The first block is customer satisfaction, says Sato. “It is not easy to grasp that consumer needs in a host country are quite different from a home country’s consumer needs in terms of economic, social and cultural environment,” he explains. “J.C. Penney failed in adjusting their products to the physical size of Japanese people. In the case of Wal-Mart’s own-label products, they failed because of the differences in consumer tastes as well as the problem of product size.”

The second hurdle, according to Sato, is about the applicability of ‘transported’ management resources and business processes, which, despite being ‘strengths’ in the home terrain, fail to take off in the host country. To resolve this, some retail giants depend on local wholesalers and, in the process, sacrifice competitive power.

The third problem is of ‘whether responding to customer needs, and creating a suitable retail mix’ end in wins. For example, Sephora’s category-killer type of business model that demonstrated great competitive advantages in the US and Europe was unrealisable in Japan, recounts Sato.

Instructive anecdotes.

D. Murali

http://BookPeek.blogspot.com

More Stories on : Books | Retailing | Book Mark

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page