dimensions will be explained. What follows is an analysis of two cases using Wal-Mart’s and Toys ‘R’ Us’s attempts to enter European market to verify the applicability of our model.
Figure 1: Conceptual Model Host Market
Corporate Matching of actors, activities, resources • Global Level
Matching of actors, activities, resources • Macro Level • Micro Level FDI Location Attractiveness
Firm Characteristics • Commitment to host market • Entrepreneurial Proclivity
Market Characteristics • Size • Infrastructure • Locational Incentives
As outlined, the conceptual model separates aspects on a more general, corporate level, from aspects that concern a specific host market. Our general view is that global matching activities are likely to be carried out mostly on a corporate level. These are likely to generate resources and relationships that support a retailer’s positioning on
- 11 -
the host market. As stressed above, it is important to study MO activities as well as matching activities directed at each host market. Otherwise it will not be possible to analyse how the company adapts to the different characteristics of that particular market. In the section above, the matching concept has been discussed in some detail. However, to illustrate factors determining FDI location attractiveness even further, firm characteristics and market characteristics will be explored. Matching of actors, activities and resources As outlined in the theoretical discussion above, matching is meant to serve as a key concept for understanding how the development of successful business relationships can be facilitated in dissimilar markets (Ghauri and Holstius 1996). The matching concept refers to facilitating contacts, resources and actions provided by governments, international organizations and other third parties. It is thus seen as consisting of all the steps taken at global, macro and micro levels to facilitate the expansion of retailers into foreign markets. Following Ghauri and Holstius (1996), matching will consequently determine the attractiveness of future FDI locations, prior to market entry in the new territory. Firm characteristics A number of studies have highlighted antecedents on a company level that influence its level of international activities. These are included in our model along with a few additional dimensions which are considered especially relevant when applying a network and matching perspective. Commitment to host market: Commitment has been used as an important aspect of success in the internationalisation and channel area (Anderson and Weitz 1992; Petersen and Pedersen 1999). In view of accelerating levels of competitive intensity, internationalisation processes of retailers involve both high levels of resource commitment (Johanson and Vahlne 1977; Petersen and Pedersen 1999) and relationship commitment (Gundlach, Achrol, and Mentzer 1995). The pace by which retailing companies commit resources to foreign markets, is expected to differ significantly from that of other internationalising industries but also with respect to experience with foreign markets, company size and other factors (Pedersen and Petersen 1998; Petersen and Pedersen 1999). The international business literature has generally reconciled towards the perspective that the devotion of resources to foreign - 12 -
markets is not simply a ‘one-off operation’ but an issue of gradual and incremental increase in commitment. Increasing commitment can also be explained as a process of accumulating foreign market knowledge (Autio, Sapienza, and Almeida 2000; Barkema, Bell, and Pennings 1996; Eriksson et al. 1997; Johanson and Vahlne 1977; Johanson and Wiedersheim-Paul 1975). The more a company is committed to a host market, the higher the level of relationship commitment (O'Reilly and Chatman 1986) and Sabel 1993). Hence, the retailers will demonstrate higher willingness to pursue long-term goals (Macneil 1980) and collaborate with upstream and downstream partners in a trust-based relationship. Entrepreneurial proclivity: Entrepreneurial traits and motives of entrepreneurs are important when considering foreign market-entry decisions. Not only was entrepreneurship originally studied as a market entry problem: “What business shall we enter?” (Miles and Snow 1978) but the more recent conceptual domain of entrepreneurship involves entrepreneurial management processes, methods and practices which managers use to act entrepreneurially (Lumpkin and Dess 1996). While individual manager’s entrepreneurial traits can be important, micro-level policies and strategies of the ventures can have an even more immediate effect on organisational performance and may be easier to learn than to imitate the personality traits and motives of outstanding entrepreneurs (Manimala 1999). Entrepreneurial traits are therefore integrated in the model. These are leveraged at the organisational level and potentially impact on the way retailing companies internationalise. Following
Matsuno,
Mentzer
and
Özsomer’s
(2002)
conceptualisation
of
entrepreneurial proclivity, innovative, risk taking and proactive retailers will view and rank potential markets differently with respect to FDI location attractiveness. Market Characteristics Size, Infrastructure: For purposes of international market selection and assessment of FDI location attractiveness, target market size, next to growth and competition is one of the most important dimensions (Jeannet and Hennessey 1998). In a multi-stage evaluation process for FDI, retailers may use scoring models or country portfolios (Schneider 1985) as methods of assessment of FDI location attractiveness. Infrastructure is also seen as important dimension of market characteristics, which will impact on the FDI location attractiveness. The retailing
- 13 -
firm’s channel strategy in an international marketing programme must fit the company’s competitive position and overall objectives in each national market. When going into a new market Wal-Mart for instance enters with enough mass to use their core competences (Buckley 2003). Whether retailers are able to build on their competences and manage to capitalise on them in other countries is largely a function of market infrastructure in the respective target country. Further to that, infrastructure is also seen as element which will determine the levels and degrees of macro and micro-level matching within the target countries. Locational Incentives: Governments are competing against each other, particularly in EU, over the issue of attracting FDI in their home-countries. Subsidies, soft-loans from the local government, tax-cuts or direct grants are examples of direct benefits to the retailing companies. These benefits will often be a function of successful matching activities, however, can also impact positively on companies competence to match more effectively on the macro or micro-level. Furthermore locational incentives will help to consider certain locations more attractive for FDI than others.
