Ambitious business within the retail industry exploring international expansion
Since opening their first store over 30 years ago, our client has established themselves as a leading clothing brand with stores across all corners of UK. Keen to capitalise upon recent and continuous significant growth a strategy to expand beyond the UK was established meeting their ambition to continue the upward trend.
Typically for retail businesses, there is a limited amount of commerce that is able to take place in the UK, and therefore it is necessary to consider expansion into other international markets, specifically North America. This was something that our client was interested in doing but had never done before. Understandably, there was the need for the business to get this right first time, an effective way of initially understanding what steps to take (and avoid) when implementing strategies for international expansion are to consider what other similar businesses have done in their international expansion strategies and within that, consider what has been successful and unsuccessful. As a result, we partnered with our client to conduct the research to understand the practices of retail businesses who have undergone similar expansion and provide competitor intelligence to underpin that international business growth.
Beyond the international growth strategy, our client also recognised the need to understand more about the organisational structures of their competitors, particularly in establishing any changes it might need to make to its own structure to support its growth plans.
Research Process
Our research consisted of a range of processes. Initially, we identified 27 businesses within the retail industry who have undergone international expansion and have parallels with our client in terms of industry, size and growth rate. Our insight included descriptive analysis of each company’s expansion process, including timeline, the countries they have expanded to and commentary on the overall success of their international growth regime.
Following this, we identified and engaged with over 100+ individuals who currently hold a senior position (Head of or above) within the aforementioned businesses, conducting in-depth telephone interviews to gain information on the business’ organisational structures and strategic plans regarding past and present international expansion.
Our telephone research was complemented by desk based research and analysis which examined investors reports, online articles and over 1,600 online profiles of employees within the relevant companies. We also identified the range of strategies available within undergoing international expansion, providing commentary on individual businesses who have underwent each strategy, discussing how they went about it as well as how and why they were or were not successful.
While it is key to understand what processes each company undertook, it is also important to understand the functional structures within each of the business, this is fundamental to our client considering what processes they may choose to undertake as they will be able to consider what companies who share similar parallels with them did. We provided our client with infographics and commentary on the key trends and observations in the financial performances of businesses within the retail industry, examining factors such as:
- Gross Profit Annual Growth Rate,
- Global Turnover Annual Growth Rate, and
- FTE Annual Growth Rate.
It was also key for our client to consider the structure of each of their competitors when considering options within international expansion. Of course, some may undertake several strategies within international expansion due to the structure of their business not enabling them to do much more or may demonstrate too high of a risk. From the information collected through interviews with Stakeholders within the target organisations and open-source data, including:
- Average Function Size,
- Function Size vs Turnover and
- the average number of senior leaders in the Head Office Functions within each of the necessary business functions.
Results
Once we had completed the collation of the necessary data and statistics, we were able to provide our client with a report with a range of commentary, graphs and insights to demonstrate the practices of businesses who have underwent international expansion.
Our findings were presented in a series of presentations to senior stakeholders, tailoring our content accordingly to their business function.
Our research has provided our client with insights into the practices that companies within the same industry have undertaken in their own international expansion plans, thus serving as an integral part of our clients process in considering the options of what would be best for them.
