IS 25-48

- Walmart is the largest retailer worldwide; even larger than than most countries, compared to gross national income. 国民总收入

composition / where are they come from / internationality : (2015)

- USA (79%)

- Japan (31%)

- Germany (17%)

- China has lots of small players due to the fragemented market

category:

- FMCG Fast Moving Consumer Goods 快速消费品 retailer only operate in few countries (138 of 250)

- Fashion retailer sell in large number of countries

- Consumer goods: Food and berverages have the largest turnover: India 60& in Germany 39%, which is due to the level of income: the lower the level of income, the more is spent on the essentials

1. Amazon / Brick and Mortar

2. Almost no relevance: Only if you need mass and have a strong competitor: Enter all relevant markets at the same time

3. Most often used: Combination: Sometimes many countries at once sometimes step by step

2)Market entry: Selective model. Most often used: Combination - Sometimes enter many countries at once, sometimes step by step.

1st wave: Early 90s: 50-60% modern retail market share – South America, East Asia (not Japan, China), North-Central Europe, South Africa (earlier entry, bigger market share)

2nd wave: Mid late 90s: 30-50% market share: Mexico, Central America, South East Asia (Indonesia), South-Central Europe

3rd wave: Early 2000s: 1-20% market share: China, Eastern Europe, Russia, India

 4th wave: Late 2000s: South Asia (outside India), Poor South East Asia, Sub Sahara

Conclusion: NOT REALISTIC

-        It does not deal with restistance from the former sector

- 它没有处理来自前部门的阻力

-        Does not show indigenous sector

- 没有显示本土部门

Retailer taking over the South Asian continent is too simplisitc, you always have national champions of informal sector which cannot be replace so easily

x - market attractiveness: large population, growing market etc., low amount of competitors

y - market entry barriers: country risks, political instability, instable trade etc., regulations, legal risks, existing competitors

take care of y-aixs, high to low!

Opportunity markets: Low market entry barriers but also low market attractiveness

Core markets: That’s what we are looking for! Market very attractive and low market entry barriers (China, India, Malaysia)

Hope markets: High market attractiveness but also high market entry barriers

Longtail strategy: companies to realize significant profits, by focusing on targeting niche markets 利基市场/小众市场 and catering to a wide range of specialized products or services, instead of solely focusing on mainstream, high-demand offerings.

alternatives:

-  Cost leader strategy: offer products or services at a lower cost compared to competitors, targets to price-sensitive customers. 成本领先战略, e.g. Walmart, McDonald's

-  Differentiation Strategy: offer unique and distinctive products or services that stand out from competitors. Businesses focus on creating a competitive advantage through innovation, quality, branding, or customer experience. 差异化战略, e.g. Apple (innovation in products design)

why important?

Because it is more efficient, leads to more transactions (expansion of customer base)  and to more sustainability

Uppsala model: → Amazon

Because Amazon’s business model is not that of a “born global”, it is not the new venture thory. It requires world class logistics and e-commerce affinity from the customer base. It expands from US, and then gradually enter into new different markets.

Cage distance framework developed by Ghemawat identifies differences between countries that companies should consider in internationalization.

- used to analyze foreign market environments

- four aspects: Cultural distance, economic distance, administrative distance, geographic distance

compared with the US:

yes, there are several as follows:

1. first entered developed countries with large economic size and then gradually moved to emerging markets

2. mode of entry: wholly owned subsidiaries using greenfield investment or acquisition of local firms

3. started to sell books or other media related products as an initial business, then slowly expanded product line

4. international expansion is consistent with the uppsala model, start their global expansions in places with lower psychic distances (cage distance framework)

5. exhibited a high level of national responsiveness in various countries

greenfield investment: 也叫创建投资，指跨国企业在投资目的地国家设立子公司

1.首先进入经济规模大的发达国家，然后逐渐转向新兴市场

2.进入模式：利用绿地投资或收购当地公司的全资子公司

3.开始以销售图书或其他媒体相关产品作为初始业务，然后慢慢扩大产品线

4.国际扩张与乌普萨拉模式一致，在心理距离较低的地方开始全球扩张（CAGE）。

5.在各个国家表现出高度的国家响应能力

Distribution system in Japan is complex and multi-layered:

product flow: manufacturer - primary wholesaler - secondary wholesaler - territory wholesaler - retailer - customer

Historically formed, highly culture-specific

Distribution system is protected by Japanese government

 Wholesalers were forced to specialize

 Difficult for new entrants

General trading companies (GTC) are responsible for most part of foreign sale: highly concentrated and competitive

 High importance of wholesale layers

 Wholesale 批发 is at the same time inefficient

 Manufacturers, wholesalers and retailer are furthermore

closely working together

A Keiretsu is an „Obligational relationships based on trust and goodwill“.

