- •St. Petersburg State University Graduate School of Management
- •Analysis of the Russian retail industry and companies’ motives for internalization.
- •Introduction
- •2. Magnit
- •3. Auchan
- •4. Rolf Group
- •5. M.Video
- •6. Dixi Group
- •7. Lenta
- •9. Eldorado
- •10. Svyaznoy
- •11. Avtomir Group
- •12. Evroset
- •13. Leroy Merlin Vostok
- •14. The Seventh Continent
- •15. Ikea Dom
- •16. Avilon ag
- •17. Sportmaster
- •18. Nezavisimost Group
- •19. Atlant-m Holding
- •20. Crocus International
- •21. Media-Saturn Russia
- •22. Real
- •23. Monetka
- •24. Grinn Corporation
- •25. Business Car
- •26. Centr Obuv
- •27. Globus
- •28. Avon Beauty Product Company
- •29. Atak
- •30. Pharmacy Chain 36.6
- •31. Roznitsa-1
- •32. Holiday
- •33. Oriflame Cosmetics
- •34. Azbuka vkusa
- •36. Genser
- •37. Amway
- •38. Major Auto
- •33 “Российские компании, которые получат господдержку. Полный список”.25.12.2008 http://ria.Ru/crisis/20081225/158098785.Html
- •63 “В Украину выходит сеть «Азбука вкуса»”. Building. 25.01.2013.. Http://building.Ua/V-Ukrainu-vyhodit-set-Azbuka-vkusa
32. Holiday
State influence: Company has several federal suppliers. The only influence could be the power of these suppliers over Holiday, but it is not significant.57
Internationalization: Holiday is a leading retail chain of Western Siberia. Supermarkets of the chain are presented in 5 Russian regions. Company doesn’t have any plans for internationalization.
33. Oriflame Cosmetics
Oriflame is a public company, which was founded by Roberts and Jonas Jochnick in 1967.
Internationalization:
Country |
Russia |
Year of entry |
1996 |
Industry/ business area |
Beauty products retailer |
Entry mode |
1992 – first offers of Oriflame products in Russia.58 1996 – start of direct sales to Russia and of implementation of multilevel marketing plan. 2004 – start of the first wholesale store construction. February 2010 – purchase of land 40 km from Moscow where logistic and production center will be located (greenfield FDI). The costruction will be finished in 2013 and this Oriflaime lant would be the largest in the world. The amount of investments is about €125-175 mln.59
|
Motives |
High potential of the Russian market, increasing interest in cosmetic products and in opportunities to get the additional income. No competitors. Positive response on the products in 1992 before the official start of direct sales. |
Firm specific advantages used on the foreign market |
Natural cosmetics, opportunities to build a career, direct sales (individual approach to customers) |
First mover or follower |
The company was the first mover. Its main competitor Avon entered the market few years later. Avon and Oriflame have similar product ranges, however, they have different values and different network marketing schemes. Avon is mainly focused on the clients (brochures, discounts, but personal sales only), whereas Oriflame focuses on both clients and distributors (brochures, special offers and unlimited earnings from sponsorships)60 . |
Type of state involvement in the process of internationalization |
Oriflame has a potitive image in Russia. In 2009 Oriflame became a laureate of the international award of the State Duma Committee on Economic Policy and Entrepreneurship.61 Despite the fact that state doesn’t involved directly into the process of internationalization, the positive attitude towards Oriflame helped the company to purchase a piece of land in the ecological zone 40km from Moscow in 2010. |
Evaluation of the success of the internationalization |
Oriflame is an example of extremely successful internationalization in Russia. There was a rapid growth of the company’s sales. During the years of its presence in Russia the company managed to open two plants in the form of Greenfield FDI’s. |