StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Pattern of Expansion of Global or Multinational Retailer - Assignment Example

Summary
The paper “Pattern of Expansion of Global or Multinational Retailer” is a convincing example of a business assignment. Is the retailer classified as a global retailer or a multinational retailer? Explain its pattern of expansion. What expansion strategy did/ is the retailer use/ using? H&M can be classified as a global retailer rather than a multinational retailer…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92.8% of users find it useful

Extract of sample "Pattern of Expansion of Global or Multinational Retailer"

1- Is the retailer classified as a global retailer or multinational retailer? Explain its pattern of expansion. What expansion strategy did/ is the retailer use/ using? H&M can be classified as a global retailer rather than a multinational retailer since Hennes and Mauritz operates on a centralised system by opening wholly owned subsidiaries and investing in many countries of the world and having a complete control over its product offering .Its global strategy is further controlled by the holding company and it offers its products keeping in mind its objective of fashion, price and quality then adapting their products as per the local market demand which is generally done by multinational retailers. H&M uses a centrally owned subsidiary system of expansion, they do not enter into any joint ventures or give franchise of their brand rather they exclusively own their outlets and stores opened in different countrieswhich gives them complete control over their stores and help them build on expansion and marketing strategies as per their requirement. H&M is using Dunning’s electric theory of ownership, location and internalization, H&M usually opens their stores in prime locations and follows a centralised management system which enables them the advantage of asset based ownership, geographical proximity doesn’t plays a major role in their expansion strategy. They do not follow the policy of first mover advantage, rather they wait for the right time and target the upper segment group of consumers in the customer pyramid. H&M further benefits more by opening their own stores then hiring local independent firms to sell their products and services which given them the advantage of internalization. 2- Based on Dunning's eclectic theory, how do ownership, locational and internalization factors play in your retailers' international expansion? H&M is a global retailer which has done exceptionally well in expanding their market globally in a very short span of time. They follow the Dunning’s electric theory in their international expansion which gives them the advantage of ownership, location and internalization, since H&M follows a holding-subsidiary system, they open their own stores with centralised management system having complete control over their stores. H&M follows asset based ownership which enables them to have competitive advantage over their competitors which further escalates their expansion strategy keeping in mind their objectives of delivering fashion, price and quality. Location plays a major role in their rapid growth, H&M usually open their stores in prime location of different countries and target the higher income group of consumers. They further expand their business in only those countries which are economically and politically stable. H&M has an edge of opening their stores in different countries than only in their own countrydue to their expansion strategy and demand for their products worldwide. Geographical proximity of opening their stores doesn’t plays a major role since they follow a centralised management system and have complete control over their stores right from regular stock taking to price, quality and fashion. H&M, thus enjoys the advantage of ownership and location which further helps them to enjoy the benefit of internalization, since they do not follow the policy of franchise or entering into joint ventures which enables them complete control over their stores and it proves advantage to open their own stores then hiring local firms to exploit the local market. 3- What role does cultural proximity and geographical proximity play in the retailer's international moves? H&M keeps their major objectives of delivering good quality, low price and fashionable products due to which demand of their products is always on a high in different countries. H&M further open their stores as wholly owned subsidiaries which gives them complete control over their stores. They expand their business in only those countries which are economically and politically stable due to this reasons cultural and geographical proximity does not plays a major role in their expansion strategy. Further, unlike their competitors who follow first mover advantage policy H&M waits for the right time and then expand their business in different countries by opening their own exclusive stores and targeting the higher income consumers than trying to target the whole of customer pyramid. Geographical and cultural proximity is further ruled out due to their centralised management system and delivering uniform products in all stores. H&M policies are implemented simultaneously in each of their stores which enables them to run all their subsidiaries effectively and in a uniform manner. H&M has further learned from their mistakes of opening giant stores and then latter opening smaller ones which they corrected immediately. H&M has expanded their business globally exceptionally well in the recent past which further shows that the internal policies of the company are strong enough to handle geographical and cultural issues and those does not create a hindrance in their smooth running of business globally. 4- Can you predict the retailer's future international expansion? H&M has been a global retailer, and have exceptionally expanded their business in rapid way by means of their centralised management system. It hardly seems that the corporation shall change their system of expansion in the near future. H&M does not follow the policy of first mover advantage as mostly done by their counterparts but rather wait for the right time and then makes a move. There is still immense scope of expansion in countries like Germany, Italy, France, Spain, United Kingdom and Poland and further in Asian countries like China, Japan or Russia. H&M shall definitely expand their business in near future since markets of countries like Austria, Netherlands and Scandinavian are at the verge of maturity stage. Demand of their products worldwide will also push H&M to expand their business at a faster rate. However, it seems unlikely that the corporation shall enter into any Joint Ventures or bring Franchisee system as this shall dilute their control over those stores and might also reveal their business secrets and might hamper their objective of low cost, god quality and fashionable clothing. Further the corporation has created a new label for their products in each store which has led to increase in demand of their products. It seems unlikely that they shall enter into any retail chains rather they shall continue to sell their products from their own exclusive stores and continue to target the higher income group of consumers in the customer pyramid then trying to target the middle income group. Read More

