The Nature of International Retail Divestment: Insights from Ahold

M palmer, Barry Quinn

Research output: Contribution to journalArticle

40 Citations (Scopus)

Abstract

Purpose – This paper aims to explore the nature of divestment within the context of retailer internationalisation. Design/methodology/approach – It focuses on the activities of the Dutch food multinational retailer Royal Ahold (Ahold). Drawing on 37 in-depth interviews with investment banks and executives, this paper provides a number of insights into Ahold's international retail divestment activities within the context of a broadly successful international investment strategy. Findings – It offers some new insights into the multidimensional nature of international retail divestment construct in terms of the operational as well as more subtle and less visible non-operational international retail divestments. It is concluded from this study that, rather than portraying strategic and opportunistic approaches as binary opposites, a retail firm may have varying degrees of approaches to international retail divestment, and these may not necessarily be isomorphic across different countries. Research limitations/implications – The paper explores international retail divestment from a rather broad perspective, although it is hoped that these parameters can be used to raise a new set of more detailed priorities for future research on international retail divestment. Practical implications – This paper raises a number of interesting issues such as whether retailers initially take divestment seriously and the degree to which this is actually possible during market entry. Originality/value – As called for in the literature, this study examines divestment in the broadest possible fashion, thus addressing a major gap in our understanding of the whole internationalisation process.
LanguageEnglish
Pages26-45
JournalInternational Marketing Review
Volume24
Issue number1
DOIs
Publication statusPublished - 2007

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Retail
Divestment
Retailers
Investment strategy
Multinationals
Design methodology
Internationalization
Food
Internationalization process
Market entry
International investments
In-depth interviews
Investment banks

