International Retailing Coursework Example

Critical Success Factors for Retailers in the Global Marketplace
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TOC o “1-3” h z u 1.0 Introduction PAGEREF _Toc508984999 h 32.0 Literature Review PAGEREF _Toc508985000 h 43.0 Application of Literature PAGEREF _Toc508985001 h 84.0 Conclusions, Recommendations, and Limitations PAGEREF _Toc508985002 h 114.1 Summary PAGEREF _Toc508985003 h 114.2 Recommendations PAGEREF _Toc508985004 h 114.3. Limitations and Suggestions for Future Research PAGEREF _Toc508985005 h 125.0 References PAGEREF _Toc508985006 h 14
1.0 Introduction With the advent of globalization, many firms have entered into international retailing to access the benefits of a broader customer base. Feldman (2016, p. 4) defined international retailing as “the management of retail operations in markets that are different from each other in their regulation, economic development, social conditions, cultural environment and retail structures. Different factors affect influence the need for business to venture in the global market; this entails the push and pulls factors which necessitate divestment in foreign markets (Gomes, Carneiro, & Kogut, 2017, p. 26). To analyze the factors which lead to a retailer expand to the global marketplace, Alexander and Doherty (2008, p. 2150) applied institutional theory. The theory explained both the regulatory framework in the countries of operation, cognitive, social system, normative and the institutional framework.

However, for this paper, the primary focus is on the critical success factor for retailers in the global marketplace. Therefore, the paper will review literature that relates to the factors of success in the international retailing.
The literature review will be informed by both the micro and macro factors that affect the performance of a business in the global marketplace. Noteworthy, the international retail market is diverse. It includes buyers and sellers of diverse social, cultural backgrounds in the different areas of the globe. The implication is that retail businesses are not geographically limited. The strategic thinking of the retailers is that any buyer is a potential customer provided that the seller can use the available infrastructure to reach the customer. Therefore, the report seeks to establish insights based on past researches that have explored international retailing to determine the critical success factors. The literature will entail secondary information from published scholarly articles.
2.0 Literature Review Many factors determine the success of any business in the international marketplace (Evans, Bridson, Byrom, & Medway, 2008, p. 261). The factors are both internal and external. Relating to the internal, the resources, strategic management measures, the business culture of the retail business, expertise in the field and the comparative advantage associated with the specific retail area. The external factors on the hand entail the size of the foreign market, political, cultural, social, and economic and the competitors influence the success of a retail business in the global market. Though these factors affect the different players, the way a company manipulates the micro and macro factor affect the success. Case in point, in the contemporary market society, the infrastructure determines the success of the retail business; thus, there is a need for the maximization of global sourcing opportunities that have been made available by the website.
In a study by Sahney (2008, p. 145), it was found that rapid growth in technology-based online retail activities has resulted in a shift from the store format to the online stores which have enhanced the way the sellers can access to many potential buyers online. Currently, a large population across the globe has access to the Internet. The Internet has become a great infrastructural factor that contributes immensely to the success factors of international retailing. The increased uptake of the online infrastructure is aided by the development of security features that make it easy for sellers to transact. Besides, trust, confidence, and privacy affect the acceptance of many customers to online services.
In the international retail business, gaining competitive edge depends on the factors that create value for the business and promote customer satisfaction. The implication is that for a business to succeed in the global market, the actual performance of business should exceed the expectations of the customers. In the study to investigate the critical success factor in online retail, Sahney (2008, p. 145) established that for international retailing success to be realized, accurate product and service delivery, articulate policies of transaction, unambiguous purchase, quick loading time, safety of transaction and the interactivity of the buyer and seller online are crucial factors (Sahney, (2008, p. 153).
