Problem
As noted in your text as well as in your simulation activities, there are numerous advantages and opportunities for retailers who expand across national boundaries. But, as is often true, the higher the potential reward, the higher the potential for loss.
The following video shows what happens when a global retailer gets it wrong. When Target entered the Canadian market, it had high hopes. Things went horribly wrong and after just two years, they closed up shop.
YouTube Video: "Why Target Failed In Canada - Cheddar Examines".
Choose any retailer who operates in more than one country and answer the following:
A. Identify the retailer and its most recent annual worldwide sales.
B. Identify the home country and the foreign market in which it also operates.
C. Identify the type of retail operation. An Internet search will guide you to numerous examples, including department stores, specialties, supermarkets, etc. Briefly explain why this type of retail operation applies to the firm you chose.
D. What advantage did the new country gain when the global retailer entered its market? Be sure to note the advantage to the country it entered, not the advantage to the firm.
E. What competition does your retailer face in the new country market?
F. Many factors prompt a retailer to expand across national boundaries. Which of the following factors do you think is the reason why your chosen retailer chose to expand? Though more than one may apply, choose the one you feel is the most important. Support your answer.
a. Saturation of the home country market
b. Recession/other economic problems in the home market
c. Strict regulation on store development in the home country
d. High operating costs in the home market
e. Other - be sure to clearly identify