Revista Tinerilor Economiºti (The Young Economists Journal)

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Management – Marketing - Tourism - Increase of the value of imported goods not liable to customs clearance from 100 to 300 CHF (€60 – 180); - Decline of consumer confidence in the Swiss local retailers; - Relatively high price difference between Swiss (expensive) and EU goods (cheap); - A shift of attitude of Swiss consumers in favour of EU-goods. We have also to include the costs of establishing new stores among the economic factors. Such costs are connected with the acquisition or leasing of sites for stores, and also with establishing them. Furthermore costs for various facilities such as outdoor provisions and parking lots are to calculate. Last not least communication efforts are to be financed in order to attract customers [Omar, 1999, p.35]. Even though costs of retail sites have been declining since 2008 they still are an important factor for every company. In 2009, the monthly rent for 100 square meters of retail space in Cluj-Napoca varied between €15 and 40 depending on the location (excluding VAT). According to real estate experts, retailer have to add maintenance costs (€2 – 2.5 per m 2 ) as well as a “marketing fee” of €1.5 – 3 per m 2 . The “marketing fee” includes the monthly cost of joint advertising and promotion conducted by the shopping center’s management. Retail space rents have declined by 40-70% from 2008 to 2010 [Botezatu, 2010; Roman, 2010]. 2. Political and legislative factors The legal framework set by the World Trade Organizations (WTO) - and even more important for Europe by the EU – enforces free trade, and opens new markets to national companies. In this regard, we emphasize the liberalization of world trade by agreements (GATT, GATS, TRIPS, WTA, ATC) of the WTO Member States, designed to lead to a comprehensive reintegration of world trade [Zentes, Swoboda, 2001, pp.11- 14] with industrial, agricultural, textiles (ATC), services (GATS) and intellectual property rights (TRIPS), and also with regional trade agreements. A stationary retailer may take advantage of different specific forms of operation when extending to foreign markets [Zentes, Ferring, 1995, pp.410-436; Zentes, Swoboda, Schramm-Klein, 2010, p.343]: - Foundation and development of subsidiary companies with offices (branches) in the foreign country; this is supposed to be the most successful form of intruding a foreign market; - Acquisitions of local retailers (acquisition strategy) or local retail chains. This accelerates to some extent the adaptation process to foreign markets and their specifics conditions. This includes knowledge of local competitors and their strengths, but also of specific habits, values and traditions of customers; the acquired local firms will have competence also with regard to suppliers and producers of goods. Furthermore no valuable time is lost for market research; some legal complications when starting off with new own offices may also be avoided. Acquiring local or national retailers can also be seen as a phenomenon of economic globalization, possibly connected with concentration of retail power. - Cooperation with local retailers (cooperative strategy) by development of franchise stores, granting of licenses or engaging in joint ventures. These situations can be the result of legal restrictions that prevent the establishment of representative offices or branches; a local partner may also be preferred due its potential easier access to some raw materials or technologies. For example, Metro, the second European retailer according to turnover, preferred to penetrate the Chinese market 65
Revista Tinerilor Economişti (The Young Economists Journal) through a joint venture. In 1996 they did so, using the competence of the local retail chain Jinjiang. Currently, Metro operates over 20 stores in mainland China [***, Metro Handelslexikon 2010/2011, p.136]. In this context, the decision of extending to a foreign market concerns [Gielens, Dekimpe, 2007, pp.196-212]: - Timing and size of entry: the number of stores, their size, the length or depth of the assortment or the size of sales area; - Intra-organisational learning with respect to the company’s own internationalization experience; - Inter-organizational learning, in terms of foreign market competition; - Market dynamics with respect to the process of internationalization of competition. A retailer will also have to define its own degree of flexibility (or rigidity) in terms of differentiation (or standardization) in relation to the usual retail format in his home country. Within a “global” strategy (see Fig. 1), a retailer will have to choose either between standardization and differentiation. If standardizing, a retailer will copy his home business model in foreign markets. For example, he will offer the same range of assortment or use a similar communication strategy (Ikea, Benetton, and The Body Shop). He can also opt for a “multinational” orientation, adapting known strategies to specific needs of local or regional markets. In this sense he will have to change both composition and structure of assortment, the retail format, the price, and the communication tools used (Tengelmann, Rewe). Finally, he may decide to guide himself according to a “glocal” orientation, which means that he will use a common retailing format on an international level, however, with specific adaptations to local or national characteristics (Lidl / Schwarz, Carrefour, Wal-Mart) [Liebmann, Zentes, Swoboda, 2008, pp.270-275]. Assortiment different standardised Lidl Aldi Ikea Wal-Mart Douglas The Boldy Shop Carrefour Kaufland glocal orientation Schlecker Benetton global orientation (home country) standardised different Retail format Source: Liebmann, Zentes, Swoboda, 2008, p.273. Figure 1. Standardization versus differentiation of retailers according to assortment If a retailer chooses internationalization, he will have to take into consideration 66 Ahold Rewe multinational orientation Tengelmann Kingfisher
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What is happened when the rules are
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THE IMPORTANCE OF COMMUNICATION IN
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ISSN 1583-9982
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Revista Tinerilor Economiºti (The Young Economists Journal)

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