Meaning of Retail International operations

John Dawson has defined international retail operations, as the operations by a single firm of shops or other forms of retail distribution, in more than one country.

Internationalization of retailing has also been defined as the management of retail operations in markets which are different from each other in their regulation economic development, social conditions, cultural environment and retail structures.

Yet another perspective is given by David Gilbert who suggests that retail internationalization is the process of a retailer transferring its retail operations, concept, management expertise, technology and / or buying function across national borders.

Thus, the concept of internationalization varies from the concept of trade in the domestic market as it involves firstly, a difference in the political boundaries of trade. The second element involved is that of exchange rate or a difference in the currency of trade. The third important element is that of a different regulatory political and economic scenario as compared to the domestic market. A difference in the culture and the structure of retail also needs to be understood by the company which wishes to tap international markets. Tread gold attempted to identify the types of international retailers and the same is featured in,
‘Tread gold’s typology of International retailers’

1) This group is distinguished by the high control ii the international market and a limited international market presence.
2) The companies in this cluster operate in the markets which are either culturally or geographically proximate

*Emboldened Internationalists: In this group, retailers continue to exercise high
control and therefore, incur high entry costs but have through the longevity of their international expansion, begun to move into markets which are remote – both culturally and geographically
*Aggressive Internationalists: Though this group also exercises a high level of control over operations, they expanded into a wide variety of markets.
* World Powers: This group uses low control method for market entry and has a presence in a very high number of markets around the world.

Apart from Tread gold’s typology, a large number of frameworks exist to examine motivational and strategic aspects of internationalization. Salmon and Tordjman suggested a distinction between different international retail strategies (global, multinational and investment)

Another construct which seeks application in the arena of international retail is the eclectic paradigm. Although the eclectic paradigm (or the eclectic theory as it was initially called) of international production was first put forward by John Dunning at a Nobel Symposium in Stockholm in 1976, its 1976, its origins an be traced back to the mid-1950s when the author tried to analyze the difference shown between the labor productivity in US manufacturing industry as compared to the UK industry. The question this fact posed in the author’s mind was: was this difference in productivity a reflection of the superior indigenous (and immobile) resources of the US (cf of UK) economy; or was it due to the more proficient way in which the managers of US firms (cf UK firms)harnessed and organized these resources.

The eclectic paradigm asserts that for a firm to invest abroad, it must posses (or able to acquire) some sort of ownership specific advantage not available or not available at the same cost to other competing firms. Theses ownership advantages are other either derived from the privileged possession of specific intangible assets such as superior technology, efficient production processes, marketing systems etc., or from the common governance of a set of interrelated activities (at home or abroad) (Or) Additionally, ownership advantages may be acquired through the conclusion of successful alliances with other firms. While the ownership advantages of the eclectic paradigm are firm specific, the fact that they originate in some countries rather than others, may reflect the structure of competitive advantages which are external to firms but internal to nations.

Helfferich and others analyzed the information put together by other academics in the defining various types of international activities and put forth and arrived at what can be termed as a terminology forth trade.