- A Keiretsu is a horizontal or vertical group, alliance or network of multiple market actors with the target to boost each others success.

- Equity shares are hold and long-term trade relationships are established.

Main idea:

- Long-term trade relationship

- Everyone, who is participating gets something out of that

What is the outcome with regard to international business? / And what does it have to do with international trade? 它与国际贸易的关系？

-> If the int. company cannot provide a benefit for the whole Keiretsu, there will be no business relationship.

-> Keiretsu concept becomes very important, when int. companies want to enter the market, because the largest 158 players in the Japanese market cover 80% of Japanese Im- and Exports (à They are kind of the “Gate-Keepers”)

-> Whenever an international company wants to enter the Japanese market and tries to cooperate with a Japanese partner, this partner will ask “I am part of the Keiretsu. How is our partnership beneficial for all the other Keiretsu-participants?”

Culturally business in Korea is conservative – risk is averted in favour of security = ‘Chaebol’; Conglomerate of different companies and industries, hold together by family ties. 韩国的商业文化是保守的——为了安全而规避风险=“财阀”； 不同公司和行业的联合企业，通过家族纽带联系在一起。

A Chaebol refers to a large, family-controlled conglomerate or business group in South Korea.

2,3 Q:

Chaebol internal transactions reach a value of approximately 150 b,. € per year. It can be inequable but it works like this and it’s extremely powerful. But Chaebol is also accused to corruption scandal in politics by abusing her position of power spread to the highest levels in Samsung, the most powerful Korean industry in Chaebol. However, Chaebol’s leaders have successfully still managed to run conglomerates from a prison cell before (after release and pardons by presidential order).

Territorial embeddedness: retailers should be highly responsive to local variations in consumption, property markets and supply

领土嵌入性——零售商应高度响应当地消费、房地产市场和供应的变化

Three dimensions:

1. Consumer markets and cultures

2. Logistical and supply networks

3. Real estate markets and land-use

→ Hybridazation is to find the balance between enforcing standardization at the supranational level and the need to conduct localization to establish embeddedness (mix between standardization & adapting)

→ 混合是在超国家层面实施标准化与进行本地化以建立嵌入性的需要之间找到平衡（标准化与适应的混合）

1. Land and property laws: Laws governing the various forms of ownership in real property

2. Competition laws: Laws promoting competition and prohibiting unfair trade practices, and generally encompassing anti-trust and consumer protection laws

3. FDI laws & policies: Laws governing movement of capital across national frontiers in manner that grants investors control over acquired assets -cover both greenfield investments and acquisitions

4. Shareholder equity requirements: Rules on specific equity thresholds for TNCs to participate in the host countrys retail sector

5. Minimum capital requirements: Rules on specific capital requirements of a firm to participate in the retail sector

6. Advance applications for new outlets: Rules on specific equity and related requirements for any firms to participate in the retail sector

1. 土地和财产法：管辖各种不动产所有权形式的法律

2. 竞争法：促进竞争和禁止不公平贸易行为的法律，通常包括反垄断法和消费者保护法

3. 外商直接投资法律和政策：管理跨国资本流动的法律，赋予投资者对所收购资产的控制权——涵盖绿地投资和收购

4. 股东股权要求：跨国公司参与东道国零售业的具体股权门槛规则

5. 最低资本要求：企业参与零售行业的具体资本要求的规定

6.新店提前申请：企业参与零售行业的具体股权及相关要求的规定

→ To build larger stores a long lasting authorization process has been introduced, including catch-22 requirements, like e.g. ‘submit a business plan to local business regulation council (consisting out of local retailers), to show the impact for local business’.

→ 为了建立更大的商店，引入了持久的授权流程，包括第 22 条军规要求，例如 “向当地商业监管委员会（由当地零售商组成）提交商业计划，以显示对当地企业的影响”。

Retail-TNCs use strategic divestment and asset redeployment methods to build market share and sustainable advantage: regulatory authorities observe and prohibit such moves to extract monopolistic/oligopolistic excess profits.

