“International whole selling, retailing, and franchising; including the table 7.
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Question
“International whole selling, retailing, and franchising; including the table 7.1 and the H & M concept. Read, prepare, and write a complete analysis!
“H&M’s business concept is to offer fashion and quality at the best price. H&M maintains a strong position in more than 40 markets, and ever since opening the rst store in 1947, H&M has pursued its quest for constant improvement. By demonstrating exibility and listening to the customers, H&M is able to adapt quickly to rapidly changing environments and trends. A competitive combination of quality and fashion at the best price allows H&M to offer customers the best value for money in every market” ( www.hm.com).
International Wholesaling, Retailing, and Franchising 204
Wholesaling, retailing, and franchising are three market channel options that can be used effectively to engage the global marketplace. These also place the global rm in the right situation and allow it to be successful through an arms-length connection to the customer or to be in direct contact with end customers around the globe. To illustrate the wholesaling, retailing, and franchising options, the best way is to use real-world examples to explain what each option can do for a rm. Wholesaling involves transactions in which products are bought for resale, for making other products, or for general business operations. The role of wholesalers is critical in supply chains since they often facilitate the cross-border ow of products within the outbound portion of the chain. A strong advocate for wholesalers, with some 40,000 members, is the National Association of Wholesaler- Distributors (www.naw.org). Three examples of wholesalers are Tech Data, Worldwide Brands, and International Wholesale Tile. Tech Data, a U.S. company, has a unique position and business model for a wholesaler: “As one of the world’s largest wholesale IT distributors, Tech Data is the conduit through which the power of technology ows to the world. In scal year 2011, we sold $24 billion of IT products to more than 125,000 technology resellers in over 100 countries. Every day, these resellers depend on us to help them cost-effectively support the technology needs of end users of all sizes, including small- and medium-sized businesses, large enterprises, educational institutions, government agencies, and consumers” (www. techdata.com). Worldwide Brands, also a U.S. company, is another example of a wholesaler. “Since 1999 we have been nding and Certifying 100% genuine Dropshippers and Light Bulk Wholesalers that are willing to work with small home-based online sellers. We visit warehouses, meet the Manufacturers and nd out who the real Dropshippers & small volume Wholesalers really are and then add them to our Directory. Our Directory represents MILLIONS of top-level whole-sale products from THOUSANDS of 100% Certied Dropshippers and Bulk Wholesalers that you can use for your online store or auc tions. These are the same Suppliers used by big Retail Stores” (www. worldwidebrands.com). International Wholesale Tile, another U.S. wholesaler, “is a provider of premium quality porcelain, ceramic and natural stone tile products to retail oor covering stores, design centers and specialty tile shops. We pride ourselves on being ‘your quality supplier, not your competition,’ and that’s why we don’t sell direct to the consumer. Our main facility, located in Palm City, Florida, houses an inventory that covers more than 14 million square feet. We run several merchandising and marketing campaigns to raise visibility and awareness of our lines and drive trafc to our dealers’ locations. IWT markets tile from Europe, South America and Asia. Our focus remains true: sell the highest quality tile to independent dealers, stocking distributors and buying groups” (www.international wholesaletile.com). Retailing refers to all transactions in which the buyer intends to consume the product through personal, family, or household use. A retailer is “an organization that purchases products for the purpose of reselling them to ultimate consumers.” A strong advocate for retailers, with members in some 45 countries, is the National Retail Federation (www.nrf.com). From Sweden, the home country of the rst author of this book, comes H&M as a great illustration of a retailer. “H&M’s business concept is to offer fashion and quality at the best price. H&M maintains a strong position in more than 40 markets, and ever since opening the rst store in 1947, H&M has pursued its quest for constant improvement. By demonstrating exibility and listening to the customers, H&M is able to adapt quickly to rapidly changing environments and trends. A competitive combination of quality and fashion at the best price allows H&M to offer customers the best value for money in every market” (www.hm.com). Another unique retailer is Ahold, from the Netherlands. “Ahold is an international retailing