Two cases on FDI into EU - Toys‘R’Us and Wal-Mart in Europe In an attempt to illustrate our thinking on FDI in retailing and to exemplify the conceptual model outlined before, we will present two case studies. Below, we discuss the entry of Toys‘R’Us and Wal-Mart in specific European markets. For Toys‘R’Us we focus on its difficulties on the Swedish market, but will also refer to activities on other international markets. The discussion of Wal-Mart is based mostly on its entry in the UK and Germany. The purpose is to illustrate the model presented above and to point out the specific challenges for foreign companies that invest in EU countries. The empirical part is based on secondary data. The discussion on Toys‘R’Us is based on Altstadt (2001) and (Kotabe and Helsen 2000) together with a large number of reports from Swedish daily newspapers, magazines and journals. The information about Wal-Mart’s activities in Europe is based on Arnold (1999), Arnold and Fernie (2000), Fernie and Arnold (2002), Itabor (2002) and on newspaper reports and internal ASDA (a Wal-Mart Co. in UK), material.
- 14 -
Significant firm characteristics Both Toys‘R’Us and Wal-Mart are usually characterised as having a very customer oriented organizational culture, in the sense that the employees are encouraged always to put the customer in focus, to look upon the customer as king, etc. At the same time, this culture appears to be very close to the “American” way of looking at customers and employees. It is also implemented in and standardized way that may be more suitable for US that for Europe. For instance, Wal-Mart employees have a morning cheer that greets customer as the king that works well in the US but is far from the kind of company culture that is considered normal in many European countries. Wal-Mart has also used the strategy of putting Americans on the top positions within the acquired companies on the German markets, which may be one explanation to why it failed to understand the specific characteristics of that market. An example from Toys‘R’Us is that the handbook that is handed out to every employee has usually just been translated to the native language when entering a foreign market. In Sweden, an external law firm was given the assignment to simply translate the book into Swedish without any further considerations about Swedish working life. Toys‘R’Us’s lack of flexibility and interest in local conditions also made it more difficult to succeed in macro level matching with politicians, local government and union representatives. The low level of understanding of the conditions specific to the different new markets can also be regarded as a sign of a limited commitment to the host markets. This may also explain why both retailers have been more successful on the UK market that is more similar to the US, while Wal-Mart had substantial difficulties in Germany, and Toys‘ R’Us has struggled in Sweden and the Netherlands. Both firms also have cost efficiency and low prices as a significant part of their strategies. In order to accomplish this they work with standardized low cost solutions in relationships with manufacturers and other partners. These solutions have also been more or less replicated when entering the European markets. Wal-Mart and Toys‘R’Us appear to base their relationships to different stakeholders more on the power that their market size gives them than on long term trust building, and none of the firms appear to have the kind of matching and networking competencies that other retailers, such as IKEA, use while entering foreign markets (Larsson et al. 2003).
