Retail Global Expansion
Determining your method of market entry
As the global economy continues to stumble, retailers are struggling to achieve growth domestically. While there are pockets of opportunity, many retail sectors in the United States are saturated and not expected to grow much, if at all. Consequently, many retailers are looking beyond their borders for potential growth.
Foreign markets offer attractive growth rates fueled by burgeoning middle classes, lower competitive intensity, and greater pricing flexibility. Additionally, a global presence helps retailers lessen their risk exposure to an economic downturn in any one market. However, entering new countries is not as simple as signing a lease and opening the doors.
Market entry requires careful consideration of external risks and internal parameters in order to understand market dynamics, requisite competencies, and financial implications. There is no “one size fits all” model. In our latest report, Retail global expansion: Determining your method of market entry, Deloitte examines three primary market-entry methods, franchising, joint venture and owned expansion, and explores the potential trade-offs that each model presents.