IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2020i17p7170-d407848.html
   My bibliography  Save this article

Transnational Corporation’s Failure in China: Focus on Tesco

Author

Listed:
  • Kim Woohyoung

    (Graduate School of Technology Management, Kyunghee University, Yongin, Gyeonggi-do 17104, Korea)

  • Hyun Kim

    (Sejong University, 98 Gunja-Dong, Gwangjin-Gu, Seoul 143-747, Korea)

  • Jinsoo Hwang

    (The College of Hospitality and Tourism Management, Sejong University, 98 Gunja-Dong, Gwangjin-Gu, Seoul 143-747, Korea)

Abstract

Many of the foreign companies operating in China have claimed that they have failed and are constantly deciding on a strategic withdrawal from the Chinese market. We intend to conduct an empirical analysis of Chinese consumers in order to determine the cause of Tesco’s management failure in China. The survey was conducted on those in their 20s or older who had experience shopping at both Tesco and RT-Mart. As a result, a total of 650 copies were distributed to obtain an effective sample of 607 copies, which was used for the analysis. This paper conducted a comparative analysis on Chinese consumers who visited both Tesco and its rival company RT-Mart in China. We found through comparative analysis that Tesco was destined to fail in many areas. It was estimated that RT-Mart was more satisfactory in all factors, including product, location, brand recognition, and employee service.

