Going Global Case Study

Metro AG: The German Retailer's Internationalisation Strategies through 'Cash & Carry' Model

OR

Abstract:
Started as a wholesale store in 1964, Dusseldorf (Germany)-based Metro AG transformed itself into the largest retailer in Germany and the third largest in the world. Though the company generated the majority of its sales from its home market, retail sales in Germany began to show a decline during the early 21st century due to a high unemployment rate, the country's faltering economy, a rise in inflation and an increase in taxes. As a result, Metro ended up operating in a high-cost structure environment and living with low profit margin, which in turn had an adverse effect on the company's profits in Germany. To offset the declining sales in its domestic market, Metro pursued a strategy of expansion and internationalisation through its 'Cash & Carry' business model, and started focusing on emerging markets in Asia and Eastern Europe. Analysts opined that Metro's focus on international markets had been instrumental in driving its growth in the light of the slowed growth in its home country.

Pedagogical Objectives:

• To highlight the international expansion strategies adopted by Metro through its 'Cash & Carry' business model to offset the declining sales in its domestic market
• To highlight the initiatives taken by the company to strengthen its position in the emerging markets of Asia and Eastern Europe.

Contents:

• Introduction
• Metro – An Overview
• Metro's Expansion Strategies in China, India, Japan and Russia
• Future Plans

Keywords : Metro’s globalisation strategy; Growth Strategies Case Study; Declining sales in Germany; Expansion in Europe and Asia; Localised offerings; Expansion through ‘Cash & Carry’ model