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Title: British retailers' expansion into Europe
Author: Jackson, G. I.
Awarding Body: University of Manchester Institute of Science and Technology
Current Institution: University of Manchester
Date of Award: 1976
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Abstract:
This study concerns the problems, techniques and solutions involved when British retailers expand into continental Europe. The study starts by taking into account general theories and assumptions regarding organisational behaviour, and the existing body of knowledge concerning international business. From these wider contexts, the research narrows down to focus upon retail firms and their international expansion. At the time of writing some fifty-six firms have expanded into continental European retailing, though two of these withdrew entirely after suffering considerable losses. The remaining fifty-four firms have operated with varying degrees of success since the pioneering moves around the turn of the century. Most of the 169 identified entries occurred since 1970, and are the focus of attention in the present research. Any firm engaged in retailing has certain features which distinguish it from firms in either the primary or secondary sectors of industry. To identify the special characteristics of retailers, it is useful to recognise that the elements which go to make up the Retail Formula are but the manifest expression of an underlying Business Idea. The Business Idea is the structural and dynamic basis upon which the Retail Formula can be adapted in a consistent way to changes which occur in the environment. The concept of Business Idea forms a starting point for the analysis of many aspects of foreign retail expansion. Every retail company expands into Europe with its own particular set of motives, but it is possible to identify four common themes. Some firms have motives which are defensive in nature, but on top of this some offensive motive is also frequently of present. The stimulus to look at expansion abroad is always a mixture of events over time: the influence of the Chief Executive and approaches from firms abroad liming common factors. The decision-making process ranges from being ad-hoc, to searching for coportunities, to being broad-based strategic planning. Firms tend to behave in a less ad-hoc manner the more experience they have gained in foreign expansion. Expansion strategies tend to follow one of two alternatives: expanding simultaneously into many countries; or one country at a time, learning from each entry curve. Most firms tend to follow the latter route. The main entry tactics are self-start, joint ventures and takeovers. These are analysed in three ways. Firstly, the benefits and problems associated with each tactic are described; secondly, a model is developed explaining how firms select their tactics; and thirdly, the choice of tactic is related to the whole decision. making process. Every expansion move contains some elements of investigation: of the firms own strengths and weaknesses, of specific opportunities and of markets. The most frequent markets where British firms have started retailing are France and the Netherlands; while the least popular major European country has been Italy. Whenever the retailing firm expands abroad some changes are made in the Retail Formula of the foreign subsidiary. The thesis examines the question whether it is sufficient merely to change the Retail Formula, or whether success depends on adapting the whole Business Idea to the new environment. The study of adapting the operation abroad leads on to analysis of the allocation of responsibility for making changes and managing the differences between the parent and subsidiary. The pressures are usually overwhelmingly towards close control, with little autonomy being left to the subsidiary. The organisation structures for British retailers operating in Europe are presently relatively simple. There are indications that controls are starting to become more open; and as the foreign retail subsidiaries establish their success and grow into a sizeable business, so more complex organisation structures can be expected to evolve. A stage by stage study of performance is undertaken, showing how targets are chosen, and how firms' experiences range from the relatively straightforward, to the highly problematic. An overview of the expansion of British retail expansion is developed, which allows all the moves so far made, plus the subsequent penetration, to be categorised and compared. The emerging trends are now for those firms which are already operating in Europe to build on existing footholds, expand into more European countries, and to start to spread worldwide.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID: uk.bl.ethos.482203  DOI: Not available
Keywords: Economics & economic theory Economics
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