Metro Cash & Carry´s key competitive advantages were that it was often the first mover as it was the first wholesaler that worked with the cash and carry system, offering a wide range of products and having a non-traditional marketing approach that makes feel the customers as they were a member of a special “club”. For its international expansion the company created skills, especially when entering into emerging markets, to quickly set up in a new country and to adapt to local market demand, which was facilitated by having many local relationships.
When entering into a new market, the company firstly screened the possible countries perfectly, tailored strategies to each market and tried to expand very quickly after entering. It´s so called city-by-city investment plan was either carried out through a cluster approach, building business units in major urban centers, or by using a spiral approach, which means to start in a large city and expand further away but maintain synergies in purchasing, logistics, and relationships.
As the company was required to adapt to different markets with a different approach, the company got had regional structures and had an extra department for corporate development, which was in charge of screening competition and market evolutions. Furthermore, the country management teams were set up with managers from many nationalities and were required to have a hands-on approach.
What role did institutional context play in challenging MCC’s efforts to prove the value proposition of its unique wholesaling format and establish itself as an accepted corporate citizen in Russia, India, and China?
When establishing its operations in these emerging markets, Metro C&C was facing different challenges for each of these countries.
In China, the market was dominated by state owned enterprises, a poor distribution system and a tendency for local... [continues]
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