- •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
4. Rolf Group
The company is owned by Cyprus trusts. Mr. Sergey Petrov left the Company as its Manager and Shareholder in 2007 and completely transferred the ownership to Cyprus trusts.
The Group consists of several business directions:
ROLF Retail (ROLF dealerships), ROLF Finance & BlueFish (used cars sales);
ROLF Distribution of Mitsubishi (ROLF Import);
ROLF SCS (ROLF Logistic);
Spare parts distribution (We Love Parts).
Country |
Russia |
Year of entry |
1991 |
Industry/ business area |
Retail, logistics |
Entry mode |
It is wholly owned by Cyprus trusts Russian company, which operates in the national market. Has a few subsidiaries which were established as joint ventures. |
Motives |
Firm is not presented in foreign markets. |
Firm specific advantages used on the foreign market |
NOT PRESENTED |
First mover or follower |
NOT PRESENTED |
Type of state involvement in the process of internationalization |
State was not involved into the process of internationalization of this company, as it does not fit its interests, and this process is ruled only by company’s and partners’ ambitions. |
Evaluation of the success of the internationalization |
NOT PRESENTED |
5. M.Video
Beneficiaries of the company (September 2012): President Alexander Tynkovan, board member Michael Tynkovan, CEO Paul Breev. Part of the shares is in free float (RTS: MVID, MICEX: MVID).
In early November 2007, the IPO was made in which shares were sold for $ 364.875 million. Retailer’s capitalization reached $ 1.25 billion.
Country |
Russia |
Year of entry |
1993 |
Industry/ business area |
Retail |
Entry mode |
It is wholly owned Russian company, which operates in the national market. |
Motives |
Firm is not presented in foreign markets. |
Firm specific advantages used on the foreign market |
NOT PRESENTED |
First mover or follower |
NOT PRESENTED |
Type of state involvement in the process of internationalization |
State was not involved into the process of internationalization of this company and is not supposed to, as it does not fit its interests, and this process can only be caused by company’s and partners’ ambitions. |
Evaluation of the success of the internationalization |
NOT PRESENTED |
6. Dixi Group
State influence:
Ownership type: The Mercury Group of Companies, a diversified holding company, owns a controlling stake in OJSC DIXY Group. The Mercury Group core assets are as follows:
Megapolis Group of Companies, Russia's largest distributor of FMCG products and one of the world's largest distributors of tobacco products;
SovInterAutoService, one of the largest trucking companies in the CIS backed by more than 30 years of truck transport within Russia in Western and Eastern Europe and Asia;
The Mercury Development group of companies, known for projects such as construction of class A+ multipurpose Mercury City Tower at Moscow City development and M.V.Frunze Resort in Sochi, and others;
JSC Gorevsky GOK, Russia's largest polymetal (lead, zinc) producer and smelter;
Turboholod Manufacturing Facility (a developer of turboexpanders for the oil and gas industry);
The Degtyarev Plant (a manufacturer of civilian and military equipment).
Participation in state-organized contracts and projects: no major projects or contracts
State representation in the firm through board membership: no state representation in DIXY BOD
Financial and tax support: more often legal barriers are created and state regulations refer to retail operations as business activities of the company are connected with commonly used and regulated consumer goods, therefore, state authorities monitor the company operations, proper licensing agreement fulfillment, conditions of storage of the goods and their sale, etc.. For instance, there was a case when Rosalkogolregulirovanie intended to cancel alcohol licenses of the wholesaler DIXY-Petersburg when alcohol with counterfeited stamps was found in the company warehouse.1 During crisis Victoria Group was provided with governmental financial support. However, it was not very efficient and helpful to the supermarket chain.2
Internationalization:
Country |
The company is present only domestically in Russia, in Moscow, St.Petersburg and Central3, North West4 and Urals5 districts. The total quantity of stores is 1489 within Russia. It started operating in 1999 in Moscow (DIXI) and Yekaterinburg (Megamart), expanded in 2000 to St.Petersburg (DIXY). |
Year of entry |
- |
Industry/ business area |
One the of Russian leading retailers of food and everyday products (accounts for more than half of retail market for food and everyday products in RF)6; It serves the mass consumer in soft discount format; Brands of the Group are the following: DIXI, Victoria (supermarket and quartal), Minimart, Megamart, Deshevo, Cash; Over 37 000 employees; Store formats include:
|
Entry mode |
- |
Motives (potential motives for future perspectives) |
It is expanding rapidly but only domestically (to various regions); it is enjoying benefits of diversification of formats of stores within Russia. |
Firm specific advantages used on the foreign market (that are currently used during expansion to new markets domestically and can be potentially used in internationalization) |
|
First mover or follower |
- |
Type of state involvement in the process of internationalization |
No internalization yet |
Evaluation of the success of the internationalization |
No internalization yet |
In March 2011 DIXI Group acquired 100% of shares of Victoria Group, another retail chain; one of the vendors of this transaction was Victoria Alliance Limited formally registered in Cyprus. Federal Antimonopoly Service approved this transaction.9 Another international interaction could refer to debt financing that the company attracts, for example DIXY Group signed an agreement with UniCredit Group and other Russian banks (Rosbank, Gazprombank, Bank VTB, etc.) to attract bank financing in the amount of 547,3 mln. USD (to refinance current debt of the company and for operating purposes).10