- 15 -
Matching on different levels There is little evidence that any of the retailers have spent much effort on global level matching in order to facilitate the entry to the specific foreign market. Instead, they rely on their own internal competences and resources, and the size and impact that they expect to have on any new foreign market. For instance, Wal-Mart is probably big enough to manage without any financial matching on a global, or macro level. The lack of interest in global level matching may, however, also explain some of the difficulties that the firms have had in Europe. Matching may have helped the companies to understand the conditions in different European countries and the regulatory frameworks concerning consumer marketing as well as the employee relationships that exists in the EU. For example, in the 1990s an EU directive was developed stating that all multinational companies should have a sectoral advisory committee (koncernfackligt råd) for labour issues installed at the corporate level. This also emphasises the fact that labour unions have the possibility of global and international networking, an aspect neglected by Toys‘R’Us when deciding to go into conflict with the Swedish labour union (see further discussion below). As a result of the conflict between Toys‘R’Us and the Swedish labour union, labour unions took global initiatives to co-ordinate efforts and to put pressure on Toys‘R’Us. A worldwide campaign was started in order to organise labour within Toys‘R’Us and to improve the employee conditions. Macro level matching refers to activities on an overall level within a certain market. In spite of the aspiration within the EU to develop a common legal and structural framework, retailers are still very dependent on the conditions of the individual markets that they want to enter. It is rarely possible to apply a single strategy for the European market. The legal part is one important aspect here. Most European countries have different laws and regulations relevant to retailers that concern social issues as well as external shopping centres, allowed shopping hours, etc. To begin with, the restrictive German rules concerning opening hours made it difficult for both these retailers to fully implement their strategies. Wal-Mart faced additional difficulties due to the strict German rules concerning city planning and social issues. These problems could have been anticipated at an earlier stage if the retailer had built a stronger macro-level network in Germany. As retailing involves establishing stores on different local markets, relationships
- 16 -
to local authorities is also very important. In Sweden, for instance, the local government and the locally developed plans for where retailing is to be allowed, the allowed size for store units, etc., can be a non-negotiable restriction. Domestic retailers have adapted to this and often have well developed macro level network relationships. Toys‘R’Us appeared not to be able to build such relationships, either at the local or national level. If the firm had done so it may have had better initial knowledge about the labour market conditions. In fact, Toys‘R’Us’s initial attempt to enter the Swedish market more or less collapsed due to an insufficient understanding of the political conditions. At an early stage, Toys‘R’Us decided to implement their American rules for employees and employee relationships. This meant that the company encouraged their employees not to join labour unions, refused to sign any general agreements with labour unions concerning salaries, working conditions, etc. It also meant that the company tried to implement regulations concerning working hours for employees that were less favourable than the norms of the country. There were massive protests from the labour unions but Toys‘R’Us persisted in following the American policies. In doing so, the retailer obviously underestimated the power of the labour union and the workers’ determination, as well as the differences in culture between Sweden and the US. It also failed to understand that relationships with unions are closely related to other macro level relationships with government authorities, politicians, media, etc. Initially, the labour union for retail employees started a strike at the Toys‘R’Us stores. As the conflict escalated other sectors and labour unions were also mobilised in sympathy. For example, labour unions managed to stop Toys‘R’Us’s advertisements in the press while the workers had a big advertising campaign, the transport workers stopped any deliveries to Toys‘R’Us’s stores and refused to handle shipments of products from Toys‘R’Us’s central European warehouses in the UK, employees in local banks refused to handle transactions involving Toys‘R’Us money, etc. Additionally, the Swedish blue and white-collar labour unions encouraged all their 2,5 million members not to shop at Toys‘R’Us. Toys‘R’Us more or less refused to talk to the media during the conflict. This was a central company policy that further undermined the firm’s position. In all, the conflict with the labour unions had considerable negative consequences on financial and market performance as well as on public image and customer relationships in Sweden. After almost 6 months
- 17 -
Toys‘R’Us had to give up and sign an agreement that was adapted to Swedish labour market conditions. By then, however, relationships to employees, customers and other stakeholders were severely damaged. Toys‘R’Us had a bad image as an actor on the Swedish market, a weak net of relationships to strategic actors and activities and no matching efforts. The firm tried to address this problem by an aggressive marketing campaign, but it did not turn out very well. Finally, the problem was solved by forming an alliance with the Danish company Top Toy, that already had an efficient distribution network, a good knowledge on the Scandinavian market, higher credibility among employees and good relationship with government. Top toy was given the right to operate the Toys‘R’Us stores in Sweden on a franchise basis. Matching at micro level refers to activities that create an efficient business network on the market. It emphasises relationships to partners such as suppliers and middlemen. This is another area that stresses that the European market consists of a number of national markets with very different characteristics concerning critical resources, how activities are organized in the networks and what actors that are responsible for them. At least for a start, both retailers appeared to pay very little respect to national differences. This caused several conflicts. For instance, both companies had problems with the German market. Wal-Mart tried to implement its US strategy concerning logistics and centralised distribution. Suppliers were thus asked to deliver to distribution centres instead of directly to the stores. This worked out well in the UK, but it was very different from the German system that was based on direct store deliveries. German national suppliers would not and could not adapt to the new system introduced by Wal-Mart. This made deliveries fail to arrive on time and out-of-stock rates increase to up to 20 per cent. Again, it appears that Wal-Mart tried to base relationships to local actors more on power and size than on mutual adaptations and trust. In Germany this failed partly because Wal-Mart did not have the size required for such an approach. Toys‘R’Us also had problems with their supplier relationships in Germany. The warehouse and low price approach was regarded negatively by German manufacturers. The latter even started a propaganda campaign that stated that Toys‘R’Us would threaten consumer safety and the quality of the toys offered. In this case, however, problems were overcome as Toys‘R’Us grew and became more and more profitable.