零售跨国公司利用战略性撤资和资产重新配置方法来建立市场份额和可持续优势：监管机构观察并禁止此类行为以获取垄断/寡头超额利润。

Result: consistent pressure towards re-regulation – attempts to re-impose restrictions on inward retail-FDI, ownership and control, and market competition; to protect existing retail structures via land-use zoning restrictions, regulation of store opening hours, and permitted retail formats; and to impose codes of conduct on retailer-supplier relations;

结果：持续施压重新监管——试图重新对内向零售 FDI、所有权和控制权以及市场竞争施加限制； 通过土地使用分区限制、商店营业时间监管和允许的零售业态来保护现有零售结构； 并对零售商与供应商关系实施行为准则；

E.g. 12/ 2006 decision of the Slovakian Antimonopoly Office to block the ownership switch of Carrefour stores to Tesco in that country.

例如，2006 年 12 月，斯洛伐克反垄断局决定阻止该国家乐福商店所有权转让给乐购。

KIRANA store: is the small neighbourhood shop in India. 小社区商店

These small shops stocks up with wide range of groceries and daily need products like sanitary products, snacks, tobacco etc.

These kirana stores are also known as corner shops, C- store or convenience shop.

These convenience stores are also found at petrol pumps or gas station to satisfy the basic needs of consumer while travelling.

Currently 90% of the stores in India are KIRANA store

What is unorganized retail in this context?

• A lack of knowledge about

• Inventory control

• Supply Chain Management

• Government policies

• Taxation rules

• Standardisation of products

Market related obstacels for organizing retail:

-         Low level of automobile and refrigerator

-         Small homes with limited storage space

-         Poor transportation infrastructure

-         Unreliable electric power

-         Mom & pop store is a stone’s throw from customers’ homes – convenience.

-         Neighbourhood kirana stores also offerustomers short-term credit facility

-         The mom & pop stores offer home delivery even for small orders and single items.

-         The delivery boys are almost always the shop owners’ children or relatives.

-         Possibility to bargain

-         Personal relationships

FDI in retailing will be beneficial for the economy? Discuss!

FDI will lead to better products and services to the consumer at low costs? Discuss!

Organized retailers will create huge employment opportunities? Discuss!

1.      Van-Based Model 货车模型

-         stocked van travels to village with sales man who takes orders from the Kirana in the villages

-         stocks delivered real time

2.      Urban Extension Model 城市扩展模型

-         using the companies urban model and adding a separate distributor for rural markets

-         subsidy-driven: firm compensates distributor for additional expenses

3.      Wholesaler-driven Model 批发商驱动模式

-         wholesaler based out smaller town markets where rural retailers buy

-         wholesalers located mostly in small town with accessibility

1.      Hub-and Spoke Model 轮辐模型

 Company sets up hub-&-spokes in rural markets

 Hubs serviced by the co.,hub then services spoke, spoke services nearby 8-10 villages

❖ 公司在农村市场建立轴辐式网络

❖ 由公司提供服务的中心，中心然后服务辐射，辐射服务附近8-10个村庄

2.      Entrepreneur-based Model 企业家模式

 Setting up entrepreneur in a village which acts as decentralised distributor

 door-to-door salesforce

 Linked to nearest company stockist and buys stock on cash

❖ 在村庄设立企业家作为分散经销商

❖ 上门销售人员

❖ 与最近的公司库存商联系并以现金购买股票

3.      Collaborative Model 协作模式

 Alliance: Competing companies together distribute (cost sharing)

 Piggyback: provides platform to reach rural

❖ 联盟：竞争公司共同分配（成本分摊）

❖ 搭载：提供到达农村的平台

They could use：

1. wholesaler-driven,

2. urban-extension,

3. entrepreneur-based or collaborative model

direct sales would be better suited for rural consumers as they have little or no access to retail stores and also have more specific needs so salesforce would be better suited to explain the products and their specific features

直销更适合农村消费者，因为他们很少或根本无法进入零售店，而且也有更具体的需求，因此销售人员更适合解释产品及其具体功能

• To access local knowledge: FamilyMart is Japanese and China has unique features in culture, social norms etc.

