RETAIL EXPANSION
BACK TO CONTENTS FIVE GOLDEN RULES
Overall, I have fi ve golden rules to pass on from my discussions with international retailers.
1 Protect the brand identity – it’s fundamental that a retailer doesn’t let an overseas venture ruin its own brand. This comes through brand positioning, choice of partner, consumer interaction, and many other facets of the brand.
2 Target complimentary markets – it’s best to start with similarity of customers and cultures fi rst. Choose areas where the brand ‘genes’ will be well understood. Leave the wild frontier for later (maybe).
3 Evaluate the competitive landscape – consider who you’ll be up against and how you’re going to compete with them. Also, think about how they will defend their turf against you. Don’t be naïve or over- optimistic here. It could turn into quite a battle.
4 Understand the economic and regulatory environment – you need to research things like import tariffs and duties. Many operators are frustrated trying to get into Brazil, for example, due to crippling customs.
5 Determine market entry strategy – there is a diffi cult balance to be struck between speed of entry and retaining the integrity of the brand. Sometimes retailers have selected the wrong partner initially and then face delays terminating arrangements and renegotiating with a new partner. So try to get it right fi rst time. Also, resist the temptation to ‘plant fl ags’. What is the point of having one store in a remote country? Most successful international retailers prefer to be in fewer territories with scale than spread thinly.
FOCUS 7
David McCorquodale Head of Retail at KPMG
T: +44 (0) 131 527 6718
david.mccorquodale@
kpmg.co.uk
No one is pretending it’s easy. But international expansion can be tremendously exciting and rewarding when you see your brand take off overseas. It can help to really propel the growth of the business as a whole, and boost its perceived stature.
David McCorquodale is responsible for leading and developing the fi rm’s retail practice in the UK. He is regularly quoted in the trade and national media on retail sales trends and other key issues affecting the sector.
David has been with KPMG since 1984 and is one of the founders of KPMG’s corporate fi nance business, advising listed and private companies on divestitures, acquisitions and fund raisings. He also leads KPMG’s European retail transactions and restructuring practice and has advised on numerous high profi le retail transactions.
© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative, a Swiss entity. All rights reserved.
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