- 18 -
Infrastructure related activities Wal-Mart’s ambition when entering a new market is to learn more about the customers and to introduce the concept and philosophy. One important part of the Wal-Mart strategy in order to achieve this is to acquire companies that can be shaped the Wal-Mart way. In UK this was realized through the take over of the third biggest supermarket retailer ASDA. This turned out to be a very good match because ASDA had a strategic approach similar to Wal-Mart, including well developed systems for information, distribution and logistics and a management philosophy and an organizational culture that corresponded well with Wal-Mart. This also meant that the retailer could build upon the processes for generating and disseminating market data that already existed within ASDA. ASDA already had a strong programme for collecting and disseminating market data within the organization. This could be used by Wal-Mart in order to get to know the market and become established in the UK. In Germany, Wal-Mart bought the supermarket chains Wertkauf and Interspar. These acquisitions appear to have been less successful, because the companies acquired by Wal-Mart were not very successful and demonstrated lack of market orientation; being weak at providing customer value, having poor internal information systems, etc. The acquisitions thus could not give Wal-Mart much back up in understanding and adapting to the German market. The strategy of both companies for Europe has also been to replicate the success formula for the US market, and then to learn from competition and from the companies own experiences on the host markets. This has, however, meant a low level of MO at an initial stage, and making mistakes that might have been avoided by using a more collaborative strategy. For instance, the UK customers did not feel familiar with Toys‘R’Us’s initial “warehouse approach” and low service level. The firm therefore had to rebuild the units into a number of smaller shops/departments within the store that were to appeal to different segments and needs. In Sweden, the lack of understanding of the role of labour unions was the most crucial mistake, perhaps along with the initial rejection of Top Toy’s alliance proposal. Top-Toy contacted Toys‘R’Us in the early 1990s and suggested that the companies should form an alliance for the Scandinavian market, but Toys‘R’Us refused turned down the offer because it regarded itself as much stronger that the Danish potential competitor. However, Toys‘R’Us failed to grasp the key success
- 19 -
factors on the Scandinavian market and the strength of the competitors there, and did not see that the Danish competitor had a number of substantial strategic advantages. In fact, as Toys‘R’Us turned down the alliance offer Top-Toy concentrated on building a chain of large toy stores in Sweden that were to attract the same customer segments as Toys‘R’Us. This made Top-Toy well prepared to face the new competitor, and also meant that the margins for toys could not be squeezed to the same extent as in the UK and Germany. Also, the Danish competitor had at least to some extent already transferred the market into being an all year round instead of just for holidays, another part of Toys‘R’Us’s success formula. Obviously, Toys‘R’Us did not generate enough market intelligence to understand these differences. In fact, it is far from certain that Toys‘R’Us would have succeeded even if the labour market conflict had not occurred. Toys‘R’Us appear to have had a lower degree of MO in Sweden that Top Toy. For instance, communication among employees was discouraged as the handbook for employees prohibited any “small talk” during working time. This had a negative influence on intelligence dissemination as well as on the staff’s responsiveness to the customers. Top Toy, on the other hand, had welldeveloped systems for internal communication and intelligence dissemination between stores and employees at different levels, formal and informal routines for discussing MO activities and market trends, a more decentralised management style, etc. When Wal-Mart bought ASDA in the UK, it thus acquired a company that already had strong internal information system, a market oriented approach and a discount oriented strategy that fitted Wal-Mart’s intentions well. To this Wal-Mart added its original customer oriented policies and organizational culture, and its competencies regarding how to improve retail efficiency. Here, Wal-Mart uses a number of forms of intelligence generation, including leaflet drops, postal surveys, competitor intelligence, customer listening groups, mystery shoppers, etc. Intelligence dissemination takes place through quarterly meetings between managers and employees, an intranet system, employee notice boards, open discussions concerning customer feed back, etc. This has also enabled stores to respond to local customer needs in a systematic way. In all, Wal-Mart’s entry to the UK market can be regarded as successful by many standards. ASDA has been voted as the best value supermarket in Britain by Grocer 33, and its business performance is constantly improving in terms