The findings by Sahney (2008) are indicative of the growing interest in the internet and the subsequent use of it as a shopping platform. Many companies have realized the opportunity and have used the available internet infrastructure to increase their sales. Case examples of the companies that have succeeded by use of the online platform for the retail include Amazon.com, Inc., which has expanded through its online model to become the largest Internet retailer across the globe in term of market capitalization. Another online retailer that has capitalized on the e-commerce is Alibaba Group. For the two companies and others, the online platform has been critical success factor which has enabled them to reach many customers virtually. However, it is worth noting that the successes of the businesses are based on many other factors that relate to how the online infrastructure is deployed. Despite the challenges that relate to security issues and the inability for some retailers to build customer confidence regarding the online platforms, Sahney (2008, p. 156) established that the increased use of the Internet technology contributes immensely to the success of retailers in the global market.

For a retailer to excel in the global marketplace, an international strategy and comprehensive knowledge of the environment of operation are paramount. Lin and Chang (2017, p. 79) carried out a study to examine the key success factors of development in the global market; it ascertained that environmental scanning, international strategy, the capability of the organization and the internationalisation behavior were critical success factors. The organizational capability is the ability of the business to manage its resources to gain competitive advantage (Lin &Chang, 2017, p. 81). This can be related to the resource-based theory which capitalizes on the ability of a business to maintain a level of competitive advantage (Bhardwaj, Eickman, & Runyan, 2011, p. 299). Environmental scanning entails the processes of scanning requirements of customers and the general business environment factors that affect the global retail activities directly or indirectly. International strategy, on the other hand, involves the plans put in place by the international retailer to enter and operate in the global market. Besides, it includes policy and other strategic plans that create value for the business; for example, investment in platforms which promote customer confidence and satisfaction. Internalization behavior, on the other hand, is the processes that a company uses to shape its retail activities (Lin &Chang, 2017, p. 84) such as building strategic alliances that enhance reciprocal benefits while maintaining their identities. For example, two international retailers leveraging on the same supply chain to improve competitiveness.

The findings of the study pointed out to the fact that the expansion of a firm to the global marketplace and its success are depended on the integration of different strategies. As a result, for a business to gain competitiveness in the global market, there is the need to ensure adequate planning. For example, in case of Amazon.com Inc., it has created a value chain that ensures that customers can access the products they purchase online through different channels of delivery.
Also, Feldman (2016, p. 1) conducted a study to understand the failures and successes of international retailing in the Polish market. The study’s main objective was to identify the success factors and failures of foreign businesses which have entered or planning expand into the Polish market. The study explored specific cases. The findings of the study identified five factors which are crucial for international retailers. The ability to adapt to the local market dynamics, the pricing strategy, e-commerce, early timing, and learning-by-doing’ were listed as crucial pointers to success. Price strategy is the using the factor of price as a point of competition. For instance, being flexible and ensuring that the selling price is lower compared to that of competitors.
The ability to adapt to the local market involves bridging the cultural distance. This can be achieved by employing local staff to help to enhance acceptance and make the retail processes conform the home trends. Learning by doing entails flexibility while entry timing is a critical factor for the new entrants. Even though the study was specific and based on a given market, it is worth noting that many factors come to play in the different foreign markets. In the global market, dynamics of the market do not restrict entry; competition is open to many international players who have resources to expand (Feldman (2016, p. 11). Finally, the e-commerce is a critical success factor in any country. Today, the world is technologically driven by the Internet as pointed out by Sahney (2008, p. 145). Nevertheless, the findings by Feldman (2016, p.11) are similar to other findings that have underscored the criticality of adaptability to the foreign trends and embracing specific measures to gain competitive advantage (Evans et al., 2008, p. 276). As a result, the findings by Feldman (2016) to a larger extent can be generalised for other countries.
3.0 Application of Literature
The literature has underscored the factors that need to be considered if a retailer is to succeed in the global marketplace. The literature provided insights that could be used as a blueprint for success. Nevertheless, synergies need to be created based on the internal and external environment of operation. From the literature, it is evident that the success of international retail depends on many factors. Therefore, it is upon the management of a firm that is in the global marketplace to put in place strategic measures that will help the business to gain a competitive edge. As pointed out by Feldman (2016, p.15), companies are supposed to adapt to the host country’s trends and organize their retail concepts if they are to realize success.
