International Retailing as Embedded Business Models

Abstract

As retailers internationalize they interact with diverse socio-political-economic environments and the activities, processes, behaviours and outputs underpinning their business models evolve over time and space. Retailers are not passive, and through managerial agency they interpret the environment to compete and further their own commercial aims. Consequently, mutual interaction with the host environment means that changes may also occur in the established institutional norms in a market. Most existing studies have focused on the implications of territorial embeddedness for internationalizing retailers. In this article we also consider the societal and network forms of embeddedness identified by Hess, and illustrate how retailers transfer, negotiate and adapt their business model as they embed themselves in different institutional environments. A case study of IKEA is used to illustrate the synthesis of these two frameworks.