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This document is an article from The Economist newspaper, written on April 16th 2005,
entitled “Growing pains”. This article dealswith the difficulty for big local retailers chains, to
expand overseas.
Despite the success of those local retailers in their own countries, why have they difficulties
to expand abroad?
We have tosee first of all the local differences, and then we will see the financials
The article takes the examples of the famous retailers Wal-Mart (from America), Carrefour
(from France) andTesco (from Great-Britain).The first problem of expanding overseas is to
be able to adapt to the local culture. Indeed as the article said, “what works in a country does
not necessarily work inanother”. For instance, the biggest retailers Wal-Mart has difficulties
to expand in Japan because-the- Japanese associate low prices with poor quality. So the
discount concept cannot be export-ed- inall the countries. Moreover, Wal-Mart has problem
in his-its- own country,-the- United States, because it is a non-union firm which is a problem
there. We see also that local differences areimportant factor to expand overseas. In Great-
Britain, to conform to the market where Tesco is the number one, Wal-Mart created the Asda
chain so that-as- to be-a- competitor with the local market.
As forCarrefour which is the most international retailer, the losses it had overseas oblige himthem-
to quit some countries or to sell its-their- stores like he-they- did in Japan or in Mexico
wherehe-they- want to sell about twenty nine stores. Jose Luis Duran the chief executive of
Carrefour said that the retailer chain will quit all the stores where it isn’t among the best. Sir
Terry Leahy whois the boss of Tesco emphasized the fact that-it- is very difficult to create an
international retailing business.
As for Tesco, Sir Leahy said that the Asian market is future. Indeed most of...
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