Geographical expansion and innovation patterns related to the performance of FMCG retailers

---

Authors

Zombor Berezvai¹ , Irma Agárdi¹ , Mónika Anetta Alt²

1. Corvinus University of Budapest
2. Babeş-Bolyai University

Conference / event

46th Annual Conference of the European Marketing Academy, May 2017 (Groningen, Netherlands)

Poster summary

In the last decade, the retail sector was shaped by internationalization, technology development, and economic downturn forcing companies to response to market challenges. Our research focuses on the interaction of two strategic responses: geographical expansion and innovation related to the change in financial performance of large FMCG retailers. Using a multi-source database, we analyzed profitability, geographical expansion, and innovation patterns of 37 large European and U.S. retail companies between 2008-2015. Findings indicate that market performance is closely related to domestic expansion and international diversification of the retailers. While domestic expansion proved to be successful without high innovation activity, international expansion requires more intensive innovation activity due to the necessary adaptation to local markets. Therefore, European retailers with higher international diversification are forced to roll out more innovation compared to U.S. retailers.

Keywords

FMCG retailers, Innovation, Geographical diversification, Profitability

Research areas

Business, Economics and Finance

References

1. Wiersema, M.F., Bowen, H.P. (2011). The relationship between international diversification and firm performance: Why it remains a puzzle. Global Strategy Journal, 1, 152-170.
2. Hitt, M., Hoskisson, R.E., Ireland, R.D. (1994). A Mid-range theory of the interactive effects of international and product diversification on innovation and performance. Journal of Management, 20, 297-326.
3. Zahra, S.A., Ireland, R.D., & Hitt, M.A. (2000). International Expansion by New Venture Firms: International Diversity, Mode of Market Entry, Technological Learning, and Performance. Academy of Management Journal, 43, 925-950.
4. Filippetti, A., Frenz, M., Ietto-Gillies, G. (2013). The role of internationalization as a determinant of innovation performance. An analysis of 42 countries. CMIR, London.
5. Siedschlag, I., Zhang, X. (2015). Internationalisation of firms and their innovation and productivity. Economics of Innovation and New Technology, 24, 183–203.
6. Sohl, T. (2012). Diversification strategies in the global retailing industry: Essays on the dimensions and performance implications. Sankt-Gallen: Dissertation of the University of St. Gallen, School of Management, Economics, Law, Social Sciences and International Affairs.
7. Oh, C.H., Sohl, T., Rugman, A.M. (2015). Regional and product diversification and the performance of retail multinationals. Journal of International Management, 21, 220-234.
8. Burt, S., Davies, K., Dawson, J., Sparks, L. (2008). Categorizing patterns and processes in retail grocery internationalization. Journal of Retailing and Consumer Services, 15, 78-92.
9. Corstjens, M., Lal, R. (2012). Retail doesn’t cross borders. Harvard Business Review, 90, 4, 104-111.
10. Cascio, R.P. (2011). Marketing innovation and firm performance research model, research hypotheses, and managerial implications. Orlando: Dissertation at the University of Central Florida.

Funding

No data provided

Supplemental files

No data provided

Additional information

Competing interests

No competing interests were disclosed.

Data availability statement

The datasets generated during and / or analyzed during the current study are available from the corresponding author on reasonable request.

Creative Commons license

Copyright © 2023 Berezvai et al. This is an open access work distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.