News Release
Even Shopkeepers Can Be International Traders - UU Research
Franchising is one of the lowest risk ways for UK retailers to expand into foreign markets, according to University of Ulster researchers.
In a paper presented to the British Academy of Management conference in Belfast this week, the UU researchers say using partners based in the export destination helps the retailers overcome barriers to expansion into the international marketplace.
The research found four main barriers to overseas expansion by UK retail SMEs – companies with an annual turnover of less than £25m. They are:
- Differences in foreign markets, particularly in culture and legislation.
- The financial capability and infrastructure of the retailers.
- Negative management attitudes to growth.
- Lack of training and knowledge.
The lack of financial and human resources can also inhibit the pace of expansion or even force companies to withdraw from overseas markets.
Management aversion to taking risk and lack of vision is another inhibiting factor and retailing industry sources also highlighted the lack of training and knowledge of foreign markets, including the inability to speak foreign languages, as barriers to going international.
The research was conducted by Dr Karise Hutchinson and Dr Barry Quinn of the UU’s School of Business, Retail and Financial Services and Professor Nicholas Alexander and Dr Anne-Marie Doherty of the School of Management and Business at the University of Wales was presented to the British Academy of Management conference being held at Belfast’s Waterfront Hall this week.
The researchers conducted an in-depth study of nine UK retailers who have successfully set up overseas operations. The retailers overcome the obstacles through concentrating in specialist/niche markets aimed at luxury or middle-market consumers; having a strong brand identity and networking with key organizations or partners in the destination country.
Franchising, licensing arrangements and concessions are the least costly way of expanding abroad. Using partners spreads the risk as well as the rewards and the partners are best placed to understand the nuances and subtleties of the overseas marketplace.
The researchers concluded that small-to-medium sized British retailers do have the capability to enter international markets provided they follow the rules of success demonstrated by the companies investigated.
Dr Hutchinson earlier this year was chosen to lead a UK-research study to help boost the international export profile of British retailing. She secured funding from the British Academy to examine why many retailing SMEs find it so difficult to expand into the global marketplace and what can be done to reduce those barriers.
The BAM conference is being held in Northern Ireland for the first time, and has been organised in association with the University of Ulster and Queen's University Belfast.
The theme of the event will focus on Building International Communities Through Collaboration looking at the way in which 'management' as a field of study adds to the knowledge and understanding of how individuals, groups and organisations can work together in a way that promotes enhanced performance.
UU’s Professor Marie McHugh, who is co-chair of the conference, said: “The UU has had a long association with the BAM, and we’re delighted that they are holding their 20th conference here. The BAM event is the leading management research conference in the UK, and it’s a tribute to the calibre of business-oriented research under way here in Northern Ireland that they have chosen Belfast as the venue for this event.”
For further information, please contact:
David Young
Telephone: 028 90366074
Email: David Young