group based in the Netherlands, with strong local consumer brands in Europe and the United States. Our foundation is selling great food—and supermarkets are our core business. We also operate other formats and channels so that our customers can shop whenever and wherever is most convenient for them. We provide customers with the best possible value, assortment, and shop- ping experience. Our vision is to offer all of our stakeholders—our customers, employees, suppliers, shareholders, and the communities we serve—better choice, better value, better life, every day. We are committed to acting responsibly in all that we do” (www.ahold.com). Like Ahold, Tesco, from the United Kingdom, is also a good illustration. “Tesco was founded in 1919 by Jack Cohen from a market stall in London’s East End. Over the years, our business has grown and we now operate in 14 countries around the world, employ over 500,000 people and serve tens of millions of customers every week. We have always been committed to providing the best shopping experience. Today, we continue to focus on doing the right thing for our customers, colleagues and the communities we serve. We are dedicated to bringing the best value, choice and service to our millions of customers each week” (www.tesco.com). Franchising is the third alternative market channel. It is an arrangement in which a supplier (the franchisor) grants a dealer (the franchisee) the rights to sell its products in exchange for some type of consideration. 8 A strong advocate for franchising, with more than 1,100 franchisor members and more than 12,000 franchisee members worldwide, is the International Franchise Association (www.franchise.org). Uniquely positioned in the global marketplace in 2013, the U.S. rm Subway has become the largest fast food chain in the world. “Back in 1965, Fred DeLuca set out to fulll his dream of becoming a medical doctor. Searching for a way to help pay for his education, a family friend suggested he open a submarine sandwich shop. With a loan of $1,000, the friend—Dr. Peter Buck—offered to become Fred’s partner, and a business relationship was forged that would change the landscape of the fast food industry. Fred soon learned the basics of running a business, as well as the importance of serving a well-made, high quality product, providing excellent customer service, keeping operating costs low and nding great locations. These early lessons continue to serve as the foundation for successful SUBWAY ® restaurants around the world” ( www.subway.com). Let’s go to Canada for another great example, Tim Hortons. “Tim Hortons opened its rst restaurant in Hamilton, Ontario in 1964. Since then, the focus on top quality, always fresh product, value, exceptional service and community leadership has allowed the chain to grow into the largest quick service restaurant chain in Canada specializing in always fresh coffee, baked goods and homestyle lunches. Tim Hortons enjoys iconic brand status in Canada and a strong, emerging presence in select regional markets in the U.S.” (www.timhortons.com). Europcar from France is our nal example of an international franchisor. “Europcar Groupe S.A., together with its subsidiaries, provides car rental services for business and leisure customers. It offers vehicles for short and medium term corporate and lei- sure rentals in Europe, Africa, the Middle East, Latin America, and the Asia-Pacic. As of April 24, 2012, the rm’s eet consisted of approximately 190,000 vehicles. It also engages in franchise operations and fuel sales activities. Europcar Groupe S.A., together with its strategic alliance with Enterprise Holdings, operates a car rental network with approximately 10,000 stations. The rm was founded in 1949 and is headquartered in Saint-Quentinen-Yvelines, France” (www.europcar.com).
Explanation / Answer
Retailer, wholesaler and franchiser are the three pillars of distribution channel. Manufacturers sell there with the help of wholesalers. In U.S.A. there are more than 40,000 members in the National Association of Wholesaler- Distributors. There are several examples of big wholesaler in U.S.A. like Tech Data, International wholesaler tile and worldwide brands. These wholesalers needed cost effective technologies which reduces the cost of the maintenance and warehousing. A retailer is also an important channel member of the channel distribution who resale the products to the customers. H & M has adopted the modern and new innovative techniques of business strategy and become a global player. H & M offer quality and fashion at optimum price to the customers. H & M is a Sweden base company. H & M has huge chain of his retail store. It was established its first retail outlet in 1947. Apart from H & M there are some other companies also like Tesco who follow the franchising concept to gain a big market share in global market. In this way we say that the role of channel members is very crucial for the success of a business enterprises.
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