- 20 -
of sales and profitability (Itabor 2002). Wal-Mart/ASDA is currently approaching Sainsbury’s position as number two on the UK grocery market. Challenging UK’s top food retailer Tesco still appears to be too difficult a tack, and Wal-Mart/ASDA’s impact on the non-food market has been rather limited. One reason may be that WalMart overestimated the price sensitivity of British consumers (Fernie and Arnold 2001). Again, this indicates that there are shortcomings in Wal-Mart’s overall MO activities that is a handicap when developing a proper establishment strategy for European markets.
Discussion and Conclusions In the two cases, there was little evidence of state subsidies or any other “unfair” competitive strategies to attract FDI. It seems the location decision was based on the market potential and size. Moreover, an entry into European market as a whole was the main purpose. Wal-Mart particularly focused on the two bigger markets in the EU, with an intention to expand successively. Toys‘R’Us on the other hand entered several European markets at the same time, most probably to ease access to distribution channels, augment distribution rates etc. One reason why the government did not provide any incentives for Wal-Mart in the UK and Germany, may have been the entry mode, i.e. acquisition of existing companies. As in this case the government could not see any new job opportunities or other benefits related to inward FDI. It appears greenfield investments are more likely to compete successfully for benefits in the race for FDI. The global matching activities are mostly carried out on a corporate level. These are likely to generate resources and relationships that support a retailer’s positioning on the host market. Furthermore, retailers are likely to have developed different skills concerning networking based on previous experiences and activities. Different firms are also likely to represent different views on the relevance of market inputs and on how much resources and efforts that should be dedicated to the particular host market. These factors will determine the degree of support given to the establishment process on that market. The paper suggests that an understanding of retailer’s foreign market entry processes and FDI location decisions calls for the consideration of different levels of analysis, and for an in-depth exploration of feasible ways to integrate existing
- 21 -
theoretical approaches. To this end location theory and matching, next to market characteristics such as size or infrastructure have been integrated in a comprehensive conceptual model. This is deemed to serve as a framework for empirical examination of location attractiveness. As far as the role of the government is concerned, this study suggests that for the retailing industry, the governments need to consider the following: Governments need to become more active in facilitating the adaptation process to new markets for retailers. They can take more initiatives to macro level matching, build supportive networks, and act as “brokers” between the entering retailer and key organizations on the host market. Governments are often more concerned with FDI by manufacturing firms, as these are expected to bring in good job opportunities and represent an easily ‘marketable’ communication success for policy makers. However, what appears to be forgotten quite often is that retailing firms bring in even more job opportunities than a single production unit. Both Wal-Mart and Toys‘R’Us appear to have tried to get partners on new markets that were well suited for implementing the existing retail proposition, based mostly on experiences from the American market. Perhaps an entry would be more successful if the retailers had also looked for partners who could provide them with the best knowledge about the characteristics of the new market. It seems reasonable to argue that retailers should spend relatively less effort on global level matching and considerably more on macro and micro level matching. Most retailers do not have to make the same huge and concentrated global investments as manufacturers do when they go international – thus perhaps a lesser need for global level matching. It is also more difficult for retailers to apply a universal marketing strategy for its global enterprises, because retailing demands even larger adaptations to each host market than manufacturing do. Through macro and micro level matching with the local government, retailers might even be able to attract certain location benefits.
