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Regional Business Networks and the Multinational Retail Sector

Author

Listed:
  • Stephane J.G. Girod

    (Said Business School, University of Oxford)

  • Alan M. Rugman

    (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)

Abstract

In this paper we examine the network relationships of a set of large retail multinational enterprises (MNEs). We analyze under what conditions a flagship-network strategy (characterized by a network of five partners – the MNE; key suppliers; key partners; selected competitors; and key organisations in the non-business infrastructure) explains the internationalisation of three retailers whose geographic scope, sectoral conditions and competitive strategies differ substantially. We explore why and when retailers will adopt a flagship strategy. The three firms are Tesco and The Body Shop, two U.K.-based multinational retailers, and Moet Hennessy Louis Vuitton (LVMH), a French-based global retailer. We find evidence of strong network relationships for all three retailers, yet they embrace network strategies for different reasons. Their flagship relationships depend on each retailer’s strategic use of firm-specific-advantages (FSAs) and country-specific advantages (CSAs). We find that a flagship strategy succeeds in overcoming internal and/or environmental constraints to cross-border resource transfers, which are barriers to foreign direct investment (FDI). We provide recommendations on why and when to use a flagship-based strategy and which type of network partners to prioritize in order to succeed internationally.

Suggested Citation

  • Stephane J.G. Girod & Alan M. Rugman, 2005. "Regional Business Networks and the Multinational Retail Sector," Working Papers 2005-11, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    • Handle: RePEc:iuk:wpaper:2005-11
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    File URL: http://kelley.iu.edu/riharbau/RePEc/iuk/wpaper/bepp2005-11-girod-rugman.pdf
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    Citations

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    Cited by:

    1. Tania Gorcheva, 2020. "Processes Of Intelnationalization Of The Tourist Business In Bulgaria," Anniversary Scientific Conference with International Participation TOURISM AND CONNECTIVITY 2020, University publishing house "Science and Economics", University of Economics - Varna, issue 1, pages 259-265, October.
    2. Viktor Fredrich & Siegfried Gudergan & Ricarda B. Bouncken, 2022. "Dynamic Capabilities, Internationalization and Growth of Small- and Medium-Sized Enterprises: The Roles of Research and Development Intensity and Collaborative Intensity," Management International Review, Springer, vol. 62(4), pages 611-642, August.
    3. Oh, Chang Hoon & Sohl, Timo & Rugman, Alan M., 2015. "Regional and product diversification and the performance of retail multinationals," Journal of International Management, Elsevier, vol. 21(3), pages 220-234.
    4. Dirk Ulrich Gilbert & Patrick Heinecke, 2014. "Success Factors of Regional Strategies for Multinational Corporations: Exploring the Appropriate Degree of Regional Management Autonomy and Regional Product/Service Adaptation," Management International Review, Springer, vol. 54(5), pages 615-651, October.
    5. Felício, J. Augusto & Meidutė, Ieva & Kyvik, Øyvin, 2016. "Global mindset, cultural context, and the internationalization of SMEs," Journal of Business Research, Elsevier, vol. 69(11), pages 4924-4932.
    6. Tania Gorcheva, 2020. "Degrees in the internationalization of the Bulgarian tourism business," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 27-48.
    7. Lee, In Hyeock (Ian) & Hong, Eunsuk & Makino, Shige, 2020. "The effect of non-conventional outbound foreign direct investment (FDI) on the domestic employment of multinational enterprises (MNEs)," International Business Review, Elsevier, vol. 29(3).
    8. Sara Melén Hånell & Emilia Rovira Nordman & Daniel Tolstoy, 2017. "New product development in foreign customer relationships: a study of international SMEs," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 29(7-8), pages 715-734, August.
    9. Mark Casson, 2007. "Multinational Enterprises: Their Private and Social Benefits and Costs," The World Economy, Wiley Blackwell, vol. 30(2), pages 308-328, February.
    10. Henry Wai‐Chung Yeung, 2009. "Transnational Corporations, Global Production Networks, and Urban and Regional Development: A Geographer's Perspective on Multinational Enterprises and the Global Economy," Growth and Change, Wiley Blackwell, vol. 40(2), pages 197-226, June.
    11. Viqar Ali Baig & Javaid Akhtar, 2011. "RETRACTED: Supply Chain Management: Value Configuration Analysis Approach," Vision, , vol. 15(3), pages 251-266, September.
    12. Felício, José Augusto & Duarte, Margarida & Rodrigues, Ricardo, 2016. "Global mindset and SME internationalization: A fuzzy-set QCA approach," Journal of Business Research, Elsevier, vol. 69(4), pages 1372-1378.
    13. Augusto Felício, J. & Caldeirinha, Vítor R. & Ribeiro-Navarrete, Belen, 2015. "Corporate and individual global mind-set and internationalization of European SMEs," Journal of Business Research, Elsevier, vol. 68(4), pages 797-802.
    14. Lee, In Hyeock & Paik, Yongsun & Uygur, Ugur, 2016. "Does Gender Matter in the Export Performance of International New Ventures? Mediation Effects of Firm-specific and Country-specific Advantages," Journal of International Management, Elsevier, vol. 22(4), pages 365-379.
    15. Swoboda, Bernhard & Morbe, Lukas & Hirschmann, Johannes, 2018. "International strategy’s effects on retailers’ local implementation and performance," International Business Review, Elsevier, vol. 27(3), pages 642-653.
    16. Ana Colovic & Ulrike Mayrhofer, 2010. "Optimizing the Location of R&D and Production Activities: Trends in the Automotive Industry," European Planning Studies, Taylor & Francis Journals, vol. 19(8), pages 1481-1498, November.
    17. Casson, Mark & Porter, Lynda & Wadeson, Nigel, 2016. "Internalization theory: An unfinished agenda," International Business Review, Elsevier, vol. 25(6), pages 1223-1234.
    18. Ronald S Wall & Martijn J Burger & G A (Bert) van der Knaap, 2011. "The Geography of Global Corporate Networks: The Poor, the Rich, and the Happy Few Countries," Environment and Planning A, , vol. 43(4), pages 904-927, April.
    19. Sikka, Prem, 2011. "Accounting for human rights: The challenge of globalization and foreign investment agreements," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 22(8), pages 811-827.
    20. R.S. (Ronald) Wall, 2009. "The Relative Importance Of Randstad Cities Within Comparative Worldwide Corporate Networks," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 100(2), pages 250-259, April.

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