The intemationalisation of small to mediun sized retail companies

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Journal of Marketing Management, 2005,21,149-179

Karise Hutchinson^*, The Intemationalisation of Small to Barry Quinn* and Medium-Sized Retail Companies: Nicholas Alexander'^ Towards A Conceptual Framework
The intemationalisation of large multinational retailers is well documented and much research attention has been given to their processes, motives and strategies for expansion. However, asuccessful international retailer does not necessarily have to be a large retailer. Dynamic smaller retailers with strong concepts, formats and products have shown themselves capable of rapid international growth. To date there has been a distinct lack of research on the intemationalisation of small to medium-sized companies (SMEs) operating in the retail sector. Any discussion of SMEintemationalisation within the retail industry should recognise that research on large multinational corporations is not directly transferable to small and medium-sized firms who by their very nature and characteristics embrace a very different set of opportunities in the international market. To address this gap in research, this paper draws upon broader established international SME and entrepreneurshipliteratures to provide a framework for examining some of the key aspects of the intemationalisation of retail SMEs.

*University of Ulster ^University of Wales, Aberystwyth

Introduction The intemationalisation of retail operations has attracted substantial research in recent times particularly in the areas of the motivations for intemationalisation (Alexander 1990; Williams 1992a), the extent anddirection of activity (Robinson and Clarke-Hill 1990; Pelligrini 1994; Sternquist 1997) and the entry mode strategies available to international retail companies (Doherty 1999; Quinn 1999). Although there is now a developed body of knowledge on the topic, it is interesting to note that the majority of studies have focused, either implicitly or explicitly, on the activities of large retaUorganisations (Burt 1986; Alexander 1990; Williams 1 Correspondence: Karise Hutchinson, University of Ulster, School of Business, Retail and Financial Services, Coleraine, BT52 ISA, Northern Ireland, Phone: + 44 028 70323054, Fax: +44 028 70324910, Email: ISSN0267-257X/2005/1-2/00149 + 30 £8.00/0 ©Westbum PubUshers Ltd.


Karise Hutchinson, Barry Quinn and NicolasAlexander

1992b; Sparks 1995; Arnold and Femie 2000). There has been considerable justification for a large retailer focus in the study of international retailing. It has been postulated that only mature international mass retailers could achieve a global presence because of capital and experience (Waldman 1978) and the financial ability to absorb any losses entailed from international retailoperations (WUliams 1991). In the 199O's international operations, whilst only undertaken by a small minority of all retail firms, became increasingly common activities among large firms (Dawson 1994). At this time, large retaU operations ranked among the largest business enterprises in developed economies and in order to remain competitive, intemationalisation became not an option but rather a necessity(Akehurst and Alexander 1995). Despite the obvious advantages associated with large sized operations, smaller dynamic retailers with strong concepts, formats and products have shown themselves capable of rapid international growth. Some of today's more globally recognised retail names such as Benetton and The Body Shop were relatively small at the time of their initial international development,yet through franchised operations, grew rapidly in the global environment. In addition, some luxury goods retailers with international locations are really quite small in comparison to the leading department and high street chains. Arguably, such companies have greater potential in international markets than larger retailers weighed down by organisational preconceptions (Alexander and Quirm...