Cite this

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title = "The Nature of International Retail Divestment: Insights from Ahold",
abstract = "Purpose – This paper aims to explore the nature of divestment within the context of retailer internationalisation. Design/methodology/approach – It focuses on the activities of the Dutch food multinational retailer Royal Ahold (Ahold). Drawing on 37 in-depth interviews with investment banks and executives, this paper provides a number of insights into Ahold's international retail divestment activities within the context of a broadly successful international investment strategy. Findings – It offers some new insights into the multidimensional nature of international retail divestment construct in terms of the operational as well as more subtle and less visible non-operational international retail divestments. It is concluded from this study that, rather than portraying strategic and opportunistic approaches as binary opposites, a retail firm may have varying degrees of approaches to international retail divestment, and these may not necessarily be isomorphic across different countries. Research limitations/implications – The paper explores international retail divestment from a rather broad perspective, although it is hoped that these parameters can be used to raise a new set of more detailed priorities for future research on international retail divestment. Practical implications – This paper raises a number of interesting issues such as whether retailers initially take divestment seriously and the degree to which this is actually possible during market entry. Originality/value – As called for in the literature, this study examines divestment in the broadest possible fashion, thus addressing a major gap in our understanding of the whole internationalisation process.",
author = "M palmer and Barry Quinn",
note = "Reference text: Alexander, N. and Myers, H. (2000), “The retail internationalisation process”, International Marketing Review, Vol. 17 Nos 4/5, pp. 334-54. Alexander, N. and Quinn, B. (2002), “International retail divestment”, International Journal of Retail & Distribution Management, Vol. 30 No. 2, pp. 112-25. Balto, D.A. (2001), “Supermarket merger enforcement”, Journal of Public Policy and Marketing, Vol. 20, pp. 38-50. Brown, S. and Burt, S.L. (1992), “Conclusion – retail internationalization: past, imperfect, future imperative”, European Journal of Marketing, Vol. 26 Nos 8/9, pp. 80-4. Bruner, J. (1990), Acts of Meaning, Harvard University Press, Cambridge, MA. Burt, S. (1991), “Trends in the internationalisation of grocery retailing: the European experience”, International Review of Retail, Distribution &Consumer Research, Vol. 1 No. 4, pp. 487-515. Burt, S.L. (1993), “Temporal trends in the internationalisation of British retailing”, International Review of Retail, Distribution and Consumer Research, Vol. 3 No. 4, pp. 391-410. Burt, S.L., Dawson, J. and Sparks, L. (2003), “Failure in international retailing: research propositions”, International Review of Retail, Distribution and Consumer Research, Vol. 13, pp. 355-73. Burt, S.L., Mellahi, K., Jackson, T.P. and Sparks, L. (2002), “Retail internationalisation and retail failure: issues from the case of Marks and Spencer”, International Review of Retail, Distribution and Consumer Research, Vol. 12 No. 2, pp. 191-219. Clark, G.L. and Wrigley, N. (1997), “Exit, the firm and sunk costs: reconceptualising the corporate geography of disinvestment and plant closure”, Progress in Human Geography, Vol. 21 No. 3, pp. 338-58. Clarke, I. and Rimmer, P. (1997), “The anatomy of retail internationalisation: Daimaru’s decision to invest in Melbourne, Australia”, Service Industries Journal, Vol. 17 No. 3, pp. 361-82. Corporate Intelligence Group (1996), UK Retailers’ Cross-border Activities, Corporate Intelligence Group, London. Nature of international retail divestment 43 Cotterill, R.W. (2002), An Antitrust Economic Analysis of Stop & Shop’s Proposed Acquisition of the Big V Shop Rite Supermarket Chain, Food Marketing Policy Center, University of Connecticut, Storrs, CT, pp. 1-28. Dawson, J. (2001), “Strategy and opportunism in European retail internationalization”, British Journal of Management, Vol. 12, pp. 253-66. Godley, A. and Fletcher, S. (2000), “Foreign entry into British retailing, 1850-1994”, International Marketing Review, Vol. 17 Nos 4/5, pp. 392-415. Hamilton, H.W. (1991), “When the anchor tenant goes dark”, The Real Estate Finance Journal, Vol. 6 No. 4, pp. 83-7. Knee, D. (1993), Survey of International Moves by Retailers 1991-1993, Oxford Institute of Retail Management, Oxford. Mintzberg, H. (1987), “Crafting strategy”, Harvard Business Review, Vol. 65 No. 1, pp. 65-75. Partch, K. (1997), “Playing merger hardball”, Supermarket Business, Vol. 52 No. 9, p. 194. Rolfe, J. and Troob, P. (2000), Monkey Business: Swinging through the Wall Street Jungle, Warner Books, New York, NY, pp. 1-273. Sparks, L. (1995), “Reciprocal retail internationalisation: the Southland Corporation, ltoYokado and 7-eleven convenience stores”, Service Industries Journal, Vol. 15 No. 4, pp. 57-96. Sparks, L. (1996), “Investment recommendations and commercial reality in Scottish grocery retailing”, Service Industries Journal, Vol. 16, pp. 165-90. Sparks, L. (2000), “Seven-Eleven Japan and The Southland Corporation: a marriage of convenience?”, International Marketing Review, Vol. 17 Nos 4/5, pp. 401-15. Taylor, S.J. and Bogdan, R. (1984), Introduction to Qualitative Research Methods: The Search for Meanings, Wiley, New York, NY. Treadgold, A. (1990), “The developing internationalisation of retailing”, International Journal of Retail & Distribution Management, Vol. 18 No. 2, pp. 4-10. Vida, I. (2000), “An empirical inquiry into international expansion of US retailers”, International Marketing Review, Vol. 17 Nos 4/5, pp. 454-74. Wathne, K.H. and Heide, J.B. (2000), “Opportunism in interfirm relationships: forms, outcomes and solutions”, Journal of Marketing, Vol. 64 No. 4, pp. 36-51. Wrigley, N. (1999), “Market rules and spatial outcomes: insights from the corporate restructuring of US food retailing”, Geographical Analysis, Vol. 31 No. 2, pp. 1-25. Wrigley, N. (2002), “The landscape of pan-European food retail consolidation”, International Journal of Retail & Distribution Management, Vol. 30 No. 2, pp. 81-91. Wrigley, N. and Currah, A. (2003), “The stresses of retail internationalisation: lessons from Royal Ahold’s experience in Latin America”, International Review of Retail, Distribution and Consumer Research, Vol. 13 No. 3, pp. 221-43. Yin, R.K. (1994), Case Study Research: Design and Methods, 2nd ed., Applied Social Research Methods Series, Sage, Newberry Park, CA. Further reading Wrigley, N. (2001), “Transforming the corporate landscape of US food retailing: market power, financial re-engineering and regulation”, Tijdschrift voor Economische en Sociale Geografie, Vol. 93 No. 1, pp. 62-82. IMR 24,1 44",
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The Nature of International Retail Divestment: Insights from Ahold. / palmer, M; Quinn, Barry.

In: International Marketing Review, Vol. 24, No. 1, 2007, p. 26-45.

