PLEASE RESPOND TO THIS, I MUST COMPLETE A PEER REVIEW ON THE BELOW. Thanks
Please demonstrate critical thinking abilities. No fewer than 250 words for post. Do not summarize the post and/or course concept(s), but perhaps comment on concepts directly applicable to your workplace.
For this response, should outside sources be used to support the content within the postings, proper in-text citations and correctly formatted references should be prepared consistent with the APA (6th edition). The list of references should be physically positioned at the end of the postings.
Burlington Coat Factory was established in 1924 servicing women’s coats and suits (Burlington Coat Factory, 2017). In 1972, they rebranded, selling all merchandise from home décor, toys and men’s apparels (Burlington Coat Factory, 2017). This company currently services the United States and Puerto Rico (Burlington Coat Factory, 2017).
Burlington Coat Factory provides products at a discounted rate (Burlington Coat Factory, 2017), therefore, if this company were to expand globally, it would provide a means for countries that are not performing financially as well. According to the text, Walmart expanded into Mexico for this reason and as a result, their growth increased and their international sales were .94% more than sales in the United States ((Dyer, Godfrey, Jensen, & Bryce, 2016). If Burlington outsourced their country, they could save money through cheaper labor.
Burlington Coat factory can utilize the arbitrage strategy and zero in on the economic arbitrage. Economic arbitrage is defined by the text as “capitalizing on differences in costs by buying where costs are low and selling where prices are high” ((Dyer et al., 2016, pg., 184). By capitalizing on the economic arbitrage, Burlington can profit off the lower costs of materials for resell. The risks associated with this strategy could be the rising capital interest rates in Mexico (Dyer et al., 2016).
Another strategy that can be incorporated is the transnational strategy. The transnational strategy is the method of operating business in accordance to the host country (Dyer et al., 2016). If Burlington were to move to Europe, they would have to adapt to the smaller shop structure as Europeans do not like the big box stores and prefer small shops (Groth, 2011). A risk associated with this strategy would be is the possibility of not implementing the stores correctly in the environment and having to compete with local stores that are already established and preferred.
International expansion is a viable strategy for Burlington Coat Factory as they can capitalize on the advantages in other countries. In order for Burlington is succeed in the transitions, they would need to ensure they understand the market for the country they plan on entering.
References
Dyer, J., Godfrey, P., Jensen, R., & Bryce, D. (2016). Strategic management: Concepts and tools for creating real world strategy. Hoboken, New Jersey: John Wiley & Sons, Inc.
Groth, A. (2011). Best Buy’s overseas strategy is failing in Europe and China. Business Insider. Retrieved from http://www.businessinsider.com/best-buy-europe-201… to an external site.
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