Discount Retail Internationalisation: Barriers to the Deployment of Glocalisation

Abstract

The standardisations/adaptation theme is amongst the most debated within International Retailing. Much research has attended to the question of whether an MNC should adapt to local market needs or, if instead, it should emphasise the upholding of global standards to reap efficiencies. Within this debate there is much focus on resonating to market needs but less on the inheritance, history and structure of the MNC and how this affects the ability to adapt or standardise, or indeed to do both by applying the glocalisation theme. Existing research has placed less emphasis on how the MNC might be biased towards either standardising or adapting regardless of market conditions. Central to this debate is the transfer of a retail formula. It is commonly understood that the faithful replication of a retail formula means that each element of the marketing mix is copied ‘as is’ from home to host country. This can at best be a benchmark as no MNC would be able to completely copy a home-derived standard to the host market, however, some retail concepts are generically better able to perform this ideal act than others. They would attempt to standardise as much as possible, adopting a strategy that maximises replication as it seeks not to duplicate resources across borders. The key point in this attempt is whether it does so out of recognising that differences are insignificant, or if it does so because it is unable to see that the differences do matter. Seen from an institutionalisation perspective and, initially looking at the home-derived context only, one recognises the well-defined relationship and interaction between MNC and consumer culture and the position the MNC has obtained in terms of brand strength and success. It is easy to see that context will be different in the host market, but difficult to take this into account when transferring the retail formula out of the home context. More recent literature on embeddedness has addressed some of these linkages and influences which affect the way MNCs transfer their retail concepts, but the literature fails to recognise the full impact. The structural paradox embodies some of the dilemma in this discussion as it addresses the conflict between transferred operational structure and the need to adapt locally to market needs. The glocalisation theme approaches the same dilemma from a competency perspective but does not embrace what stops the MNC from being more adaptive. This research develops a model that aims to combine these perspectives. This model is deployed to three cases, all detailing the transfer of a highly standardised retail concept, hard discounting, which is an ideal platform to explore how home-derived structure is transferred and how it deals with trans-contextual dimensions across borders. The research looks critically and in-depth at how the standards applied impact on the levels of awareness paid towards the need to adapt to trans-contextual dimensions and seeks evidence that demonstrate how attention to the differences become vital to success. At the same time, the cases illustrate that the differences may alter, but the approach taken towards them remain the same. The model defines this approach as a strategic trajectory called ‘MaxRep’, which is developed out of the home context and remains aligned to this particular foreign context when transferred in on the host settings. The benchmarking of this approach against the glocalisation theme leads to the identification of gaps and definition of action to be taken to overcome these barriers to applying effective glocalisation.