Marketing Management, 16th Edition

Deciding Whether to Go Abroad

U.S. retailers such as The Limited and Gap have become globally prominent. Dutch retailer Ahold and Belgian retailer Delhaize earn almost two-thirds and three-quarters of their sales, respectively, in nondomestic markets. Foreign-based global retailers in the United States include Italy’s Benetton, Sweden’s IKEA home furnishings stores, and Japan’s UNIQLO casual apparel retailer.

Several factors draw companies into the international arena. First, certain international markets might present better profit opportunities than the domestic market. Second, a company might need a larger customer base to achieve economies of scale. A company might also decide to go abroad to reduce its dependence on any one market. Another ...