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Organizational Challenges and Strategic Responses of Retail TNCs in Post-WTO-Entry China

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  • Wance Tacconelli
  • Neil Wrigley

Abstract

In the context of a market characterized by the enduring legacy of socialism through governmental ownership of retail businesses, the continued presence of domestic retailers, and increasing levels of competition, this article examines the organizational challenges faced by, and the strategic responses adopted by, a group of leading food and general merchandise retail transnational corporations (TNCs) in developing networks of stores in the post-WTO-entry Chinese market. On the basis of extensive interview-based fieldwork conducted in China from 2006 to 2008, the article details the attempts of these retail TNCs to embed their operations in Chinese logistics and supply networks, real estate markets, and consumer cultures—three dimensions that are fundamental to the achievement of market competitiveness by the retail TNCs. The article illustrates how this process of territorial embeddedness presents major challenges for the retail TNCs and how their strategic responses vary substantially, indicating different routes to the achievement of organizational legitimacy in China. The article concludes by offering an analysis of the various strategic responses of the retail TNCs and by suggesting some future research propositions on the globalization of the retail industry.

Suggested Citation

  • Wance Tacconelli & Neil Wrigley, 2009. "Organizational Challenges and Strategic Responses of Retail TNCs in Post-WTO-Entry China," Economic Geography, Taylor & Francis Journals, vol. 85(1), pages 49-73, January.
    • Handle: RePEc:taf:recgxx:v:85:y:2009:i:1:p:49-73
    DOI: 10.1111/j.1944-8287.2008.01003.x
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    Cited by:

    1. Cédric Durand & Neil Wrigley, 2009. "Institutional and Economic Determinants of Transnational Retailer Expansion and Performance: A Comparative Analysis of Wal-Mart and Carrefour," Environment and Planning A, , vol. 41(7), pages 1534-1555, July.
    2. Steve Wood & Jonathan Reynolds, 2011. "The Intrafirm Context of Retail Expansion Planning," Environment and Planning A, , vol. 43(10), pages 2468-2491, October.
    3. Shin, Sanghyup & Kim, Hyun & Kim, Woohyoung, 2020. "Transnational corporations’ localization strategies via retail attributes: Focus on Chinese market," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    4. Burt, Steve & Coe, Neil M. & Davies, Keri, 2019. "A tactical retreat? Conceptualising the dynamics of European grocery retail divestment from East Asia," International Business Review, Elsevier, vol. 28(1), pages 177-189.
    5. Xuqi Chen & Zhifeng Gao & Lisa House & Jiaoju Ge & Chengfeng Zong & Fred Gmitter, 2016. "Opportunities for Western Food Products in China: The Case of Orange Juice Demand," Agribusiness, John Wiley & Sons, Ltd., vol. 32(3), pages 343-362, July.
    6. Rúben Rocha & Anderson Rei Galvão & Carla Susana Marques & Carla Mascarenhas & Vítor Braga, 2020. "Cooperation Networks and Embeddedness—The Case of the Portuguese Footwear Sector," Sustainability, MDPI, vol. 12(22), pages 1-22, November.
    7. Baines, Joseph, 2015. "Encumbered Behemoth: Wal-Mart, Differential Accumulation and International Retail Restructuring," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 149-166.
    8. Chen, Xuqi & Gao, Zhifeng, 2013. "Chinese Consumer Knowledge, Perception and Willingness to Pay for Orange Juice Products: Any Opportunities for the U.S. Juice Producers？," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 143104, Southern Agricultural Economics Association.
    9. Anika Trebbin & Martin Franz, 2010. "Exclusivity of Private Governance Structures in Agrofood Networks: Bayer and the Food Retailing and Processing Sector in India," Environment and Planning A, , vol. 42(9), pages 2043-2057, September.
    10. Sina Hardaker, 2020. "Embedded Enclaves? Initial Implications of Development of Special Economic Zones in Myanmar," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(2), pages 404-430, April.
    11. 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.
    12. 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.
    13. Junxiong Li & Alan G. Hallsworth & J. Andres Coca‐Stefaniak, 2020. "Changing Grocery Shopping Behaviours Among Chinese Consumers At The Outset Of The COVID‐19 Outbreak," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 111(3), pages 574-583, July.
    14. Sina Hardaker, 2018. "The Emerging Retail Market in Myanmar - An Institutional Perspective of Foreign Retailers’ Market Entry Decisions," International Business Research, Canadian Center of Science and Education, vol. 11(1), pages 19-33, January.

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