Towards a framework for the study of franchising as an operating mode for international retail companies

In recent years franchising has become a popular operating strategy for companies competing in the global marketplace. In particular, international retailing companies have increasingly been adopting franchising as a marketentry mechanism. While this growth in the popularity of franchising has led to increased research interest in the topic, there has only recently been a recognition of the need to consider franchising within the wider context of retailer internationalization activity. This paper attempts to provide a framework for the study of franchising as a strategy for retailers expanding into international markets. The discussion examines key findings to date from the established literature on international franchising concerning the motivations underlying internationalization, the internationalization process itself and the operating problems encountered. It is argued that a careful examination of findings from the international franchising literature can provide further development of retail internationalization conceptualization.     

从国外实践看零售国际化对东道国的影响及应对策略

本文从供应链效力、水平竞争、消费者文化意识、东道国公共政策及社会文化价值等几方面,建立起零售国际化对东道国影响的分析框架,并且结合许多发展中国家与新兴市场的实例,对东道国政府与本土零售商的应对策略进行了分析.研究表明,政府的策略重点在于通过有效的政策设计适度保护民族零售商业,本土零售商则应通过塑造独特的竞争优势、重新定义市场区域、改变所有权结构等方式,积极应对外资的挑战.     

The Asian economic recession and retail change: the implications for retailer strategies in Asia

For almost three years the Asian Economic Crisis has been one of the most talked about influences on the retail sector in the region. This paper argues that the economic crisis has hidden or diverted attention away from the underlying changes in retailing that have been proceeding for much longer.A more dynamic and proactive retail sector appears to be evolving, one which is now less of a 'taker' of the strategies of manufacturers and more of a 'setter' of trends in product development and logistics. European and American retailers often appear to be major catalysts in this process, but this is not to say that the Asian retail sector will not develop in its own way, matched to local needs. What does now appear to be clear is that as economies in the region recover, most of their retail sectors will not go back to 'business as usual'.     

Retail internationalization: A review and directions for future research

Abstract

The purpose of this article is to provide a review of scholarly articles that have examined retail internationalization issues. We identify three core areas within RI research: (1) RI drivers and impediments, (2) RI strategy, and (3) RI performance. We also discuss four RI strategy issues that have been examined: (1) RI speed, (2) Foreign market selection, (3) Foreign entry mode, and (4) Strategy employed. Based on the review, we point to multiple areas where RI research is lacking and can contribute to the advancement of the field as well as offer insightful implications for international retail managers.     

Knowledge and knowledge sharing in retail internationalization: IKEA's entry into Russia

Abstract

Research on retail internationalization and internationalization in general acknowledges the relevance of knowledge management and organizational learning, even though there is a lack of discussion about the specific constructs and approaches that would be most fruitful. The central role of knowledge sharing in the internationalization process is rarely stressed. Furthermore, the specificities of retailing are likely to require special considerations if we are to be able to develop a theoretical as well as a practical understanding of knowledge and knowledge sharing in the internationalization process. The aim of this paper, therefore, is to develop a tentative approach to knowledge and knowledge sharing in international retailing based upon previous literature about knowledge sharing and the internationalization process and a case study of IKEA's entry into the Russian market.     

Consumption and the retail change process: a comparative analysis of toy retailing in Italy and France

Set in the context of a review and critique of the retail change literature, this study conceptualizes the importance of cultural diversity in consumption practices, and their dialectical interplay with retail structures. Underpinned theoretically by concepts located in Critical Theory and Bourdieu's studies of 'Distinctions', a grounded approach at a macro-level of analysis is applied to the comparison of the French and Italian toy retail sectors, which serves as an empirical illustration of the conceptual categories and relationships posited. In the comparative analysis of the French and Italian toy retail industry, the links between market structures and macro-economic and demographic factors, on the one hand, and localized consumption habits, on the other, are discussed, highlighting the interplay of the properties of the emergent retail activity and consumption categories of analysis. The impact of global sourcing and market entry of international retailers is assessed. Conclusions point to the importance of the forcefield between localized meaning and the dynamics of toy retail capital. It is argued that the commodity form of toys, together with the values attached to them and the role they play in childhood, is influencing the structures of national toy retail sectors which are also dependent on the overall retail system and broader environmental factors. In this, retail change processes take place as a result of the interactions between the different spheres and their particular expressions cannot be generalized across borders as they depend on the specific dynamics within each system.     

