International Business Strategy, Metro Cash & Carry

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Background After building a successful global operation including stores in Russia and China, Metro Cash & Carry (MCC) are struggling to transplant their business model in India. This demonstrates the importance of local political backing in emerging markets and how a successful model (e.g. a political welcome and direct supply from farm to store) wasn’t followed. Despite sales growth, expansion in India has been disappointing predominantly because of restrictions in buying directly from farmers and poor PR. Analysis of MCC competitive advantage Metro’s success has been built upon its home-grown business model, backed by having an ability to be first to market. Utilising detailed market research to identify the needs of its customers…show more content…
These small businesses didn’t target cafes and restaurants but predominantly retails stores. By invitation of Moscow’s forward thinking Mayor, who had witnessed Metro’s businesses in other countries, MCC was able to be first to market. The mayor believed that Metro would improve Moscow’s distribution system, create flexible taxation and reduce black market sales. The company was seen as a saviour and with full political backing went about developing an infrastructure which modernised the city and cleaned up the supply chain. Such was the political backing that the opening of an MCC store became an occasion for celebration with the status of a grand opening. MCC transformed Moscow’s distribution system and the company gained a reputation for being pioneering. Local people were happy as they had choice, quality, cleanliness and good prices. Local producers were happy as infrastructure and distribution were improved, wastage was reduced and investment was on a large scale. Government was happy as the city was being modernised and taxes being collected through appropriate channels and black market trading was being challenged. MCC will remain ahead of the competition by defining stores, lines and products specifically by demographic helping to maintain their strong market share. MCC accepts that there is strong competition in Russia but they are confident of keeping

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