• Logistical & supply networks: building an efficient distribution and logistic system that delivers the merchandise from vendors through stores, to customers

• Real estate markets and land use: building and managing partnerships with city planners, local government, property developers and financial investors

- 获取当地知识：FamilyMart是日本的，中国在文化、社会规范等方面都有独特之处。

- 物流和供应网络：建立高效的分销和物流系统，将商品从供应商通过商店交付给客户

- 房地产市场和土地使用：与城市规划者、地方政府、房地产开发商和金融投资者建立和管理合作伙伴关系

- FamilyMart Japan disliked the expansion into Tier 2 and 3 cities, even though Ting Hsin had deemed the move imperative

- Overdue payment of the brand fee

- The opaque operation of the co-owned business

- The affiliated transaction between Ting Hsin and FamilyMart Convenience stores, which allegedly transferred away profits

- Lack of transparency

- 全家日本不喜欢向二线和三线城市扩张，尽管顶新认为此举势在必行

- 逾期缴纳品牌费

- 合资企业运营不透明

- 顶新与全家便利店关联交易，涉嫌利润转移

- 缺乏透明度

The online blocking and calls for customer boycotts were in response to H&M's September 2020 statement that it would no longer source cotton from Xinjiang because of concerns about forced labor.

H&M: relationship with a cotton supplier in China that was accused of forced labor with sourcing cotton from Xinjiang

How?

with a boycott against H&M:

• E-shop: no longer accessible

• Taobao shopping site: no H&M search results

• Closure of retail stores

• Alibaba & JD: removed H&M as a retailer from the platform

If H&M retracts its statements on Xinjiang, it will likely see increased sales in China, however its reputation can be damaged which can have negative effects on the sales in other markets. As China is a big market and the customers will probably forget about it, H&M should retract its statement.

如果H&M撤回有关新疆的声明，它在中国的销量可能会增加，但其声誉可能会受损，从而对其他市场的销售产生负面影响。 由于中国是一个大市场，消费者很可能会忘记它，H&M应该收回这一声明。v

Channel power is the ability of one channel member to get another channel member to do something it otherwise would not have done.

Channel power = ability to alter another organization’s behaviour – it’s a tool, neither good nor bad.

Five sources of power:

1. Consumer Search Loyalty = the tendency of consumers to consistently search for and purchase products or services from a particular company (consumers have developed a habitual behavior of relying on a specific brand without actively exploring alternatives on the market)

Example: Google - consumers consistently using Google as their preferred search engine due to its reliability, accuracy and familiarity

2. Market Share = the portion/percentage of total sales a company captures in a specific market (it can provide a company with competitive advantage, influence over industry dynamics, and increased bargaining power)

Example: Walmart - Walmart has unmatched access to the all-important end consumer: once a supplier sees a fourth to a third of their sales go through Walmart, walking away may not be a realistic option

3. Market Growth = How fast a specific company expands over time (making it a big competitor)

Example: Amazon - Amazon is far from a small player, but online still accounts for a fairly small percentage of CPG sales. And yet, the prospects for growth mean that many manufacturers are paying much more attention to Amazon than its current share of total CPG sales might warrant

4. Effective Differentiation = A company's ability to set itself apart from competitors by offering unique products, services, or features that meet customer needs in a distinct and valuable way (“real” differences with superior products or services, as well as “perceived” ones with brand or store image)

Example: Apple - Apple is a prime example of effective differentiation with its sleek design, intuitive user experience, and ecosystem integration, which sets it apart in the technology industry

5. Valued Resources = The greater the value to a channel member of resources controlled by a supplier, and the lower the availability of those resources from other suppliers, the more dependent the channel member is on the supplier, and the more powerful the supplier is

Example: Amazon - A company, which resources include physical infrastructure, intellectual capital and knowhow, scale that lowers costs, supplier or retailer brand equity, and customer data

Salesforce socialization refers to the process by which salespeople acquire the knowledge skill and values essential to perform their jobs.

Realism: Realism in the socialization process refers to providing an accurate portrayal of the job to the recruits. By achieving realism, organizations aim to give potential candidates a clear understanding of what the sales job entails and what their role would be within the company.

Realism can be achieved by providing accurate job descriptions and offering a job review through a field visit.

Congruence: Congruence refers to the matching of the capabilities and values of the recruits with the needs and values of the organization. It is about finding a fit between the individual and the company. Achieving congruence ensures that the new recruits align with the organization's goals, culture, and values.

Congruence can be achieved through proper screening and selection of candidates who fit the job and the organisation.

The sales training process is depicted as six interrelated steps: assess training needs, set training objectives, evaluate training alternatives, design the sales training program, perform sales training, and conduct follow-up evaluation.

Decisions companies face when evaluating sales training alternatives include:

-         Who will conduct the training (internal or external trainer)?

-         Where is the location for training? (field, office, central training location, virtually, at hotels and conference centers)

-         Which method(s) and media are best suited for conducting the training?

Most used training modalities include 4: Classroom/Conference Training, On-the-job Training, Behavioral Simulation, Absorption Training. The most effective training - Absorption Training?