Lessons from the COVID19 pandemic: The case of retail and consumer service firms

The COVID-19 pandemic has impacted business operations in every industry and sector around the world. Scholars, practitioners and policymakers continue to engage in understanding the effects of lockdowns, social distancing measures and other restrictions on trade; the impact of government stimulus and support measures, and how businesses have adapted their operations. The dynamic nature of the virus, and the changing socio-political and economic landscape, provide the opportunity for empirical scholarly research examining how retail and service firms have responded to the challenges and potential opportunities presented by the pandemic, and how owner/managers have pivoted in an (often) uncertain trading environment. This paper presents the findings of an applied study involving business owners (N = 268) of SME retail and service firms in the island state of Tasmania, in Australia, during the first wave of the pandemic in 2020. Findings show: (1) despite over 65 per cent of respondents reporting a downturn in revenue during 2020, almost 80 per cent indicated they had confidence in business survival heading into 2021; (2) whilst on average, businesses did not rate the level of environmental hostility as being particularly high, there was a significant correlation between perceived environmental hostility and assessment of business performance and with the level of confidence of business survival; (3) Australian federal government support and other stimulus measures were deemed crucial for business survival during 2020 with three quarters of businesses accessing the ‘JobKeeper’ scheme, and (4) businesses adapted their operations during the pandemic in terms of new products and services, increased marketing, pivoting their use of technology and promoting ‘localness’.     

Income and time pressure: a person-situation grocery retail typology

A person-situation segmentation framework is proposed. The demographic variable 'income' and the situational variable 'time pressure' were integrated and applied to grocery retail shopping. Using a combination of individual scanning data and a mail survey, we divided a sample of moderate to frequent grocery shoppers in a large Belgian retail organization into four grocery-shopping segments - 'money-poor, time-rich', 'money-poor, time-poor', 'money-rich, time-rich' and 'money-rich, time-poor'. Significant differences existed between these segments in several demographic, behavioural and attitudinal characteristics, including: demographic - age, composition and size of household, number of children at home, marital status, location, education and occupation; behavioural - amount spent in the store, buying pattern for different product categories and different task definitions; attitudinal - overall attitude towards grocery shopping and different grocery-shopping attribute saliences.     

The role of market orientation,relational capital,and internationalization speed in foreign market exit and re-entry decisions under turbulent conditions

Firms’ internationalization strategies can vary with changing environments. Occasionally, a firm may choose to re-enter a foreign market it had abandoned in the past if environmental conditions have improved. The present study provides insight into the foreign market exit and subsequent re-entry processes. Specifically, we utilize the strategic flexibility perspective to investigate the impact of market orientation, relational capital, and internationalization speed on market exit and re-entry decisions under turbulence in a host market. Using a sample of 156 Turkish firms that operated during the Arab Spring in the Egyptian market between 2010 and 2015, we find that the market-oriented firms are more flexible in their market exit decisions than less market-oriented organizations. In addition, relational capital specific to the host country has a negative impact on market exit decisions under conditions of political conflict. The results also suggest that strong ties with partners in the host country increase the propensity to re-enter the market.     

Knowledge and internationalization of returnee entrepreneurial firms

This study aims to answer whether and how returnee entrepreneurs’ international experience and returnee entrepreneurial firms’ international market knowledge influence these firms’ internationalization. Anchored in a framework combining an entrepreneurial and knowledge-based view, we develop a model and four hypotheses on the relations between returnee entrepreneurs’ international experience, international market knowledge, international market commitment, and level of internationalization of the returnee entrepreneurial firm. Empirical evidence of the proposed model is derived from a recent sample of Chinese returnee SMEs in knowledge-intensive and high-technology industries. The main finding is that returnee entrepreneurs’ international experience nurtures international market knowledge of returnee entrepreneurial firms, which in turn has a positive effect on these firms’ international market commitment and level of internationalization. In terms of theory, the study extends our understanding of returnee entrepreneurial firms by uncovering the role of returnee entrepreneurs’ international experience and returnee firms’ international market knowledge during their initial and early international expansion.     