- 22 -
References Alexander, Nicholas (1997), International Retailing. Oxford, UK: Blackwell Business. Alexander, Nicholas (1990), "Retailers and International Markets: Motives for Expansion," International Marketing Review, 7 (4). Alexander, Nicholas and Hayley Myers (2000), "The Retail Internationalisation Process," International Marketing Review, 17 (4), 334-353. Altstadt, Anne-Charlott (2001), Strejken På Toys 'R' Us: En Sommar Som Skakade Sverige. Stockholm: Ordfronts Förlag. Anderson, Erin and Barton Weitz (1992), "The Use of Pledges to Build and Sustain Commitment in Distribution Channels," Journal of Marketing Research, 29 (1), 18-43. Anderson, James C., Hakan Hakansson, and Jan Johanson (1994), "Dyadic Business Relationships Withing a Business Network Context," Journal of Marketing, 58 (4), 1-15. Arndt, Johan (1979), "Toward a Concept of Domesticated Markets," Journal of Marketing, 43 (4), 69-75. Arnold, Stephen J. (1999), "Research Note: Wal-Mart in Europe," International Journal of Retail & Distribution Management, 27 (1), 48-51. Arnold, Stephen J. and John Fernie (2000), "Wal-Mart in Europe: Prospects for the Uk," International Marketing Review, 17 (4), 416-432. Autio, Erkko, Harry J. Sapienza, and James G. Almeida (2000), "Effects of Age at Entry, Knowledge Intensity, and Imitability on International Growth," Academy of Management Journal, 43 (5), 909-924. Axelsson, Björn and Jan Johanson (1992), "Foreign Market Entry: The Textbook Vs. The Network View," in Industrial Networks: A New View of Reality, Björn Axelsson and Geoff Easton (Eds.). London: Routledge, 218-236. Barkema, Harry G., John H. J. Bell, and Johannes M. Pennings (1996), "Foreign Entry, Cultural Barriers, and Learning," Strategic Management Journal, 17 (2), 151-166. Bartlett, Christopher A. and Sumantra Ghoshal (2000), Transnational Management: Text, Cases, and Readings in Cross-Border Management (3rd ed.). Boston: Irwin McGraw-Hill. Blankenberg, Désirée and Jan Johanson (1992), "Managing Network Connections in International Business," Scandinavian International Business Review, 1 (1), 519. Brown, S. and Steve L. Burt (1992), "Conclusion - Retail Internationalization: Past Imperfect, Future Imperative," European Journal of Marketing, 26 (8,9), 8084. Buckley, Neil (2003, January 8, 2003), "As Annual Sales Reach $240 Bn, Can WalMart Conquer Markets Outside the Us?," Financial Times, London, 17. Buckley, Peter J. (1989), "Foreign Direct Investment by Small- and Medium-Sized Enterprises: The Theoretical Background," Small Business Economics, 1, 89100. Buckley, Peter J. and Mark Casson (1976), The Future of the Multinational Enterprise. London: Palgrave Macmillan.
- 23 -
Buckley, Peter J. and Mark Casson (1979), "A Theory of International Operations," European Research in International Business, 1-8. Buckley, Peter J. and Pervez N. Ghauri (2002), International Mergers & Acquisitions: A Reader. London: International Thomson Business Press. Buckley, Peter J. and Pervez N. Ghauri Eds. (1999), The Internationalization of the Firm: A Reader (2nd ed.). London: International Thompson Business Press. Buckley, Peter J., C.L. Pass, and Kate Prescott (1992), "The Internationalization of Service Firms: A Comparison with the Manufacturing Sector," Scandinavian International Business Review, 1 (1), 39-56. Burt, Steve L. (1993), "Temporal Trends in the Internationalisation of British Retailing," International Journal of Retail, Distribution and Consumer Research, 3 (4), 391-410. Burt, Steve L. and Jose Carralero-Encinas (2000), "The Role of Store Image in Retail Internationalisation," International Marketing Review, 17 (4), 433-453. Cateora, Philip R. and Pervez N. Ghauri (2000), International Marketing - European Edition. London: McGraw-Hill Publishing Company. Cavusgil, S. Tamer, Pervez N. Ghauri, and Milind R. Agarwal (2002), Doing Business in Emerging Markets: Entry and Negotiation Strategies. Thousand Oaks: Sage Publications. Coviello, Nicole and Hugh Munro (1997), "Network Relationships and the Internationalization Process of Small Software Firms," International Business Review, 6 (4), 361-386. Dawson, John (1994), "Internationalisation of Retailing Operations," Journal of Marketing Management, 10 (4), 267-282. Deloitte & Touche Tomasu, Corp. (2002), "Retailing 2000," Deloitte & Touche Tomasu Report. Doherty, Anne Marie (1999), "International Retail Franchising: An Agency Theory Perspective," International Journal of Retail & Distribution Management, 27 (6), 224-237. Dunning, John H. (1972), International Investment: Selected Readings (Penguin Modern Economics Readings). Harmondsworth: Penguin. Dunning, John H. (1989), "The Study of International Business: A Plea for a More Interdisciplinary Approach," Journal of International Business Studies, 20, 411-436. Eriksson, Kent, Jan Johanson, Anders Majkgard, and D. Deo Sharma (1997), "Experiential Knowledge and Cost in the Internationalization Process," Journal of International Business Studies, 28 (2), 337-360. Fernie, John and Stephen J. Arnold (2002), "Wal-Mart in Europe: Prospects for Germany, the Uk and France," International Journal of Retail & Distribution Management, 30 (2), 92-102. Fernie, John and Stephen J. Arnold (2001), "Wal-Mart Stores Inc. In Europe," in International Marketing: Consuming Globally, Thinking Locally, Andrew McAuley (Ed.). Chichester: Wiley, 310-315. Ford, David (1998), Managing Business Relationships. Chichester, England: John Wiley. Ghauri, Pervez N. (1999), "From Mass Marketing to Relationships and Networks," in Advances in International Marketing, Pervez N. Ghauri (Ed.). Conneticut: JAI Press, 1-17. Ghauri, Pervez N. and Karin Holstius (1996), "The Role of Matching in the Foreign Market Entry Process in the Baltic States," European Journal of Marketing, 30
- 24 -
(2), 75-88. Ghauri, Pervez N. and P. Kumar (1989), "An Empirical Investigation of Factors Influencing Export Behavior of Smaller Swedish Firms in Avlonitis," in Marketing Thought and Practice in the 1990s, Papavasiliou and Kouremeds (Eds.) Vol. 355-372. Athens: The Athens School of Economics and Business Science Gundlach, Gregory T., Ravi S. Achrol, and John T. Mentzer (1995), "The Structure of Commitment in Exchange," Journal of Marketing, 59 (1), 78-92. Hallén, Lars, Jan Johanson, and N. Seyed-Mohamed (1991), "Interfirm Adaptation in Business Relationships," Journal of Marketing, 55 (2), 29-37. Hamill, Jim and John Crosbie (1990), "British Retail Acquisitions in the Us," International Journal of Retail & Distribution Management, 18 (5), 15-20. Helfferich, Evert, Marjolein Hinfelaar, and Hans H. Kasper (1997), "Towards a Clear Terminology on International Retailing," The International Review of Retail, Distribution and Consumer Research, 7 (3), 287-307. Hollander, Stanley C. (2000), "Distinguished Retrospective Viewpoint: Study Retailing and See the World?," International Marketing Review, 17 (4), 327333. Hollander, Stanley C. (1997), Multinational Retailing. East Lansing, Michigan: Michigan State University. Holstius, Karin (1990), "The Matching Concept and Its Application to International Joint Ventures," in Research Report. Lappeeranta, Finland: Lappeeranta University of Technology, Department of Industrial Engineering and Management Research Report 29. Hood, Neil and Thorsten Truijens (1993), "European Locational Decisions of Japanese Manufacturers: Survey Evidence on the Case of the Uk," International Business Review, 2 (1), 39-63. Itabor, Rita I. (2002), "International Retail Activity - an Analysis of Wal-Mart's Level of Market Orientation in the Uk," MSc Dissertation, Manchester: UMIST. Jaworski, Bernard J. and Ajay K. Kohli (1993), "Market Orientation: Antecedents and Consequences," Journal of Marketing, 57 (3), 53-70. Jeannet, Jean-Pierre and Hubert D. Hennessey (1998), Global Marketing Strategies (4th ed.). Boston: Houghton Mifflin Company. Johanson, Jan and Lars Gunnar Mattson (1988), "Internationalisation in Industrial Systems: A Network Approach," in Strategies in Global Competition: Selected Papers from the Prince Bertil Symposium at the Institute of International Business, Stockholm School of Economics, Neil Hood and JanErik Vahlne (Eds.). London: Croom Helm, 287-314. Johanson, Jan and Jan-Erik Vahlne (1977), "The Internationalization Process of the Firm - a Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies, 8 (1), 23-32. Johanson, Jan and Finn Wiedersheim-Paul (1975), "The Internationalization of the Firm - Four Swedish Cases," Journal of Management Studies, 12 (3), 305-322. Kacker, M. P. (1985), Transatlantic Trends in Retailing: Takeovers and Flow of Know-How. Westport, Conn.: Quorum Books. Kojima, K. (1982), "Macroeconomic Versus International Business Approach to Direct Foreign Investment," Hitotsubashi Journal of Economics, 23 (1), 630640. Kotabe, Masaaki and Kristiaan Helsen (2000), Global Marketing Management Update 2000. New York: John Wiley & Sons.
