Entering the European market

 see also: Europe,  market entry ,  Marketing,  strategy , Exports , Import Export business models,  export subsidy ,  Spain market entry for cachaca , barriers to entry  , 5 forces analysis  , Entering the US market from overseas

example:  Best Buy

article from FT.com

Brad Anderson, the 58-year-old chief executive of Best Buy, says the leading US consumer electronics retailer has been "extraordinarily concerned" about the risks of rapid international expansion.  But last week, Mr Anderson announced a $2.2bn investment in a retail Joint Venture in Europe with the UK's Carphone Warehouse, with stores in nine different European countries, alongside initial plans for its own-brand larger-format stores in Europe. Best Buy will also open stores this year in Turkey and Mexico, adding to stores in Canada and China.

"We've looked at the history here," says Mr Anderson, who argues that the record of US retailers going to Europe is "arguably worse" than that of Europeans who have expanded to the US.

In an interview with the Financial Times in New York yesterday, Mr Anderson maintained that Best Buy has reduced some of the risks of its latest international expansion by following a strategy it has pursued before in Canada and China - slowly developing its own-brand stores alongside joint ventures or acquisitions run by experienced local management.

"We're not intending to come in and tell them how to do it; we're intending to provide resources to help them do it," he says of the joint venture.

"If you've got genuinely independent management teams that function in a highly independent way, we don't think there's the same-scale problem as if you are trying to transplant a given specific strategy."

While there is ongoing speculation among investors in Europe that Best Buy might be interested in taking over all of the retail venture, or making further retail acquisitions, both Mr Anderson, and Bob Willett, head of the group's international division, argue that the retailer needs to continue its cautious strategy.

Mr Willett says that the retailer "knows how to open stores, once we are clear about what we are doing".

"If you get in right in those first few stores, then you can scale fast. The danger is - and I think this is where others have gone wrong - is to try to scale too quickly."

For Mr Anderson, the international expansion marks a long journey from 1976, when after deciding not to follow his father into the Lutheran church, he started working at a hi-fi store in Minnesota that eventually became Best Buy. He drove 80 miles to install a set of speakers in the home of his first customer, so desperate was the young Mr Anderson to make the sale.

He has argued that that first sale established a theme that eventually translated into the embrace of customer centricity (see box) at Best Buy's large stores, which dot shopping plazas across America. This year the strategy is entering a second phase, expanding the concept to increasingly specific groups of local neighbourhood customers.

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