Many traditional behaviorist or marketing approaches and descriptive models have been developed in the past to explain internationalization of retail firms. Only a few of these have a wider scope comparable to theories used today in international management research. The international retailing research so far has barely touched upon the international management of value-added activities and processes. This paper proposes and discusses a general value chain approach which opens up a promising perspective to provide a new direction for research and a better understanding of management options for increasingly internationalized retail firms. This appears to be all the more important because, in practice, more and more highly internationalized firms are structuring their value-added activities and processes on an increasingly international basis in order to gain competitive advantages or to increase their profits.
Internationalization of modern retailing has been going on since the 1990s with increasing dynamics and due to market saturation in many western developed countries (Cliquet, 2006). The world's largest retailers, such as Wal-Mart, Carrefour, Metro, and Tesco (Swoboda et al., 2005), or smaller, specialized ones like Sephora and Douglas, H&M, and GAP, achieve growing foreign turnover rates, but also have to conduct their value chain activities or processes (VCAs or VCPs) on an increasingly international basis. Despite the fact that the number of publications on this topic is growing, particularly in comparison with national retail or general international management literature, the knowledge on international VCAs by retailers is still not that extensive. This paper sees internationalization of retail firms not merely as the important adoption to single country markets or the strategic internationalization on the sales side (Sternquist, 1997, p. 263). Just like Dawson (1993) and Sparks (1995), we examine procurement and management processes as a part of retail internationalization and look further at logistics, operations, and the whole firm's value chain. This view takes into consideration that all VCAs are also a potential source for retailers’ competitive advantages at the international level and, ultimately, for their success in each individual country and across the countries served. Our aim is therefore to analyze the retail management opportunities in the areas of market-oriented processes and supply chain processes, accompanied by the management or business processes of each value chain activity (VCA), the value chain processes (VCPs), and the whole firm.
The paper develops first an approach based on retail-specific VCPs and the respective management dimensions. Second and built on this approach, we investigate VCAs across border, looking at research questions and management options, illustrating them with examples and short case studies. An integrative look at value-added systems and the dynamics of international retailing complete the paper. We try through this general value chain approach to open up a promising perspective for the future to provide a better understanding of management options in increasingly internationalized retail firms.
