The retail sector is at the forefront of internationalisation activities. It is especially the case for German and French retailers that operate respectively 27.8% and 20.6% of non domestic outlets in Western Europe.
Stating this, the grocery retailers have also drastically changed their orientation, from domestic to multinational players since two decades: a relatively new and important subject that needs to be taken into account. Within this frame, Casino and REWE Group are good examples of internationalisation since both have the same size internationally but do not operate in the same area and do not seem to have the same strategy regarding their global activities.
The aim of the research is to find outstanding characteristics in the internationalisation strategy of European grocery retailers, via the case of Casino and REWE Group. In order to illuminate this aim, Porter’s ‘Structural Analysis of Industries’ is going to be used to the grocery retailing sector following a previous demonstration of Colla (2003) and other field-specific theories.
After pointing out the similitude between the two companies in their domestic markets, several dimensions have been taken into account to analyse the differences when going international such as geographical spread, branding, channel selection, and ownership.
We have identified two different internationalisation strategies, through the case of these retailers. Thus, we have drawn a dichotomy in the European food retailing industry internationalisation strategy between what we named ‘umbrella organisation’ and ‘unifying organisation’.
The latter is characterised by a unified branding strategy, operating few formats, looking for full control of its operation abroad via direct takeovers or organic growth, and looking for harmonisation of its operations abroad. On the opposite, an umbrella organisation operates numerous banners abroad. It is mostly looking for a multi-format offer, enters countries via overtime capital acquisition and gives more independence to its affiliates worldwide.
Source: Karlstad University
Author: Aïtamer, Gildas | Meier, Anne-Kathrin