...United Kingdom Email: Pervez.Ghauri@umist.ac.uk Ulf Elg Dep. of Business Administration, School of Economics and Mgmt, Lund University, Sweden Email: ulf.elg@fek.lu.se Rudolf R. Sinkovics Manchester School of Management, UMIST United Kingdom Email: Rudolf.Sinkovics@umist.ac.uk 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...
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...IMPORT An import is a good brought into a jurisdiction, especially across a national border, from an external source. The party bringing in the good is called an importer. An import in the receiving country is an export from the sending country. Importation and exportation are the defining financial transactions of international trade. In international trade, the importation and exportation of goods are limited by import quotas and mandates from the customs authority. The importing and exporting jurisdictions may impose a tariff (tax) on the goods. In addition, the importation and exportation of goods are subject to trade agreements between the importing and exporting jurisdictions. "Imports" consist of transactions in goods and services to a resident of a jurisdiction (such as a nation) from non-residents. The exact definition of imports in national accountsincludes and excludes specific "borderline" cases. A general delimitation of imports in national accounts is given below: * An import of a good occurs when there is a change of ownership from a non-resident to a resident; this does not necessarily imply that the good in question physically crosses the frontier. However, in specific cases national accounts impute changes of ownership even though in legal terms no change of ownership takes place (e.g. cross border financial leasing, cross border deliveries between affiliates of the same enterprise, goods crossing the border for significant processing to order or repair)...
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...attractive was the discount retailing industry in the USA when Wal-Mart first began operations in the 1950s? 3 THE THREAT OF ENTRY 3 THE DEGREE OF RIVALRY 3 THE THREAT OF SUBSTITUES 3 BARGAINING POWER OF BUYERS 4 SUPPLIER POWER 4 2. With reference to the key components of its Business Model, describe the sources of Wal-Mart’s competitive advantage in the USA 4 FIRM INFASTRUCTURE 4 HUMAN RESOURCES 5 INFORMATION TECHNOLOGY 5 PROCUREMENT 5 INBOUND LOGISTICS 5 OPERATIONS 5 MARKETING AND SALES 6 3. How sustainable is Wal-Mart’s competitive advantage in discount retailing in the USA? 6 IMITATION 6 SUSTITUTION 6 SLACK 7 HOLD-UP 7 4. With reference to Dunning’s Eclectic Paradigm of foreign direct Investment (FDI), compare and contrast Wal-Mart’s entry into the German market in 1997 with it’s subsequent entry into the UK market in 1999. Why was Wal-Mart unsuccessful in Germany, withdrawing in 2006, and relatively successful in the UK? 7 FIRM SPECIFIC ADVANTAGES 7 LOCATION SPECIFIC ADVANTAGES 8 INTERNALIZATION 9 APPENDICIES 10 APPENDIX 1 10 SOURCE: GOOGLE IMAGES 10 APPENDIX 2 10 SOURCE: GOOGLE IMAGES 10 APPENDIX 3 11 SOURCE: GOOGLE IMAGES APPENDIX 4 11 SOURCE: GOOGLE IMAGES 11 REFERENCES 12 1. How attractive was the discount retailing industry in the USA when Wal-Mart first began operations in the 1950s? Wal-mart evolved from Sam Walton’s goals for great value and great customer service and is now one of the world’s...
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...Walton (Chairman) Doug McMillon (President & CEO) | Products | Apparel/footwear specialty, cash & carry/warehouse club, discount store,hypermarket/supercenter/superstore,supermarket, eCommerce | Revenue | * * US$ 476.294 billion (2014) * US$ 468.651 billion (2013) | Operating income | * US$ 26.872 billion (2014) * US$ 27.725 billion (2013) | Net income | * US$ 16.022 billion (2014) * US$ 16.999 billion (2013) | Total assets | * US$ 204.751 billion (2014) * US$ 203.105 billion (2013) | Total equity | * US$ 81.339 billion (2014) * US$ 81.738 billion (2013) | Owner(s) | Walton family | Employees | 2.2 million (2013) | Divisions | Walmart Canada | Subsidiaries | Asda, Sam's Club, Seiyu Group,Walmex, @WalmartLabs, Walmart eCommerce | Website | Corporate.Walmart.com Walmart.com | Executive Summary: Wal-Mart has shown continued success in their use of information technology with e-commerce, a system that allows managers to view point-of-sale information, and the possible use of RFID chips in the near future. After reviewing the 2005 Harvard Business School study of Wal-Mart, it is evident that this company has been successful in expanding its operations in several foreign markets. Wal-Mart had established itself as the largest retailer in both Canada in 2003 and Mexico in 2004. Through acquisitions, partnerships, and go-it-alone strategies, Wal-Mart began the expansion of large-scale operations in...
