Mothercare Expansion

Topics: Globalization, Developed country, Emerging markets Pages: 3 (1120 words) Published: May 19, 2013
Critically appraise the international expansion strategy of Mothercare In order to effectively appraise the international strategy of Mothercare it is important to understand the motives behind the expansion and highlight that retailers consider internalisation for different reasons (Sternquest 1997). Retailers may be “pushed” out of their home market as saturation and competition increases or alternatively “pulled” to international markets as the retailer has global appeal and the ambition to internationalise. Mothercare indicate there ambition to internationalise with their aim of building the brand to the leading specialise retailer for parenting products. This clearly illustrates the retailers ambition and intent to become a global retailer and thus the need for strategy to be discussed. Mothercare are confident with their universal appeal as the expectant mother and her child share characteristics that are the same everywhere. Mothercare indicate there internalisation movement was based around there universal appeal and felt that the business should move to where the market opportunities are much greater and competition much less. This would indicate clear pull factors with over 99.5% of the UK’s population outside the UK. It would however be naive to suggest that the fierce competition, continual reduction in like-for-like sales and the economic backdrop where not at the heart of the internationalisation. Tredgold 1988 suggests that there are a number of strategies that can be adopted depending on the amount of control the retailer wants and the resources it’s willing to invest. Generally an increase in cost will result in an increase in control. Mothercare adopted a low cost and low control model and looked to franchise the business. Illustrations of the retailer’s expansion strategy would indicate that in early expansion Mothercare would classify as a concentrated retailer with many of their ventures within a close proximity. These were safe moves as...
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