Building international strategy with formats and formulae

Seeking economies of scale by spatial market growth has been a significant motive for retailers to expand internationally. Alongside this expansion into new geographic markets retailers have also increased organizational scale, domestically and internationally, by developing a multi-format and multi-formula approach through stores to target additional market segments. It has also become apparent that retailers have to adapt these formulae to local markets, not only in merchandise but also across a range of operational activities. Before exploring the implications of this multi-format approach for internationalization it is useful to consider the concepts of format and formula as a means by which retailers and consumers interact so enabling retailers to achieve their primary objective in international retailing, namely growth of sales.