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...Tesco Company Review Tesco is an international distribution based primarily in the UK, in Ireland and Asia. Its capitalization is 34.84 billion at 11 July 2008 and its turnover is 80 billion Euros in 2008. Tesco is British distribution group and 3rd World Group. Its activity revolves around three areas: distribution in the UK, international distribution and financial services. (Pagano, Margareta, 16 May 1987). The Macro Business Environment of Tesco Group The Macro-Environment consists of factors that may influence an organization externally. This is usually outside of the control of corporations. Examples of factors that may influence a business are changes in interest rates, changes in cultural trends and tastes, more competitors in surrounding areas as well as greater regulations or changes to government laws. (Pagano, Margareta, 16 May 1987). A popular method used to analyze the macro-environment is through a PESTLE analysis which stands for political, environmental, sociological, technological, legal, and ethical issues. Factors That Will Have Significant Impact on Tesco Political Factors The political environment includes all government actions that affect the business in the retail trade. This effect may be through formal legislation, such as the law on the sale of goods, as well as through competition policies and planning systems. For example, the recent developments relating to food safety and sale of genetically modified foods also influence and...
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...Skip to content HOME BLOG A2 GEOGRAPHY Discuss the roles and relative importance of NICs and TNCs in a changing global economy. Discuss the roles and relative importance of NICs and TNCs in a changing global economy. An economy is the activities related to the production of goods and services within a specified geographic region. This can exist on a national scale, the trade and services within a country, but equally, if countries trade goods and services with each other, their economies interact, it can happen on a global scale, this is known as globalisation. This interaction of economies on a worldwide scale is else known as the global economy, and NICs and TNCs play a fundamental role in changing how it operates. An ‘NIC’, else known as a ‘newly industrialising country’ is a country where industrial production has grown sufficiently for it to become a major source of their income as a nation. A ‘TNC’ is a company that operates in at least two countries. They often have management headquarters in their home country and operate in host countries alongside; examples would include GlaxoSmithKline, BP, Wal-Mart and Coca-Cola. NICs are having a prominent impact on sculpting the global economy. They are characterised by the fact that they are gaining an increasing share of the world manufacturing output, a significant growth in their manufactured export production and a significant annual growth in their manufacturing sector. The first generation of NICs were,...
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... Wal-Mart Stores, Inc. is an American public corporation that runs a chain of large discount stores and a chain of warehouse stores. It is the world largest public corporation by revenue, according to the Forbes Global 2000. Wal-Mart has 8500 stores in 15 countries, with 55 different names. The company operates under its name in the United States, including 50 states. Wal-Mart operates in Mexico as Walmex, in the United Kingdom as Asda, in Japan as Seiyu and in India as Best Price. It has wholly owned in operation in Argentina, Brazil, and Canada. Wal-Mart investment outside North America have had mixed result: it operation in the United Kingdom, South America, and China are highly successful, while it was forced to pull out of Germany and South Korea when ventures there were unsuccessful. Wal-Mart operates in three business segments - Wal-Mart U.S., International, and Sam's Club. For fiscal 2010, Wal-Mart U.S. accounted for 63.8% of total net sales, the International segment generated 24.7% of the company's net sales, and Sam's Club accounted for 11.5% of net sales. International competitiveness Internal analysis – Micro environmental factors affecting international sales P.E.S.T analysis – Macro environmental factors affecting international sales. Fortune magazine front cover featuring Wal-Mart. Conducting business internationally will never be easy as doing business at home. It is likely to stretch managerial skills and resources to...
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...COMPANY PROFILE Ikea Group REFERENCE CODE: 6878C795-4BCB-4C85-A319-6F33C508FD80 PUBLICATION DATE: 14 Aug 2014 www.marketline.com COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED. Ikea Group TABLE OF CONTENTS TABLE OF CONTENTS Company Overview..............................................................................................3 Key Facts...............................................................................................................3 SWOT Analysis.....................................................................................................4 Ikea Group © MarketLine Page 2 Ikea Group Company Overview COMPANY OVERVIEW Ikea Group (Ikea or 'the group') is an international home products retailer. It sells furniture, accessories, and bathroom and kitchen items. Ingka Holding BV, a wholly-owned company by Stichting Ingka Foundation, is the parent company for the Ikea group of companies. The foundation is owned by the Kamprad family. As of August 31, 2013, the group had operations in 43 countries across Europe, North America, Asia and Australia. Ikea is headquartered in Delft, the Netherlands, and employed 135,000 people as of August 31, 2013. The group recorded revenues of E28,506 million (approximately $37,280.1 million) during the financial year ended August 2013 (FY2013), an increase of 3.2% over FY2012. The operating profit of the group was E4,011 million (approximately...
