Digital sales channels and the relationship between product and international diversification: Evidence from going digital retail MNEs

Supporting information: Additional supporting information can be found online in the Supporting Information section at the end of this article, available at: https://doi.org/10.1002/gsj.1465.Copyright © 2022 The Authors. Research Summary: We argue that in the era of e-commerce, retail firms can simultaneously grow their product and international portfolio by adopting a multichannel strategy, that is, using digital and physical channels. Drawing on the resource bundling perspective, we argue that the previously advocated negative relationship between product and international diversification is mitigated by the retail firm's digital sales intensity. By separately examining product and international diversification across digital and physical channels, we find that while increased product diversification in physical channels relates negatively with international diversification in both physical and digital channels, increased product diversification in digital channels relates positively with international diversification in both channels. Our hypotheses are tested against a sample of 122 born physical - going digital retail MNEs over the period 2006–2016. Managerial Summary: The decision on how firm resources should be allocated for growing a firm's product and international scope has been a continuing debate in corporate strategy. While our research supports the conventional wisdom that product portfolio growth relates negatively to international market growth, we show that firms which increase their digital sales are able to mitigate the costs associated with this relationship. Based on longitudinal data of some of the world's largest retail MNEs, our research shows that retail firms with increased digital sales activity are more capable of mutually benefiting from simultaneously growing their product portfolio and international market presence. Therefore, if a retail firm aims at simultaneously growing its product portfolio and international market presence, it is advisable that they increase their proportion of digital sales (i.e., e-commerce activity)

Strategic alliances in the internationalisation of portuguese SMEs: Jerónimo Martins case study

Projeto / JEL classification: D74, F23Given the reduction in domestic consumption in recent years, Portuguese enterprises have been forced to find new solutions to diversify their business. One of alternatives lies on marketing their goods and/ or services in external markets. Nevertheless, the internationalisation process depends on several factors. Most strategies imply a high investment or commitment and not all companies are able to assign resources to international expansion, whose business dimension is small and medium (SMEs). In order to become more accessible this approach, these firms can take advantage from successful business partnerships previously set out with other national companies, in Portugal, aiming to grow in markets where they have already operated. The large enterprises (LEs) can provide this opportunity, being highly present in different countries. With the goal of understanding the reasons of domestic companies’ choice for other companies to the supply of a product overseas, a case study was carried out. In this context, managers of SMEs, suppliers of Jerónimo Martins in Portugal and Poland, were interviewed. The outcomes obtained suggest that Jerónimo Martins prefers a SME from home country, since it took place previous trades in country of origin and SME offers a competitive product, in terms of price and quality, and tailored to host market. Generally, these partnerships evolve to highly successful strategic alliances, when they affect the competitiveness of the firms involved and require a long-term commitment of resources, i.e., when companies collaborate actively in several destinies.Face à redução do consumo interno nos últimos anos, as empresas portuguesas veem-se obrigadas a encontrar novas soluções para diversificar o seu negócio. Uma das alternativas passa por comercializar os seus produtos em mercados externos. No entanto, o processo de internacionalização depende de diversos fatores. Muitas estratégias exigem um elevado investimento ou compromisso e nem todas as empresas têm a capacidade de aplicar recursos na expansão internacional, cuja a dimensão de negócio é pequena e média (PMEs). Para tornar esta abordagem mais acessível, estas empresas podem aproveitar as parcerias de negócio de sucesso anteriormente estabelecidas com outras empresas nacionais, em Portugal, com o objetivo de crescer em mercados onde estes já operem. As empresas de grande dimensão (GEs) podem proporcionar esta oportunidade, estando fortemente presentes em diversos países. A fim de se perceber as razões da escolha de empresas nacionais por outras empresas para o fornecimento de um produto no exterior, realizou-se um caso de estudo. Neste âmbito, entrevistaram-se gestores de PMEs fornecedoras da Jerónimo Martins em Portugal e na Polónia. Os resultados obtidos sugerem que a Jerónimo Martins prefere uma PME do seu país, desde que já tenham ocorrido trocas comerciais anteriores no país de origem e a PME ofereça um produto competitivo, em termos de preço e qualidade, e adaptado ao mercado de chegada. Normalmente, estas parcerias tornam-se alianças estratégicas de grande sucesso, quando afeta a competitividade das empresas envolvidas e existe uma afetação de recursos a longo prazo, ou seja, quando colaborarem ativamente em vários mercados

Effect of strategic orientation on innovation and performance : the case of multiple channel retailing (MCR)

Over the past decade technological, administrative and marketing innovations have grown at unprecedented rates in the retail industry. Among this wave of innovation, no single technology has generated as much interest as the phenomenon of multiple channel retailing (MCR). MCR is the practice of distributing goods to consumers through both traditional brick-and-mortar outlets and through the Internet channel. Though many retailers jumped on the early MCR bandwagon, a number of large players have scaled back their Internet operations over the past two years (Sheraga, 2001). The current research uses Organizational Diffusion of Innovations (ODI) theory to examine the determinants of MCR adoption within this industry. Previous research into ODI phenomena has not delved deeply into the influence of competitor behavior on organizational adoption decisions. The current research considers the effect of firm strategy on MCR innovation and firm performance in the domestic retail industry. The Miles and Snow strategic typology is used as the theoretical basis for the strategy concept. A network of hypotheses is posited based on the extant ODI literature, the Miles and Snow theory and the current state of MCR diffusion. Hypotheses are tested using field data collected through a mail survey. Data were collected from key informants inside domestic retail chains (N = 102). Multivariate Analysis of Covariance (MANCOVA) suggests that strategic orientation is related to innovation among U.S. retail firms. This relationship is significant while adjusting for an organizational size covariate. Results also suggest that the Miles and Snow typology is effective in explaining strategic contingencies in the retail context. Implications and research directions for theory and practice are offered