Research output: Contribution to journalArticle

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AU - palmer, M

AU - Quinn, Barry

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(1993), “Temporal trends in the internationalisation of British retailing”, International Review of Retail, Distribution and Consumer Research, Vol. 3 No. 4, pp. 391-410. Burt, S.L., Dawson, J. and Sparks, L. (2003), “Failure in international retailing: research propositions”, International Review of Retail, Distribution and Consumer Research, Vol. 13, pp. 355-73. Burt, S.L., Mellahi, K., Jackson, T.P. and Sparks, L. (2002), “Retail internationalisation and retail failure: issues from the case of Marks and Spencer”, International Review of Retail, Distribution and Consumer Research, Vol. 12 No. 2, pp. 191-219. Clark, G.L. and Wrigley, N. (1997), “Exit, the firm and sunk costs: reconceptualising the corporate geography of disinvestment and plant closure”, Progress in Human Geography, Vol. 21 No. 3, pp. 338-58. Clarke, I. and Rimmer, P. (1997), “The anatomy of retail internationalisation: Daimaru’s decision to invest in Melbourne, Australia”, Service Industries Journal, Vol. 17 No. 3, pp. 361-82. Corporate Intelligence Group (1996), UK Retailers’ Cross-border Activities, Corporate Intelligence Group, London. Nature of international retail divestment 43 Cotterill, R.W. (2002), An Antitrust Economic Analysis of Stop & Shop’s Proposed Acquisition of the Big V Shop Rite Supermarket Chain, Food Marketing Policy Center, University of Connecticut, Storrs, CT, pp. 1-28. Dawson, J. (2001), “Strategy and opportunism in European retail internationalization”, British Journal of Management, Vol. 12, pp. 253-66. Godley, A. and Fletcher, S. (2000), “Foreign entry into British retailing, 1850-1994”, International Marketing Review, Vol. 17 Nos 4/5, pp. 392-415. Hamilton, H.W. (1991), “When the anchor tenant goes dark”, The Real Estate Finance Journal, Vol. 6 No. 4, pp. 83-7. Knee, D. (1993), Survey of International Moves by Retailers 1991-1993, Oxford Institute of Retail Management, Oxford. Mintzberg, H. (1987), “Crafting strategy”, Harvard Business Review, Vol. 65 No. 1, pp. 65-75. Partch, K. (1997), “Playing merger hardball”, Supermarket Business, Vol. 52 No. 9, p. 194. Rolfe, J. and Troob, P. (2000), Monkey Business: Swinging through the Wall Street Jungle, Warner Books, New York, NY, pp. 1-273. Sparks, L. (1995), “Reciprocal retail internationalisation: the Southland Corporation, ltoYokado and 7-eleven convenience stores”, Service Industries Journal, Vol. 15 No. 4, pp. 57-96. Sparks, L. (1996), “Investment recommendations and commercial reality in Scottish grocery retailing”, Service Industries Journal, Vol. 16, pp. 165-90. Sparks, L. (2000), “Seven-Eleven Japan and The Southland Corporation: a marriage of convenience?”, International Marketing Review, Vol. 17 Nos 4/5, pp. 401-15. Taylor, S.J. and Bogdan, R. (1984), Introduction to Qualitative Research Methods: The Search for Meanings, Wiley, New York, NY. Treadgold, A. (1990), “The developing internationalisation of retailing”, International Journal of Retail & Distribution Management, Vol. 18 No. 2, pp. 4-10. Vida, I. (2000), “An empirical inquiry into international expansion of US retailers”, International Marketing Review, Vol. 17 Nos 4/5, pp. 454-74. Wathne, K.H. and Heide, J.B. (2000), “Opportunism in interfirm relationships: forms, outcomes and solutions”, Journal of Marketing, Vol. 64 No. 4, pp. 36-51. Wrigley, N. (1999), “Market rules and spatial outcomes: insights from the corporate restructuring of US food retailing”, Geographical Analysis, Vol. 31 No. 2, pp. 1-25. Wrigley, N. (2002), “The landscape of pan-European food retail consolidation”, International Journal of Retail & Distribution Management, Vol. 30 No. 2, pp. 81-91. Wrigley, N. and Currah, A. (2003), “The stresses of retail internationalisation: lessons from Royal Ahold’s experience in Latin America”, International Review of Retail, Distribution and Consumer Research, Vol. 13 No. 3, pp. 221-43. Yin, R.K. (1994), Case Study Research: Design and Methods, 2nd ed., Applied Social Research Methods Series, Sage, Newberry Park, CA. Further reading Wrigley, N. (2001), “Transforming the corporate landscape of US food retailing: market power, financial re-engineering and regulation”, Tijdschrift voor Economische en Sociale Geografie, Vol. 93 No. 1, pp. 62-82. IMR 24,1 44

PY - 2007

Y1 - 2007

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AB - Purpose – This paper aims to explore the nature of divestment within the context of retailer internationalisation. Design/methodology/approach – It focuses on the activities of the Dutch food multinational retailer Royal Ahold (Ahold). Drawing on 37 in-depth interviews with investment banks and executives, this paper provides a number of insights into Ahold's international retail divestment activities within the context of a broadly successful international investment strategy. Findings – It offers some new insights into the multidimensional nature of international retail divestment construct in terms of the operational as well as more subtle and less visible non-operational international retail divestments. It is concluded from this study that, rather than portraying strategic and opportunistic approaches as binary opposites, a retail firm may have varying degrees of approaches to international retail divestment, and these may not necessarily be isomorphic across different countries. Research limitations/implications – The paper explores international retail divestment from a rather broad perspective, although it is hoped that these parameters can be used to raise a new set of more detailed priorities for future research on international retail divestment. Practical implications – This paper raises a number of interesting issues such as whether retailers initially take divestment seriously and the degree to which this is actually possible during market entry. Originality/value – As called for in the literature, this study examines divestment in the broadest possible fashion, thus addressing a major gap in our understanding of the whole internationalisation process.

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