Internatioal Management Case Study: Metro Cash & Carry

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Metro Cash and Carry has enjoyed competitive advantages in multiple areas. MCC has benefited from being business unit of Metro Group, the world's third largest retailer, which has provided ample sources of financing to the company. MCC introduced the C&C business model to the world, efficiently controlling operational costs by targeting small and medium-sized enterprises (SMEs). SMEs larger volume purchase habits leads to higher sales, lower cost and larger profit margin per customer for MCC. Second, the MCC’s cash only policy eliminates default risk credit card fees - minimizing risk. Third, customers of MCC handle shipping themselves, liberating the company from labor, vehicles and customer service. Last, a customer has to register as a business before purchasing, a policy that ensures the customer's dedication and facilitates customer relations. Corporate members tend to be more loyal and cherish the membership as a result.

Following Pankaj Ghemewat’s Framework for Managing Differences, MCC has been successful at adaptation and aggregation. Via wholly owned Metro Buying Group (MGB), the firm has developed an efficient centralizing system to supply culturally indifferent products. This has developed aggregation competency by helping MCC achieve economies of scale because universal products such as a toilet paper can be purchased and supplied in bulk from select locations. On the other front, adaptation, MCC has shown awareness of local needs and being flexible in challenging situations – the company sources 90% of their stock from local markets. In Germany, Turkish foods are supplied because of demand from large ethnic local population. In China, in order to open new stores, MCC has learned to penetrate local markets by forming alliances with politicians, which is necessary business behavior in the country.

The first step MCC should have taken in their expansion into India is to better understand the added company value as well as new...
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