Supermarkets in China: the case of Shanghai

Supermarkets have established a visible presence in Shanghai with some 1,000 stores and an estimated 5 per cent of market share. Local chains dominate the sector but well-known international retailers are very active. Studies indicate that a large proportion of consumers regularly shop in supermarkets but they use them 'selectively', mostly for packaged and processed foods, and continue to purchase fresh food in traditional outlets. The author uses a variety of data types and a number of research methods to analyse supermarkets' penetration into Shanghai. A background discussion of the food retail system in Shanghai highlights the traditional formats, the local and foreign supermarket chains, and the independent supermarkets. The data from a consumer shopping behaviour study is then used to assess supermarkets' penetration. Supermarkets' fast penetration into Shanghai is surprising given the findings of earlier studies, which identified the existence of serious limitations on the format's penetration into less developed countries (LDCs). Consequently, the focus in the second part of the paper is on explaining the reasons for the success of supermarkets. The impact of the factors identified in the earlier studies as constraining supermarkets' advance were evaluated and it was found that in Shanghai three of these factors (consumers, traditional retailers and government) did not cause serious problems for supermarkets. Only the supply-side conditions negatively affected their operations. The Shanghai example highlights the need to update our thinking regarding the LDCs' food retail modernization process in a number of directions. First local supermarket chains, not foreign ones, drive the process. Second, supply-side factors, not the demand-side ones that were emphasized in earlier studies, pose the major difficulties. Third, this analysis affirms the importance of the 'selective' adoption phenomenon where LDC consumers who regularly shop in supermarkets continue to purchase fresh food in traditional outlets. The implications of this analysis for food retail modernization theory and for practice are discussed and the prospects for further development of the supermarket sector in Shanghai are assessed.     

Olfaction and the retail environment: examining the influence of ambient scent

This article concerns the ability of smell to assist the development and communication of retail brand image. It presents a number of propositions regarding ambient smell and the retail environment derived from the literature—including the potential for novel ambient aromas to act as a distinctive element in a retailer’s marketing mix. Empirical testing is achieved through a ‘natural experiment’ in a large electrical store using fragranced and unfragranced conditions. An environmental psychology base was used to develop an in-store questionnaire, supported by direct measurement of customer dwell times and subsequent interviews. In total, 329 questionnaires were returned and 429 customer groups were timed in the two departments where the experiment occurred. Significant differences in consumer perceptions of the store’s environmental attributes were identified, despite the fact that less than 10% of respondents questioned were aware of the use of in-store fragrances. The qualitative interviews provided some initial confirmation for the more complex propositions concerning the memory of scents.     

Big-box retailing and the urban retail structure: the case of the Toronto area

This paper examines the growth and impact of power centres and “big-box” retailers through the 1990s in the Greater Toronto Area (GTA). The data reveal that 72% of big boxes were added in the previous nine years and that twice as many opened in the suburban fringe as compared to the equally populated central area. Of all big-box locations, 59% are on industrial lands and close to expressways. Of all postal codes in the GTA, 11% account for 47% of the big-box locations and a 19% versus 7% of 1989–1995 sales growth. Average annual sales per store in the heavily dominated big-box areas is $2+million versus $1.4 million in non-box areas and market shares for the dominant big-box retailers range between 19 and 33% in their respective retail categories. In eight retail sectors in direct competition with big-box retailers, there is an overall decline of −7% in share of total stores. Between 1993 and 1997, the proportion of retail employment within 2 km of a big-box increased from 28 to 43%. This increase is accounted for by additional retail and service firms.     

Geodemographic and socioeconomic characterization of the retail attraction of leading hypermarket chains in Spain

This paper aims at examining the impact on demand of the competitive positioning strategies developed by the leading hypermarket chains in Spain. Specifically, the purpose is to carry out a geodemographic and socieconomic characterization of the potential consumers of each chain. As retail attraction has traditionally been divided into three components, distance, mass and image, a gravitational model is proposed which distinguishes them and facilitates the evaluation of existing differences across any a priori segmentation base. The empirical test identifies significant geodemographic differences in the retail attraction of hypermarket chains. Chains seem to target the whole market by developing an image balanced against the advantages and disadvantages derived from the spatial coverage strategy. Social class is not as good an indicator of hypermarket choice as expected, although some interesting patterns have been detected.     

