Internalization of trade networks

Abstract

Background. Modern large trade organizations often, developing strategic development plans, decide on the need to internationalize their activities. The desire to take strong competitive positions both in the market of the country of origin and in the markets of other countries of the world require the various competencies from modern managers of trade. However, it is difficult to obtain them because of the lack of information on the methodological principles and practical results of the development and implementation of a strategic alternative, the selection and implementation of which would contribute to the economic growth and effective performance of the company. This is the need to determine the impact of the development of foreign trade networks on the economy of the recipient countries that determine the relevance of research related to the internalization of retail trade.
Analysis of recent research and publications. Some aspects of the effects of internalization, the impact of various factors on it and the management of the development of retail trade chains over the past five years have been researched in the works of foreign and domestic scholars.
The aim of the study is to determine the factors that determine the feasibility of setting and further implementation of strategic goals aimed at internalization in the field of retail trade.
Materials and methods. The statistical materials and author's own research on the development of foreign retail trade chains in Ukraine will be the information base of the study. To achieve the goal and objectives there were used the following methods: statistical data processing and interpretation; system analysis and synthesis; comparison, etc.
The results of the research. The author defined the groups of market factors and specific factors for retail trade that determine feasibility of setting and further implementation of strategic goals aimed at internalization of trade companies development. The motives, which encourage retail transnational corporations and other companies to implement the strategy of internalization, are revealed. The trends analysis and systematization of the consequences of global retail trade networks has been carried out. The factors that ensure efficiency of the development strategy of retail TNCs are established.
Conclusion. The expediency of setting and further implementing strategic goals aimed at internationalization in the retail sector is conditioned by two groups of factors: market and specific. The five main motivations that encourage managers of retail TNCs and other trading companies to select a strategy for internalization can be identified. Successful strategic development of retail TNCs is based on the chain of factors that provide the company with so-called territorial «rooting». Global informatization does not leave any time lag to retail TNCs for negative consequences, which can hinder the implementation of their strategic development plans, as soon as the public becomes aware of any facts about the worsening competitive positions of the retailer both in the domestic and foreign markets. Now retail TNCs in their development combine an internalization strategy with integration strategies and horizontal diversification or implement another strategic alternative to development in the markets of recipient countries – the consolidation strategy.