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...Z01_JOHN2020_09_SE_EM18.QXD 10/13/10 9:09 Page 658 CASE STUDY Tesco: from domestic operator to multinational giant Michelle Lowe and Neil Wrigley This case considers the emergence of Tesco plc as one of the world’s leading multinational retailers. In a remarkable 10-year period, Tesco has transformed itself from a purely domestic operator to a multinational giant – with subsidiaries in Europe, Asia and North America – and in 2009 had 64 per cent of its operating space outside the UK. Examining market entry into Asia in more detail, the case compares ‘success’ in Thailand and South Korea with ‘failure’ in Taiwan. It also considers ‘a high risk gamble’ in Tesco’s entry into the US market, long considered to be a graveyard of overambitious expansion by UK retailers. ● ● ● Introduction In April 2009, Tesco, the UK’s largest retailer and private sector employer of labour, announced annual sales for 2008/09 of almost £60 billion (x66bn or $90.2bn) together with profits of £3 billion (x3.3bn or $4.5bn). After a dramatic decade-long transformation from purely domestic operator to multinational giant, Tesco now had a remarkable 64 per Source: Getty Images. cent of its operating space outside the UK, was developing increasingly strong businesses across 11 Asian and European markets, had a rapidly expanding ‘start-up’ subsidiary operating in the western USA, and had announced its entry into the Indian market. Moreover, as signalled in both the title of its Annual Report...
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...INTERNATIONAL ENTRY AND COUNTRY ANALYSIS A Lecture Programme delivered at the Technical University of Košice Andrew Harrison Formerly of Teesside University, United Kingdom December 20112 Andrew Harrison’s Brief Biography Andrew Harrison was a Principal Lecturer and Subject Group Leader in economics at Teesside University until August 2010 and has been a visiting lecturer at the Technical University of Košice since April 1993. He has also been a visiting lecturer in Germany, Ukraine and Singapore. Since leaving the full-time staff of Teesside University, he has continued to work as an occasional lecturer and as an external examiner at two other UK universities. He holds qualifications from London, Salford and Leeds Universities and Trinity College of Music, London. In April 2008, he was awarded the degree of Doctor Honoris Causa by the Technical University of Košice. He is married to Heather and has two grown-up children, David and Rachel. In his spare time he is a keen amateur pianist and organist. Brief Course Description International business activity is one of the key features of the contemporary global economy. The decision to venture abroad involves the evaluation of alternative entry modes, bearing in mind the degree of risk and the suitability of the business environment in a potential host country or region. Political, economic, cultural and other factors are all of vital importance. This short course aims to explore these issues in the light of current research and...
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...Z01_JOHN2020_09_SE_EM18.QXD 10/13/10 9:09 Page 658 CASE STUDY Tesco: from domestic operator to multinational giant Michelle Lowe and Neil Wrigley This case considers the emergence of Tesco plc as one of the world’s leading multinational retailers. In a remarkable 10-year period, Tesco has transformed itself from a purely domestic operator to a multinational giant – with subsidiaries in Europe, Asia and North America – and in 2009 had 64 per cent of its operating space outside the UK. Examining market entry into Asia in more detail, the case compares ‘success’ in Thailand and South Korea with ‘failure’ in Taiwan. It also considers ‘a high risk gamble’ in Tesco’s entry into the US market, long considered to be a graveyard of overambitious expansion by UK retailers. ● ● ● Introduction In April 2009, Tesco, the UK’s largest retailer and private sector employer of labour, announced annual sales for 2008/09 of almost £60 billion (x66bn or $90.2bn) together with profits of £3 billion (x3.3bn or $4.5bn). After a dramatic decade-long transformation from purely domestic operator to multinational giant, Tesco now had a remarkable 64 per Source: Getty Images. cent of its operating space outside the UK, was developing increasingly strong businesses across 11 Asian and European markets, had a rapidly expanding ‘start-up’ subsidiary operating in the western USA, and had announced its entry into the Indian market. Moreover, as signalled in both the title of its Annual Report...
