The Supporting Role of Logistics during the Early Stage of Retail Internationalisation

Abstract: Retail internationalisation refers to the establishment of retailers into foreign sales markets and is an important success factor for many retail chains. Logistics has been acknowledged as an important prerequisite and key component of retail internationalisation, enabling physical distribution to new foreign markets as well as ensuring customer satisfaction in terms of on-time delivery and product availability. Despite the recognition of logistics, logistics managers struggle to adapt their logistics organisation and operations in order to efficiently and effectively support retail internationalisation due to the complexity of operating in multiple markets. Previous research seldom mentions how logistics supports retail internationalisation, especially when retail chains are at the beginning of their retail-internationalisation journey. By exploring the supporting role of logistics during the early stage of retail internationalisation, retailers can better understand how logistics organisation and operations can be organised in order to successfully expand into foreign sales markets. Therefore, the purpose of this licentiate thesis is to:Explore the supporting role of logistics during the early stage of retail internationalisation.This licentiate thesis is based on an abductive, multiple-case-study approach that combines empirical data with literature in an iterative process in order to explore the supporting role of logistics during the early stage of retail internationalisation. The selected case companies were three large-sized Swedish retail chains that have recently established themselves into nearby foreign sales markets.The findings of this licentiate thesis suggest that logistics plays both a reactive and a proactive supporting role during the early stage of retail internationalisation. The reactive supporting role refers to logistics that adapts to predetermined conditions set by the retail company’s top management team. As a reactive supporter, the logistics organisation is typically involved at an operational level and scales up its logistics operations in order to supply multiple markets. Beyond its reactive role, logistics can also play a proactive supporting role. This refers to its involvement at a strategic level within the retail company where it can influence the conditions of retail internationalisation. When logistics is involved more proactively, its operations can become better aligned with the other company operations involved in retail internationalisation. Furthermore, proactive logistics support enables more efficient and effective logistics that can better cope with increased complexity as well as more effectively keeping track of logistics costs. In addition to these findings, the importance of top management has been identified as a key aspect of proactive logistics support. More specifically, logistics competence within the top management team enables logistics to be prioritised at a strategic level and to be better integrated during retail internationalisation, including during individual establishments into new markets. The findings also suggest that the importance of logistics increases over time during retail internationalisation. The more markets the retailer enters, the more important efficient logistics becomes in order to deal with both complexity and logistics costs. By involving proactive logistics from the start of retail internationalisation, retail chains can more efficiently and effectively establish into and operate within foreign sales markets, which in turn supports a sustainable retail internationalisation.One of the main academic contributions of this licentiate thesis has been to study logistics in the specific context of retail internationalisation, which has previously not been researched in any great detail. In addition, logistics has often been studied as a static aspect, but in this thesis it is studied from a dynamic perspective in order to understand how its supporting role changes over time during the early stage of retail internationalisation. Another important contribution is that the role of logistics has been studied from both a strategic and an operational level, as previous research has mostly focused on the strategic level of logistics related to retail internationalisation. In terms of practical contributions, this licentiate thesis clarifies the logistics characteristics and supply-chain capabilities that support the early stage of retail internationalisation. This licentiate thesis can also help practitioners to better prepare their logistics organisation and logistics operations for a future retail internationalisation, as well as helping them to avoid making logistical mistakes during the early stage of retail internationalisation.