The influence of related and unrelated industry diversity on retail firm failure

The purpose of this paper is to analyse the influence of related and unrelated industry diversity on retail firm failure with a focus on Swedish retailers. The paper develops competing hypotheses from organizational theory and the economics of agglomeration concerning the survival chances of retail firms located in geographic proximity. Hypotheses are tested using a hazard model and a sample of 48,953 retail firms observed during 2002–2010. Key findings show that increases in the local share of similar retail firms is positively related to the risk of failure while there is a negative relation between increases in local industry diversity and the risk of failure. These results indicate that knowledge transfer from a diverse set of industries are important in lowering the failure risk. Differentiating among small and specialized retail firms indicate that there is significant intra-industry heterogeneity in the influence of local industrial composition on the likelihood of failure.     

Violation behavior in vertical restraint: Empirical analyses in the case of retail price maintenance

An extensive body of work within the marketing and economics literature has been devoted to studying vertical restraints, yet only a few researchers have investigated the violation behavior of retailers. In this paper, we investigate violation behavior in the context of retailer price maintenance. We investigate this behavior using a unique data set from a subsidy program in China, which includes transaction-level information that shows retail price maintenance (RPM) practices in multiple product categories by multiple manufacturers across multiple markets. The results from our fixed effects regression show that retailer violations are more likely to occur when intra-product competition is high. However, how retailer violation likelihood varies with inter-product competition may depend on the product category. We find that inter-product competition, is negatively associated with the likelihood of violation, for “less popular” product categories in the program such as washing machines, air conditioners, etc., but is positively associated with the likelihood of violation for “popular” product categories such as refrigerators, televisions, and cell phones. Our research provides some of the first empirical evidence about retailer violation behavior under RPM in the world’s largest emerging market by focusing on the relationship between violation behavior and market structure. We discuss the implications for monitoring efforts of manufacturers and regulators.     

Fighting off the big guys: comparing competitive retail services strategies in industrialized and developing world settings

As global trends regarding increased mergers and acquisitions continue, small local retailers must learn how to fend off these strong attackers. We assess key services strategies when small-local retailers compete against large-national retailers in industrialized (USA) and developing world (black South African township) retail settings. Of key interest is how theories generated from industrialized world research apply in developing world settings. We found that small retailers fend off large national retailers using virtually identical strategies regardless of the level of economic development.

The meanings of informal and second-hand retail channels: some evidence from Leicester

Conventionally, informal and/or second-hand channels were viewed as being used by disadvantaged consumers out of economic necessity. With the cultural turn in retail and consumer research however, a new reading has emerged that views participation in such channels to be broader and more a matter of choice. To evaluate these contrasting perspectives, data collected from 120 face-to-face interviews in the English city of Leicester is reported in this article. Finding that the agency-orientated view of such retail channels is valid in affluent populations - but economic necessity remains the principal motive amongst lower-income populations - this paper reconciles these contrasting readings of economic and cultural theorists through a both/and approach sensitive to the varying meanings of such practices in different populations.     

Food waste in the retail sector: A survey-based evidence from Central and Eastern Europe

This paper explores the issue of food waste in the Lithuanian retail sector. A questionnaire survey was designed in order to collect the relevant data from both the largest retail chains with stores around the country and companies with small-scale stores in rural areas. The present case is interesting as the literature on Central and Eastern European countries is scarce in the sense of the quantification of food waste. In this paper, the amounts of food waste among different food product categories are discussed and then extrapolated to approximate food waste in retail trade for Lithuania by using sales revenue as a key parameter. The results suggest that food waste in the Lithuanian retail sector amounts to 36.4 thousand tonnes or 13.0 kg per capita per year. Fruits and vegetables account for more than a half (63%), whereas meat (products) come next representing some 9% of food waste. Therefore, these products can be considered as the major targets for valorisation schemes and other measures aimed at mitigation of food waste.     

The Impacts of Retail Promotions on the Demand for Orange Juice: A Study of a Retail Chain

This study examined the impacts of retail promotions on the demand for five brands of orange juices for a retail chain (referred to as Retailer X) and its competitors using the Rotterdam model. Results show that the combination of feature ads and displays had the largest impacts on retail revenue among the four promotional tactics considered, whereas temporary price reductions had no advertising impacts on retail revenue. Results also show that when Retailer X promotes an orange juice (OJ) brand using any of the tactics, a larger portion of the increased demand for the promoted brand comes from reduced demand for other brands of OJ in the same store or chain.A smaller portion comes from the decreased demand in Retailer X's competing stores in the same trading area.