Lessons learned from unsuccessful internationalization attempts: examples of multinational retailers in Chile
Lessons learned from unsuccessful internationalization attempts: examples of multinational retailers in Chile
Bianchi C.C. and Ostale E. Journal of Business Research, January 2006, Vol. 59 No. 1, Start Page: 140, No. of pages: 8
Purpose – To consider why successful retailers can experience unsuccessful internationalization. Design/methodology/approach – Applies an institutional approach to identify and explore mistakes made by internationalizing retail firms. Explains that in a retailing context, this perspective suggests that every country has a set of relevant institutional norms to which retailers must conform in order to be perceived as legitimate. Presents data from four case studies of international retailers that failed in Chile: Carrefour, Home Depot, Royal Ahold and J C Penney. Provides an overview of the retail industry in Chile, together with a brief outline of the business of each of the foreign retailers. Reports on five main themes emerging from interview data and comments on common mistakes made by each of the four retail firms. Findings - Discusses retail practices and formats, noting that each of the international retailers standardized several elements of the format. Presents quotes from consumers suggesting that these companies did not consider whether their model of retailing required adjustment for Chile. Finds that the Greenfield strategy used by Carrefour and J C Penney to enter the foreign market was a mistake, giving reasons to support this view. Discusses operating costs and logistics, the selection of retail executives and their relationships with the business community, suppliers, competitors and other retail executives and the response of local competitors to the new entrants. Practical implications– Concludes that the companies failed to achieve legitimacy and support from relevant social actors. Originality/value – Demonstrates that retail internationalization depends on how well firms conform to the relevant retailing norms in the countries where they operate.ISSN: 0148-2963Reference:35AA846
Keywords: Company failures, International trade, Market entry,Retailing