- 25 -
Larsson, Rikard, Kenneth Brousseau, Michael Driver, Mikael Holmqvist, and Veronika Tarnovskaya (2003), "International Growth Trough Cooperative Strategies. Brand-Driven Straetgies, Leadership and Career Development in Sweden," The Academy of Management Executive, in print. Lumpkin, G.T. and Gregory G. Dess (1996), "Clarifying the Entrepreneurial Orientation Construct and Linking It to Performance," Academy of Management Review, 21 (1), 135-172. Macneil, Ian R. (1980), The New Social Contract: An Inquiry into Modern Contractual Relations. New Haven, Conn.: Yale University Press. Manimala, Mathew J. (1999), Entrepreneurial Policies and Strategies - the Innovator's Choice. Thousand Oaks, CA: Sage Publications. Matsuno, Ken, John T. Mentzer, and Aysegul Özsomer (2002), "The Effects of Entrepreneurial Proclivity and Market Orientation on Business Performance," Journal of Marketing, 66 (3), 18-32. McGoldrick, Peter J. (2002), Retail Marketing (2nd ed.). London: McGraw Hill Education. Miles, Raymond E. and Charles C. Snow (1978), Organizational Strategy, Structure, and Process. New York: McGraw-Hill. Narver, John C. and Stanley F. Slater (1990), "The Effect of a Market Orientation on Business Profitability," Journal of Marketing, 54 (4), 20-35. O'Reilly, Charles and Jennifer Chatman (1986), "Organizational Commitment and Psychological Attachment: The Effects of Compliance, Identification, and Internatalization on Prosocial Behavior," Journal of Applied Psychology, 71 (3), 492-499. Oxelheim, Lars (1993), The Global Race for Foreign Direct Investment: Prospects for the Future. Berlin: Springer-Verlag. Pedersen, Torben and Bent Petersen (1998), "Explaining Gradually Increasing Resource Commitment to a Foreign Market," International Business Review, 7 (5), 483-501. Pellegrini, L. (1999), "Adaptation Costs and Internationalisation of Retailing," in Working paper, Cescom. Milan, Italy, Universita Bocconi. Pellegrini, L. (1994), "Alternatives for Growth and Internationalization in Retailing," The International Review of Retail, Distribution and Consumer Research, 4 (2). Penrose, Edith Tilton (1959), The Theory of the Growth of the Firm. Oxford: Basil Blackwell. Petersen, Bent and Torben Pedersen (1999), "Fast and Slow Resource Commitment to Foreign Markets; What Causes the Difference?," Journal of International Management, 5 (2), 73-91. Root, Franklin (1994), Entry Strategies for International Markets. Washington DC.: Heath & Company. Schneider, Dieter J. G. (1985), "Die Länderselektion Als Absatzstrategische Aufgabe Exportorientierter Mittelständische Unternehmungen," Der Markt, 95 (3), 6978. Sternquist, Brenda (1997), "International Expansion of Us Retailers," International Journal of Retail & Distribution Management, 25 (8), 262-268. Stopford, John M. and Louis T. Wells (1972), Managing the Multinational Enterprise - Organization of the Firm and Ownership of the Subsidiaries (The Harvard Multinational Enterprise Series). New York: Basic Books. Treadgold, Alan D. and Ross L. Davies (1988), The Internationalisation of Retailing.
- 26 -
London, UK.: Longman. Vida, Irena (2000), "An Empirical Inquiry into International Expansion of Us Retailers," International Marketing Review, 17 (4), 454-475. Voyle, Susanna (2003, January 8, 2003), "Mixed Fortunes in Britain and Germany," Financial Times, London, 17.
- 27 -