CHECK THESE SAMPLES OF Pattern of Expansion of Global or Multinational Retailer

Joint Venture and Wholly Owned Subsidiary in China

The increase of foreign investment in the country and the expansion of the local industry has led to increasing in joint ventures and wholly-owned subsidiaries (Chang, 2013).... … The paper "Joint Venture and Wholly Owned Subsidiary in China " is a perfect example of a business case study....
18 Pages (4500 words) Case Study

Global Strategic of Australian Manufacturing Company Investment - Billabong

… The paper "global Strategic of Australian Manufacturing Company Investment - Billabong" is a perfect example of a business case study.... The paper "global Strategic of Australian Manufacturing Company Investment - Billabong" is a perfect example of a business case study.... The company has experienced a sharp decline in sales since the 2009 global financial crisis (Billabong 2014).... The plan included leveraging the brand, expansion, e-commerce offerings and improved supply chain....
10 Pages (2500 words) Case Study

Leadership within the Context of a Globalized Environment, Leadership Style of Howard Schultz

nbsp;As the world becomes more connected through globalization, leaders in economic, social or political circles, cannot ignore the influence of global issues such as changing trade patterns, global politics, terrorism, cultural interactions, Internet and computing (Friedman, 2007).... nbsp;As the world becomes more connected through globalization, leaders in economic, social or political circles, cannot ignore the influence of global issues such as changing trade patterns, global politics, terrorism, cultural interactions, Internet and computing (Friedman, 2007)....
12 Pages (3000 words) Coursework

Commercial Bank Mamangment: Explan The Business Model Of ANZ Bank,analyse Profitability,asset

… Commercial Bank Management: ANZ'S Model AnalysisExplanation Of The ANZ Business ModelANZ developed a new business model that is customer focused in its quest to support performance and growth of the bank.... The model works in the three geographies Commercial Bank Management: ANZ'S Model AnalysisExplanation Of The ANZ Business ModelANZ developed a new business model that is customer focused in its quest to support performance and growth of the bank....
6 Pages (1500 words) Assignment

International Business: Bringing back History into International Business

He was further familiar with Mira Wilkins the renowned business historian who was the first to come up with historical structures of the multinational enterprise.... John Dunning's first major book examined US multinational investment in Great Britain which traced the evolution of firms back to the 19th century where some of the key concepts of the Ownership Location International OLI paradigm also referred to the as eclectic paradigm was first developed in that book as a result of empirical research and historical observation....
8 Pages (2000 words) Essay

Are Corporations Too Powerful and Presenting a Threat to Global Economies and the Environment

It traces how the power of corporations has grown over time and the environmental impact that has been created by multinational corporations through their business activities.... … The paper "Are Corporations Too Powerful and Presenting a Threat to global Economies and the Environment" is a perfect example of a business case study.... This report analyzes the power of corporations and evaluates whether corporations have become too perform to the level of being a threat to global economies, civil societies and the environment....
13 Pages (3250 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us