The implication is that the success factors mainly depend on the business model and the needs of the global business dynamics. The factors keep on changing due to the different dynamics in the global marketplace. Case example relates to McDonald’s, the factors that led to its success and the current international imprint in the global market as a leading fast food outlet has changed. As a result, it has to reorganize both internally and externally to align its operations with the changing needs (Hutchinson, Quinn, Alexander, & Doherty, 2009, p. 252). For instance, in the global market, many people who are the potential customers of McDonald’s have become more concerned about the health implications of the fast foods. As such, for McDonald to maintain its market share and the success, it should introduce foods which have less or zero trans-fat its meals in the markets of concern. This will be both a response to social needs and adaptability strategy. Such changes have a direct impact on the attitude of the customers as established in the case of McDonald (Deng, 2009, p. 37).
The case example of McDonald supports assertions by Evans et al. (2008, p. 276) that adaptation is a crucial factor which is pursued by many retailers. Adaptation denotes the ability to control the different elements of retail in the new market and devising marketing strategies that are paramount to the brand image. However, the adaptation does not imply that standardization of the brand is sacrificed. The brand image is critical, and for many global retail outfits, the brand image is a crucial factor that should be maintained in the different markets, it is only the execution strategy that differs. As a result, the literature provides important insights for the retailer in the endeavor to identify the aspects of marketing and retail strategy which are important for the brand in the global marketplace. In a similar study that focused on Brazil, it was found out that consumer relationships, competitive strengths, organizational culture, and formats of store and localization were key success factors for internalization for Carrefour (Diallo, 2012, p. 95).
Besides, the literature denotes the importance of companies to invest in infrastructure that can be used across the globe. As pointed out, for many retail stores, there have been shifts from the physical stores to online stores which allow virtual interactions with customers from different socio-cultural backgrounds. It is worth underscoring that the success of a business is determined by the satisfaction of the customer (Sahney, 2008, p. 157). In essence, it is about the retailer meeting and exceeding the expectations of the customers. Therefore, when investing in technology as a basis for gaining a competitive edge, factors that enhance the experience of the customers should be put into consideration. For instance, the convenience, performance of the systems, reliability, and trust of the customers ought to be considered. In context, the expansion and success of any firm in the global marketplace depend on the internal measures taken by a company to manage its international strategy. This should be based on a holistic approach in which environmental scanning, internationalisation measures and other factors as pointed out by Lin and Chang (2017, p. 83) should be analyzed to put in place the right strategies.
The literature also provided insights on matters that relate to competition; therefore, when a firm is benchmarking to expand the global marketplace, it is critical to understand that there also other international as well as local players (Feldman, 2016, p. 18). Thus, for a company to succeed, it should not underestimate the competition. It can thus be summed up that the success of retailers in the global market is depended on many factors that centre on what the retailer does and how they do it. The core is the management strategies that strategize for the in the factors that can lead to failure in the global marketplace such as the culture of the hosts and the environmental business intrigues. Case in point, social and cultural factors affect the perception and attitudes of the customers. As a result, right from the marketing strategies to the configuration of the service or product, proper analysis and understanding the various dynamics can lead to success or failure.
4.0 Conclusions, Recommendations, and Limitations
4.1 Summary The success factors in the international trade are myriad. Similarly, many factors can fail. However, the enumeration of the factors does not imply that any business will be successful as the global market dynamics keep on changing. Success in the global market depends on the factors that create value and promote the satisfaction of customers. It is through the internalization policy and strategy of a firm that success can be achieved. The strategic measures should centre on the businesses’ adaptability to the local market dynamics, the pricing strategy, e-commerce and early timing, and scanning of the environment to have and holistic comprehension of the factors that affect specific business. Besides, the investment in infrastructure and human resource influence how a retailer performs in any market. The factors are key pointers of the internationalisation behaviour that shape retail activities of a retailer. Case examples are investment measures on the online presence that have been put in place by leading retailers such as Amazon, and Alibaba Group. To avoid failures, the retailers in the global marketplace should have an international strategy for entering and operating with the primary goal of gaining a competitive edge. In the international retail business, achieving competitive advantage depends on the factors that create value for the business and promote customer satisfaction.