Suggested Citation

  • Kim Woohyoung & Hyun Kim & Jinsoo Hwang, 2020. "Transnational Corporation’s Failure in China: Focus on Tesco," Sustainability, MDPI, vol. 12(17), pages 1-11, September.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:17:p:7170-:d:407848
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/17/7170/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/12/17/7170/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chinmay Pattnaik & Jeoung Yul Lee, 2014. "Distance and divestment of Korean MNC affiliates: the moderating role of entry mode and experience," Asia Pacific Business Review, Taylor & Francis Journals, vol. 20(1), pages 174-196, January.
    2. Daniele Pederzoli, 2006. "Conception and test of a comprehensive model of international strategy for retail companies," Post-Print hal-00577886, HAL.
    3. Gabriel R. G. Benito, 2005. "Divestment and international business strategy," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 235-251, April.
    4. Monroe, Kent B & Guiltinan, Joseph P, 1975. "A Path-Analytic Exploration of Retail Patronage Influences," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 2(1), pages 19-28, June.
    5. Shin, Sanghyup & Kim, Hyun & Kim, Woohyoung, 2020. "Transnational corporations’ localization strategies via retail attributes: Focus on Chinese market," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    6. Jean J Boddewyn, 1979. "Foreign Divestment: Magnitude and Factors," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 10(1), pages 21-26, March.
    7. Jean J Boddewyn, 1983. "Foreign and Domestic Divestment and Investment Decisions: Like or Unlike?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 14(3), pages 23-35, September.
    8. Borde, Stephen F. & Whyte, Ann Marie & Wiant, Kenneth J. & Hoffman, Lorrie L., 1998. "New evidence on factors that influence the wealth effects of international joint ventures," Journal of Multinational Financial Management, Elsevier, vol. 8(1), pages 63-77, January.
    9. Woohyoung Kim & Alan George Hallsworth, 2016. "Tesco in Korea: Regulation and Retail Change," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 107(3), pages 270-281, July.
    10. Burt, Steve & Coe, Neil M. & Davies, Keri, 2019. "A tactical retreat? Conceptualising the dynamics of European grocery retail divestment from East Asia," International Business Review, Elsevier, vol. 28(1), pages 177-189.
    11. Woohyoung Kim & Alan Hallsworth & Hyun Kim, 2018. "Examining the Effectiveness of Government Policy for Retail Districts: Evidence from Korea," Sustainability, MDPI, vol. 10(5), pages 1-15, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jungseok Choi & Woohyoung Kim & Seokkyu Choi, 2021. "The Economic Effects of China’s Distribution Industry: An Input-Output Analysis," Sustainability, MDPI, vol. 13(6), pages 1-13, March.
    2. Sarmann I. Kennedyd & Rob Kim Marjerison & Yuequn Yu & Qian Zi & Xinyi Tang & Ze Yang, 2022. "E-Commerce Engagement: A Prerequisite for Economic Sustainability—An Empirical Examination of Influencing Factors," Sustainability, MDPI, vol. 14(8), pages 1-24, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ozkan, Kubilay S.L., 2020. "International market exit by firms: Misalignment of strategy with the foreign market risk environment," International Business Review, Elsevier, vol. 29(6).
    2. Schmid, David & Morschett, Dirk, 2020. "Decades of research on foreign subsidiary divestment: What do we really know about its antecedents?," International Business Review, Elsevier, vol. 29(4).
    3. Alex Mohr & Georgios Batsakis & Zita Stone, 2018. "Explaining the effect of rapid internationalization on horizontal foreign divestment in the retail sector: An extended Penrosean perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(7), pages 779-808, September.
    4. Laura Resmini & Giuseppe Vittucci Marzetti, 2020. "Home bias in divestment decisions of multinational corporations in the EU," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 799-813, August.
    5. Dirk Engel & Christoph M. Schmidt & Vivien Procher, 2010. "The Asymmetries of a Small World: Entry Into and Withdrawal From International Markets by French Firms," Ruhr Economic Papers 0192, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    6. Brown, T. & Panibratov, A., 2016. "Foreign divestment decisions: A theoretical framework," Working Papers 6450, Graduate School of Management, St. Petersburg State University.
    7. Engel, Dirk & Procher, Vivien & Schmidt, Christoph M., 2013. "Does firm heterogeneity affect foreign market entry and exit symmetrically? Empirical evidence for French firms," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 35-47.
    8. Li Dai & Lorraine Eden & Paul W. Beamish, 2023. "The timing and mode of foreign exit from conflict zones: A behavioral perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(6), pages 1090-1104, August.
    9. Viacheslav Iurkov & Gabriel R G Benito, 2020. "Change in domestic network centrality, uncertainty, and the foreign divestment decisions of firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(5), pages 788-812, July.
    10. Luíza Neves Marques Fonseca & Angela Rocha, 2023. "Setbacks, interruptions and turnarounds in the internationalization process: a bibliometric and literature review of de-internationalization," Management Review Quarterly, Springer, vol. 73(3), pages 1351-1384, September.
    11. repec:zbw:rwirep:0192 is not listed on IDEAS
    12. Engel, Dirk & Procher, Vivien & Schmidt, Christoph M., 2010. "The Asymmetries of a Small World: Entry Into and Withdrawal From International Markets by French Firms," Ruhr Economic Papers 192, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    13. Ryan W. Tang & Ying Zhu & Hongbo Cai & Jinrong Han, 2021. "De-internationalization: A Thematic Review and the Directions Forward," Management International Review, Springer, vol. 61(3), pages 267-312, June.
    14. Coudounaris, Dafnis N. & Orero-Blat, María & Rodríguez-García, María, 2020. "Three decades of subsidiary exits: Parent firm financial performance and moderators," Journal of Business Research, Elsevier, vol. 110(C), pages 408-422.
    15. Nguyen, Ha Thi Thu & Larimo, Jorma & Ghauri, Pervez, 2022. "Understanding foreign divestment: The impacts of economic and political friction," Journal of Business Research, Elsevier, vol. 139(C), pages 675-691.
    16. Laura Resmini & Giuseppe Vittucci, 2016. "Home country bias in divestment decisions of multinational corporations in the EU," ERSA conference papers ersa16p220, European Regional Science Association.
    17. Burt, Steve & Coe, Neil M. & Davies, Keri, 2019. "A tactical retreat? Conceptualising the dynamics of European grocery retail divestment from East Asia," International Business Review, Elsevier, vol. 28(1), pages 177-189.
    18. Swoboda, Bernhard & Olejnik, Edith & Morschett, Dirk, 2011. "Changes in foreign operation modes: Stimuli for increases versus reductions," International Business Review, Elsevier, vol. 20(5), pages 578-590, October.
    19. Maria Borga & Perla Ibarlucea Flores & Monika Sztajerowska, 2020. "Drivers of divestment decisions of multinational enterprises - A cross-country firm-level perspective," OECD Working Papers on International Investment 2019/03, OECD Publishing.
    20. Belderbos, René & De Michiel, Federico & Sleuwaegen, Leo & Wu, Shubin, 2021. "Global market integration, efficiency orientation, and drivers of foreign subsidiary divestments," Journal of World Business, Elsevier, vol. 56(5).
    21. Guopei Fang & Holger Görg & Aoife Hanley & Haiou Mao, 2022. "Foreign Divestment – Crisis or Chance for China's Innovation Edge?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(6), pages 1-33, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:12:y:2020:i:17:p:7170-:d:407848. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.