Introduction to International Marketing
Individual Work – Week 9
March 15, 2013
Why do you think hypermarkets are more common in some countries than others? Hypermarkets are the combination of a department store and a grocery store. This model of a big-box store offers a large variety of products under one roof to the shoppers. Hypermarkets focus on high volume of sales meanwhile incorporating a low-margin. In order to accommodate that sort of business model hypermarkets are typically found in suburban areas or rural towns where there is plenty of space to accommodate the big-box store and parking as well as accessible by automobile. These hypermarkets are also typically found to be in countries that will allow their small local retailers to compete against these giants. Hypermarkets are becoming more popular in countries that are becoming more economically developed, whereas small retailers are decreasing and the larger stores are increasing. At the same time, these big-box stores will carry a wide variety of products and offer it at better prices than the small local competitor. However, some countries have put in place restrictions that restrict foreign investors to venture into their local economy. For example, India has placed restrictions on non-Indian firms to minority investments in most retail ventures (Gillespie & Hennessey, 2011, p. 373). Protests and riots have resulted from the local farmers, traders and small shopkeepers in fear of losing their livelihoods. What competitive advantages do foreign retailers such as Wal-Mart and Carrefour enjoy when they enter Asian markets? Foreign retailers such as Wal-Mart and Carrefour are attracted to international markets because these markets offer a higher growth rate. As home markets for these retailers become mature, their growth begins to slow down.
What are some possible competitive advantages of local retailers? Local retailers may purchase...