4.2 Recommendations
It is evident that success factors of the international retail depend on the management of the business. It is through the management that growth, competition strategies, and policies are drawn. Therefore, for a business to excel in the international retailing, firstly, it is essential for management to invest in researching the trends in the global market to understand the various complexities and opportunities. The knowledge acquired helps in devising the adaptation strategies in the global market. Retailers in the global marketplace need to understand the culture of the customers and should employ local staff who can communicate with buyers efficiently and in culturally acceptable approach. Secondly, the retailers need to put in place an e-commerce infrastructure that can support the online clients both as a selling and buying platform as well as a point of interaction to understand the sentiments of the buyers. A good understanding of the customers implies that the right strategies will be initiated to meet the market expectations.
It is advisable for retailers in the global marketplace to have an internationalisation strategy that suits their business model because different business will experience varying challenges. As a result, the internationalisation strategy needs to be comprehensive and tailored to the unique needs of any business for it to achieve the competitive edge in a foreign market.
4.3. Limitations and Suggestions for Future ResearchThe research on the critical international retailing success factors has provided insights. However, the research was based on secondary sources of information and was more of a systematic review of the literature. Most of the studies were general and focused on limited parameters of the international retail trade. For example, there was no in-depth analysis of the geopolitical issues which determine success or failure of international retailing. Therefore, to address such limitations, there is the need for further research that extends to different areas related to international retailing; for instance, focusing on matrixes that provide a comprehensive review of the internal and external factors of firms in the context of their operations in the global marketplace. Also, future research could survey key global players in the international retailing to provide a holistic view of the measures that have contributed to their successes. Also, instead of the systematic review, exploratory research should be conducted to enhance knowledge of the success factors in the contemporary environment.
5.0 ReferencesAlexander, N. and Doherty, A.M. (2008). International Retailing. Oxford: Oxford University Press.
Bhardwaj, V., Eickman, M., & Runyan, R. C. (2011). A case study on the internationalisation process of a ‘born-global’fashion retailer. The International Review of Retail, Distribution and Consumer Research, 21(3), 293-307.
Deng, T. (2009). McDonald’s new communication strategy on changing attitudes and lifestyle. IJMS, 1 (1), 1-2.
Diallo, M. F. (2012). Retailers’ internationalization in emerging markets: A comparative study of a French and a local retailer’s key success factors in Brazil. International Business Research, 5(10), 91-99.
Evans, J., Bridson, K., Byrom, J., & Medway, D. (2008). Revisiting retail internationalisation: Drivers, impediments and business strategy. International Journal of Retail & Distribution Management, 36(4), 260-280.
Feldmann, F. (2016). Factors of Success and Failure for International Retailers in Poland. Journal of Management and Business Administration, 24(3), 2-22.
Gomes, R. M. D. A. B., Carneiro, J., & Kogut, C. S. (2017). Case studies in the retailer internationalization: a literature review, Internet-Review of International Business,12(1), 16-32.
Hutchinson, K., Quinn, B., Alexander, N., & Doherty, A. M. (2009). Retailer internationalization: overcoming barriers to expansion. The International Reviewof Retail, Distribution and Consumer Research, 19(3), 251-272.
Lin, H. F., & Chang, K. L. (2017). Key success factors of international market development: An empirical study of the Taiwan bulk shipping industry. Maritime Business Review, 2(2), 79-98.
Sahney, S. (2015). Critical success factors in online retail–an application of quality function deployment and interpretive structural modeling. International Journal of Business and Information, 3(1).144-163