RMG 200 Lecture Notes - Lecture 7: Ikea

• School: Ryerson University
• Department: Retail Management
• Course: RMG 200
• Professor: Ken Wong

Document Summary

Retailers engage in international ventures for many reasons: Saturated home marketplace with no room to grow. Aging population that spends less and saves more. High operating costs including staff wages, rental costs, and taxes. Successful global retailers build on core competencies: global culture: a company embracing a multicultural perspective and developing an infrastructure that makes maximal use of local management, deep pockets: considerable financial resources that enable companies to make strategic decisions such as expansion into international markets, requiring significant and ongoing financial commitment often at the expense of short term profit. Entrant has limited control over the retail operations in the foreign county, potential profit is reduced, and the risk of assisting in the creation of a local domestic competitor is increased: m&a + greenfield operation. Decision on a region, trade area within that region, and a specific site.