Retail Border Wars: Winning the International Raceby W. Evans1996-09
Now, four years later, this study searches for insights into the changing nature of retail competition in the North American market, and the cross border movement between Canada, the United States and to a lesser extent Mexico. There is very clearly an American retail advantage and U.S. retailers have already won significant market share in both Canada and Mexico. It is hoped that the findings and insights into this process will both stimulate the desire of Canadian retailers to expand internationally, and facilitate their success. Five Canadian companies were studied, three of which were involved in the previous research, in order to track change over time, and one company which made the decision not to expand outside of Canada, at least in the short term. The companies are Provigo Inc., Chateau Stores of Canada, Dylex Ltd., The Jean Coutu Group (PJC) Inc., and The Hudson's Bay Company. There were six American retailers involved in the study; Business Depot/Staples, Home Depot, Michaels of Canada Inc., LensCrafters, Gap Canada, and Price/Costco Canada; the latter three participated in the past research. One European retailer which had entered Canada, Marks and Spencer, was also included. Two cases of U.S. entrants into the Mexican market were undertaken; Kmart de Mexico, and Pizza Hut de Mexico, and several indigenous Mexican retailers were studied; El Puerto de Liverpool (similar to Eatons in Canada) Albano (a shoe chain), El Palacio de Hierro, (an upscale department store chain) and CIFRA (Mexico's largest retailer and Wal*Mart's joint venture partner in Mexico). The top executive/s in each of the companies shared their experiences, both good and not so good, along with their insights into doing business internationally. The research was made possible through their goodwill and willingness to share information, for which we are very grateful. One of the objectives of the research was to develop a database and measure the extent of cross border movement in North America. It has become clear that no Canadian retailer is immune to the effects of global competition. |
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The North American retail industry,
including Canada, the United States and Mexico has undergone significant change over the
last decade, and particularly over the last five years. This research documents and
analyzes what we have identified as the most important change -- the internationalization
of the North American retail market. This study builds on research which was begun in 1988
and published in a book called Border Crossings in 1992. The question we set out to answer
at that time was why leading Canadian retailers fared so poorly in the American market
while United States retailers were almost always successful in Canada.