The results of the globalization is often hard to predict. The success depends on many factors no matter how much research and preparation the company has put into pre-hand. Per Tristrategy’s theory, the timing of introduction and macro environment, the market readiness, the synergy of the expansion and the willingness of adoption from the customers are the key to success.
Tesco, top British grocery chain(about 30% of the UK market share), is not doing well with its US business after the openings of its Fresh & Easy stores from 2007. Daily grocery is a sensitive area of every common folk’s life and some local taste and habits may not easily be changed over. Part of the reason of this globalization story is that US folks’ stickiness to their daily grocery habits were underestimated by Tesco. Although US market is best known for its cutting-edge innovations in many areas, US consumers can be very stubborn and traditional, esp. on living styles and daily habits, just like French folks can’t live without their daily baguettes, cheese and wine.
The other part of the reason is also the timing and location. When they first opened Fresh & Easy stores in 2007, they chose California, Arizona and Navada. These were the hardest hit housing markets which started melting down terribly from 2007.
On another side note, sensitivity to the local markets in globalization is always important, not only for businesses entering into a foreign market, but also for all economic and political initiations. Cultural and religious sensitivity is hard to be over-emphasized in today’s politics, but also in any globalization attempt for business. Relying on local supporters can help overcome some of the obstacles, but preparation in the mindsets of the business leaders and respects to these sensitivities are also super important if a smoother result is expected. It surely adds challenges to the concept of globalization.
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P.S. on 9/24/2013: An update on the Tesco story- On September 10, 2013, Tesco agreed to sell most of its Fresh & Easy chain (about 150 stores out of 200) to billionaire Ron Burkle’s Yucaipa investment company and to exit the U.S market after a six-year trial. The rest of the unsold stores will be closed.