Performance measurement among small-and-medium-sized UK Internet retailers

Internet retailing is one of the fast-growing business sectors in the UK, and this sector is currently entering a more stable development stage. In this stage, the issue of business strategy and performance measurement, often neglected during the dotcom era, is gaining in importance. Although various studies have been done, the investigation of this issue is limited. This study helps to fill this gap by investigating performance measurement and business strategy of Internet retailing business, and their significance in enhancing business performance. A mail questionnaire was used in a survey of UK Internet retailers. The questionnaire contained variables of performance indicators, use of performance measurement, strategic orientation, businessp erformance, and business profile. The survey produced 252 responses of small-and-medium-sized internet retailers, defined as having less than £10 million of annual online sales turnover. By factor analysis, strategic orientation can be treated as having two dimensions:( 1) conservativeness, and (2) aggressiveness; business performance, two: (1) financial, and (2) operational; and performance measurement, one: the number of performance indicators measured. The findings show that UK Internet retailers are likely to concentrate their performance measurement more on financial, market-sales, and web-related indicators rather than customer and process. After controlling for variations of business size, the empirical results reveal that (1) more conservative retailers are likely to measure more performance indicators, (2) retailers using more performance indicators are likely to have better operational performance, and (3) less aggressiveness retailers tend to be associated with better financial performance. This study has provided evidence that strategic orientation is associated with the financial aspect of business performance, and performance measurement with the operational aspect of business performance. The results provide useful insights for Internet retailing managers, especially concerning the importance of performance measurement, and the choice of strategic orientation. More importantly, this study opens up possibilities for further study of performance measurement and businesss strategy of internet retailing busines

Valuation and value relevance of the firm-level, and geographic and business segment-level accounting information

In this study, I empirically examine the valuation and value relevance characteristics of specific consolidation and segment-disaggregated corporate financial information. On the consolidation level, I investigate the relationships (in terms of value relevance and pricing) between the UK firms’ equity market values and the firm-level contemporaneous equity book values, earnings and dividends. The objective here is identify and explore factors and contexts that impact on the value relevance and pricing of consolidated financial statement information reported by UK publicly traded firms over the period from 1987 to 2002. On the segmental level, the study capitalises on the insights gained from the consolidated level findings and investigates (i) whether financial information, on specific geographic and line-of-business segments’ operations of a cross-section of UK multi-segment firms, is associated with the equity market value of the entire firm (i.e., value relevant); (ii) whether such operations are being differentially priced (by the stock market) into the equity market value of the firm; and (iii) how the factors/contexts affecting value relevance and pricing of the firm-level accounting fundamentals impact on the value relevance and pricing of the segment-level results. Additionally, this study provides further empirical evidence on the adequacy of the UK segment reporting accounting standard SSAP 25, and the quality of segment disclosures in the UK. The employed valuation model represents a fusion of valuation frameworks developed in earlier studies [e.g., Edwards and Bell (1961), Peasnell (1981, 1982), Ohlson (1989, 1995), Rees (1997), Garrod and Rees (1998), Wysocki (1998)]. On the consolidated-level, the model expresses the size-deflated equity market value of the firm as a linear function of size-deflated equity book value, earnings for ordinary, dividends for ordinary shareholders and additional control/dummy variables. In the segment-level analysis, the earnings variable is further disaggregated into its segment-level elements. With regard to the firm-level analysis, the study uncovers a range of contexts and factors that affect the value relevance and pricing of specific accounting value drivers. Among these are: the sign of reported earnings and book values; whether the firm trades at a premium/discount to its book value; the economic periods; the dividend status of the firm; diversification profile of the firm; and the industrial affiliation of the firm. In addition, the firm-level analysis indicates that the industrially diversified firms have lower valuation than the focused firms, while the geographically diversified firms have higher valuation than the domestic firms

An empirical study of marketing environment strategy and performance in the property market

By adapting industrial organisation, resource based theories and PIMS database research, the study proposes the organisation-environment-strategy-performance (OESP) framework and a model of property marketing in the Taiwan property market. The thesis proposed and tested an integrative model of business performance incorporating the major determinants of business performance, internal and external environment, and competitive marketing strategy. The thesis proposed and tested hypothesised relationships among four external marketing environment dimensions, four internal marketing environment dimensions, seven marketing strategies dimensions and four performance variables. By focusing on both construct and tests of hypothesised relationships, the study aims to strengthen the empirical foundation of marketing strategy research. The research findings reported are based on a mail survey of 102 property marketing business managers. Separated and integrated models were developed, and the relationships presented in the research questions were tested using two-year panel survey and retrospective longitudinal study (year 2000-2001) of 102 firms in the Taiwan property industry. Pooled cross-sectional time series regression and multiple regress methods were employed to test the research hypotheses and exploratory propositions. In the separated model, internal environment variables (market orientation, product advantage and resource commitment) were not found to be statistically explanations of variance in business performance. Of the external environment variables, demand potential and technological change were found to be key explanatory factors of variance in business unit performance. Marketing strategy variables such as product positioning and sales force expenditures were found to be statistically significant explanatory factors of variance in business performance. Product-market scope strategy is affected by the product advantage and resource commitment while promotion element decision is affected by technical change and resource commitment. Distribution decision is determined by competitive intensity, customer orientation and prior performance. Product positioning is affected by the product advantage while strategic alliance is determined by market attractiveness and technical change pressure. No marketing environment and prior performance factors were found to affect sales force expenditures and pricing decisions. The substitute of competitors factor is found to be statistically significant explanatory power of variance in market orientation and resource commitment