International Business Strategy, Metro Cash & Carry
Background
After building a successful global operation including stores in Russia and China, Metro Cash & Carry (MCC) are struggling to transplant their business model in India. This demonstrates the importance of local political backing in emerging markets and how a successful model (e.g. a political welcome and direct supply from farm to store) wasn’t followed. Despite sales growth, expansion in India has been disappointing predominantly because of restrictions in buying directly from farmers and poor PR.
Analysis of MCC competitive advantage
Metro’s success has been built upon its home-grown business model, backed by having an ability to be first to market. Utilising detailed market research to identify the needs of its customers e.g. catering for small businesses that can’t hold stock and therefore, providing a valuable service with useful opening hours, allowing sole traders the ability to pop in and out as his needs demand and offering ever expanding ranges of goods (rather than simply supplying cheap goods as other businesses-in-a-box have historically done). This ability to expand products from dry goods to fresh fish and meat to commercial equipment has kept MCC ahead of its competitors. Its market development is based upon growing with the market and adapting quickly to market and cultural trends – expanding rapidly as the market grows.
MCC has developed a level of customer service that has redefined and personalised the otherwise anonymous wholesaler. Despite not using traditional marketing functions, MCC, through the use of membership cards, has been able to capture customer details and buying habits and uses direct mailing techniques to personalise the way they interface with their customers, almost developing a “club”, thus expanding its market share through the use of data whilst keeping marketing costs low. Human Resource costs are also kept to a minimum during initial launch by managers adopting a hands-on approach, working in check out
After building a successful global operation including stores in Russia and China, Metro Cash & Carry (MCC) are struggling to transplant their business model in India. This demonstrates the importance of local political backing in emerging markets and how a successful model (e.g. a political welcome and direct supply from farm to store) wasn’t followed. Despite sales growth, expansion in India has been disappointing predominantly because of restrictions in buying directly from farmers and poor PR.
Analysis of MCC competitive advantage
Metro’s success has been built upon its home-grown business model, backed by having an ability to be first to market. Utilising detailed market research to identify the needs of its customers e.g. catering for small businesses that can’t hold stock and therefore, providing a valuable service with useful opening hours, allowing sole traders the ability to pop in and out as his needs demand and offering ever expanding ranges of goods (rather than simply supplying cheap goods as other businesses-in-a-box have historically done). This ability to expand products from dry goods to fresh fish and meat to commercial equipment has kept MCC ahead of its competitors. Its market development is based upon growing with the market and adapting quickly to market and cultural trends – expanding rapidly as the market grows.
MCC has developed a level of customer service that has redefined and personalised the otherwise anonymous wholesaler. Despite not using traditional marketing functions, MCC, through the use of membership cards, has been able to capture customer details and buying habits and uses direct mailing techniques to personalise the way they interface with their customers, almost developing a “club”, thus expanding its market share through the use of data whilst keeping marketing costs low. Human Resource costs are also kept to a minimum during initial launch by managers adopting a hands-on approach, working in check out