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RMG 200 (57)
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Chapter 7

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Ryerson University
Retail Management
RMG 200
Ken Wong

RMG200 Chapter 7 Global Growth Opportunities Retailers engaged in international ventures for many reasons:  Saturated home marketplace with no room to grow  Highly competitive marketplace  Aging population that spends less and saves more  Economic recession, which limits consumer spending  High operating costs including staff wages, rental costs, and taxes  Restrictive policies on retail development  Shareholder pressure Key to success in Global Retailing  Globally sustainable competitive advantage o Most successful when the expansion opportunity is consistent with the retailer`s core bases of competitive advantage  o To recognize cultural differences and adapt their core strategy to the needs of local markets   o Long-term commitment and considerable upfront planning  o Retailers use production facilities located in developing economies for much of their private-label merchandise because of the very low labour costs in these countries o Other costs from sourcing include foreign currency fluctuations, tariffs, longer lead times and increased transportation costs International Market Entry Strategies - Direct Investment  Involves a retail firm investing in and owning a division or subsidiary that builds and operates stores in a foreign country  Highest level of investment and exposes to significant risks but has the highest
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