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...Z01_JOHN2020_09_SE_EM18.QXD 10/13/10 9:09 Page 658 CASE STUDY Tesco: from domestic operator to multinational giant Michelle Lowe and Neil Wrigley This case considers the emergence of Tesco plc as one of the world’s leading multinational retailers. In a remarkable 10-year period, Tesco has transformed itself from a purely domestic operator to a multinational giant – with subsidiaries in Europe, Asia and North America – and in 2009 had 64 per cent of its operating space outside the UK. Examining market entry into Asia in more detail, the case compares ‘success’ in Thailand and South Korea with ‘failure’ in Taiwan. It also considers ‘a high risk gamble’ in Tesco’s entry into the US market, long considered to be a graveyard of overambitious expansion by UK retailers. ● ● ● Introduction In April 2009, Tesco, the UK’s largest retailer and private sector employer of labour, announced annual sales for 2008/09 of almost £60 billion (x66bn or $90.2bn) together with profits of £3 billion (x3.3bn or $4.5bn). After a dramatic decade-long transformation from purely domestic operator to multinational giant, Tesco now had a remarkable 64 per Source: Getty Images. cent of its operating space outside the UK, was developing increasingly strong businesses across 11 Asian and European markets, had a rapidly expanding ‘start-up’ subsidiary operating in the western USA, and had announced its entry into the Indian market. Moreover, as signalled in both the title of its Annual Report...
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...Walmart: Global Strategic Expansion - Executive Summary Since introducing its first international store in 1991, Walmart has transformed itself from an American retail giant into a global one, leveraging a wealth of resources to strategically expand operations. Although Walmart must contend with several formidable competitors, the retailer has successfully opened thousands of stores across the globe; most frequently, it has added international units through the acquisition of foreign retailers, which simultaneously reduces its competition and furthers its dominance. Walmart has differentiated itself by coupling its understanding of political, economic, legal, and cultural systems within target markets with its low-cost, high-quality approach to mass retail. Utilizing simultaneous strategic multiple thrusts, Walmart has developed layers of competitive advantage to establish itself as the world’s leading retailer. Focusing on strategic expansion, Walmart currently operates 9,826 stores across twenty-eight countries, allowing it to capture global scale efficiencies by creating a coordinated and integrated network of interdependent stores. Each unit within its network is regarded as a source of ideas and capabilities, and innovation is diffused across the company through initiatives such as a market-by-market training program that helps increase the company’s responsiveness to local demands and preferences. Thus, Walmart has established itself as a transnational corporation by developing...
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...Marketing Introduction The nature of international marketing Contextual determinants of international marketing Historical development Definition of international marketing Relationship with other business fields A theoretical framework for international marketing Approaches to internationalization Factors causing internationalization The process of firms’ internationalization A holistic approach The motivation for firms to go international Trade theories and economic development Absolute advantage Comparative advantage The assumptions underlying the principles of comparative advantage International trade theories Classical trade theory The factor of proportion theory The product life cycle theory Foreign direct investment (FDI) The eclectic paradigm The impact of FDI on national economies The...
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...Context: 1. Introduction 2 2. Background of Wal-Mart stores Inc. 3 3. Retail organization internatinalization expension 4 4. International Expansion of Wal-Mart in Maxico,china and canada 5 5. Comparison of Entry Modes 6 6. comparison of Opportunities 7 7. Final touch 8 8. Conclusion 9 9.Bibliography 10 1. Introduction: Being present and having to enter foreign markets is for many companies natural, while for other it is a new challenge that they have to face. This challenge, known as market entry, consists of three major decisions: where to enter, when to enter and how to enter different markets. Some companies are forced to internationalize in the early stages of their life due to small saturated home markets, while other companies choose to go abroad because of the great opportunities new markets might bring (Peng, 2006). Once deciding to go abroad and choosing the target market and timing, companies' need to consider the choice of entry modes. Generally, to choose international firm there are six different entry modes: exporting, turnkey projects, licensing, franchising, joint ventures, wholly owned subsidiary (Hill, 2004). Each entry mode its distinctive characteristics (see, e.g., Hill, 2004; Hill, et al, 1990; Hill and kim, 1988; Anderson and Gatignon, 1986; Madhok, 1997; Brouthers and Brouthers, 2000; Bishop 2006. Selecting a suitable entry mode is a difficult decision for firms interested in entering a foreign market (Agarwal and Ramaswami, 1992). Sometimes...
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