GGR252H1 Lecture Notes - Lecture 7: Market Saturation, Franchising, Circuit City Corporation

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Published on 16 Apr 2013
School
UTSG
Department
Geography
Course
GGR252H1
Invasion of the Retail
Push Factor
Perceived “ saturation “ of the home market – point where you are not able to
grow
o Heavy competition
o Lack of growth
o Your taking market share away from your own retail sources
US economy recovery?
o Circuit city big competition for best buy they over bought , so they
had to close down
Restrictive regulatory environment
Pull Factors
Lack of market saturation
o Underdeveloped retail sector
o Long-term growth
Relatively lax, inviting regulatory environment
Emerging markets
o Greatest opportunity perceived to be in emerging markets0 China,
Brazil, Central and Eastern Europe
Main Modes of Entry into Foreign Markets
1. Organic Growth
a. Hierarchal diffusion
i. Opening of new stores from larger cities to smaller towns
b. Contagious Diffusion
i. The stores are established in a disperse pattern from aa single
location
c. Mix
i. Once an organization has reached a certain size , the organic
growth can be a combination of the two previous strategies
2. Mergers, Acquisitions and Takeovers
a. Merger
i. Combination of two or more firms to form a new single
company
b. Acquisition
i. When one firm purchases more than fifty percent of the shared
capital or asset of another firm (very similar to them)
Ex. Best buy acquired future shop, Victoria Secret and La Senza
c. Takeover
i. A larger firm acquires a smaller company while keeping the
company in existence
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Document Summary

Perceived saturation of the home market point where you are not able to grow: heavy competition, lack of growth, your taking market share away from your own retail sources. Us economy recovery: circuit city big competition for best buy they over bought , so they had to close down. Lack of market saturation: underdeveloped retail sector, long-term growth. Emerging markets: greatest opportunity perceived to be in emerging markets0 china, The csca considers retail conglomerates that meet or exceed the 100 million dollars in revenue threshold. However, certain retailers who do not meet this sales value do exist within the list of leading retailers. 57 ( or 47%) of th top 11 lrcs foreign owned and operated the flrcs: 85 billion, 11,2000 stores accounted for just over 40%of the total lrcs sales. Flrcs: 95% sales come form us based retailers, 9, 9000 stores. Walmart , costco , safeway , nrdc, the home depot.

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