Defensive strategies of local companies against foreign multinationals evidence from Chilean retailers

Abstract

Many retailers have been expanding into foreign markets, although not all such attempts at internationalization have been successful. This study examines the actions taken by Chilean retailers that negatively affected the operations of Home Depot, Carrefour and J.C. Penney in Chile. The results show that the strategies employed by local companies have consisted in: (1) becoming informed about the company's strengths and weaknesses, while imitating its best practices; (2) deepening their own market know-how and hiring high-level executives to lead defensive strategies; (3) opening stores in strategic places in order to win advantages concerning location; and (4) investing in technology and the training of employees. The overall effect on the market has been one of concentration and consolidation of the retail industry.