The “Continuously Morphing” Retail TNC During Market Entry: Interpreting Tesco’s Expansion into the United States

One important element of recent conceptualizations of the distinctive nature and challenges of retail transnational corporations (TNCs) is a focus on the mutual transformation of both the markets entered by the retail TNCs and, reciprocally, of the organizational structures of the firms themselves. There are important similarities between this view of ongoing transnational-operation-induced organizational transformation of the retail TNCs and processes that strategic and organizational management scholars describe as “continuous morphing.” In this article, we provide a theoretically informed study of one of the most dynamic of the retail TNCs (Tesco plc) “morphing” its organizational structures and competencies during a high risk, but potentially transformational, market entry into the western United States. The article positions the study within the rapidly emerging literature on transnational retail and the global economy, interprets the innovative dimensions of Tesco’s U.S. market entry—particularly its attempts to achieve “territorial” and “network embeddedness”—through the conceptual lens recently provided by economic geographers, and assesses ongoing transformational impacts of the entry on the firm. It adds value to the literature on retail foreign direct investment by documenting the ways in which this leading retail TNC has attempted both to reconfigure its existing capabilities and to develop the new capabilities required to support its U.S. market entry via a combination of processes that we describe as transference, splicing, and enhanced imitation.