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The Strategic Localization of Transnational Retailers: The Case of Samsung-Tesco in South Korea

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  • Neil M. Coe
  • Yong-Sook Lee

Abstract

This article contributes to the small but growing geographic literature on the internationalization of retailing by exploring the strategic localization of transnational retailers. While it has long been recognized that firms in many different sectors localize their activities to meet the requirements of different national and local markets, the imperative is particularly strong for retail transnational corporations (TNCs) because of the extremely high territorial embeddedness of their activities. This embeddedness can be seen through the ways in which retailers seek to establish and maintain extensive store networks, adapt their offerings to various cultures of consumption, and manage the proliferation of connections to the local supply base. We illustrate these conceptual arguments through a case study of the Samsung-Tesco joint venture in South Korea, profiling three particular aspects of Samsung-Tesco’s strategic localization: the localization of products, the localization of sourcing, and the localization of staffing and strategic decision making. In conclusion, we argue that the strategic localization of transnational retailers needs to be conceptualized as a dynamic that evolves over time after initial inward investment and that localization should be seen as a two-way dynamic that has the potential to have a wider impact on the parent corporation.

Suggested Citation

  • Neil M. Coe & Yong-Sook Lee, 2006. "The Strategic Localization of Transnational Retailers: The Case of Samsung-Tesco in South Korea," Economic Geography, Taylor & Francis Journals, vol. 82(1), pages 61-88, January.
    • Handle: RePEc:taf:recgxx:v:82:y:2006:i:1:p:61-88
    DOI: 10.1111/j.1944-8287.2006.tb00288.x
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    Citations

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    Cited by:

    1. Morelli, Carlo, 2009. "Modern British Retailing in the Late 20th Century: Increasing Value?," SIRE Discussion Papers 2009-59, Scottish Institute for Research in Economics (SIRE).
    2. Janghee Cho & Hyunbae Chun & Yoonsoo Lee, 2023. "Productivity dynamics in the retail trade sector: the roles of large modern retailers and small entrants," Small Business Economics, Springer, vol. 60(1), pages 291-313, January.
    3. Kulke, Elmar & Suwala, Lech, 2015. "Internationalization of grocery retailers in emerging markets – general considerations and economic impacts," EconStor Preprints 247642, ZBW - Leibniz Information Centre for Economics.
    4. Swoboda, Bernhard & Morbe, Lukas & Hirschmann, Johannes, 2018. "International strategy’s effects on retailers’ local implementation and performance," International Business Review, Elsevier, vol. 27(3), pages 642-653.
    5. Janghee Cho & Hyunbae Chun & Yoonsoo Lee, 2022. "Productivity Dynamics in the Retail Trade Sector: The Roles of Large Modern Retailers and Small Entrants," Working Papers 2202, Nam Duck-Woo Economic Research Institute, Sogang University (Former Research Institute for Market Economy).
    6. Owens, Martin & Palmer, Mark & Zueva-Owens, Anna, 2013. "Institutional forces in adoption of international joint ventures: Empirical evidence from British retail multinationals," International Business Review, Elsevier, vol. 22(5), pages 883-893.
    7. Mark Palmer & Martin Owens & Leigh Sparks, 2006. "Interdisciplinary (Retail) Research: The Business of Geography and the Geography of Business," Environment and Planning A, , vol. 38(10), pages 1775-1783, October.
    8. Lisa Qixun Siebers, 2017. "Hybridization practices as organizational responses to institutional demands: The development of Western retail TNCs in China," Journal of Economic Geography, Oxford University Press, vol. 17(1), pages 1-29.
    9. Altenburg, Tilman & Kulke, Elmar & Reeg, Caroline & Peterskovsky, Lisa & Hampel-Milagrosa, Aimée, 2016. "Making retail modernisation in developing countries inclusive: a development policy perspective," IDOS Discussion Papers 2/2016, German Institute of Development and Sustainability (IDOS).
    10. Neil M Coe & Yong-Sook Lee & Steve Wood, 2017. "Conceptualising contemporary retail divestment: Tesco's departure from South Korea," Environment and Planning A, , vol. 49(12), pages 2739-2761, December.
    11. Park, Jeong-Yang & Harris, Simon, 2014. "Microfoundations for learning within international joint ventures," International Business Review, Elsevier, vol. 23(3), pages 490-503.
    12. Aarti Krishnan, 2023. "Embeddedness beyond the lead firm in global production networks: Insights from Kenyan horticulture," Environment and Planning A, , vol. 55(8), pages 1859-1883, November.
    13. Martin Hess & Henry Wai-Chung Yeung, 2006. "Whither Global Production Networks in Economic Geography? Past, Present, and Future," Environment and Planning A, , vol. 38(7), pages 1193-1204, July.
    14. Nunez-Picado, Adriana & Martinus, Kirsten & Sigler, Thomas, 2022. "Junior Miner internationalisation in the globalising mining industry," Resources Policy, Elsevier, vol. 79(C).
    15. Li, Shenyu & Popkowsky Leszczyc, Peter T.L. & Qiu, Chun, 2023. "International retailer performance: Disentangling the interplay between rule of law and culture," Journal of Retailing, Elsevier, vol. 99(2), pages 193-209.
    16. Frasquet, Marta & Dawson, John & Calderón, Haydeé & Fayos, Teresa, 2018. "Integrating embeddedness with dynamic capabilities in the internationalisation of fashion retailers," International Business Review, Elsevier, vol. 27(4), pages 904-914.

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