Retail Know-how Transferring Mechanisms From Absorptive Capacity

From 1992 the State Council approved six cities and five special economic zones to operate Chinese-foreign joint venture or cooperative business of commercial retail enterprises. The foreign retail corporations began the process of Chinese market slowly, as Wal-Mart 1996 and Carrefour 1995 and IKEA 1998 came to China for the first time. With the globalization of world economy, the General Supermarkets landed onto China and developed quickly. Especially as our country entered into WTO and ended the protection for national retailing. They tried their best to bring in the first-class management skills, in order to achieve good performance in the Chinese market. Because of adaptation, retail know-how can not be copied to China directly. The subsidiary corporation should absorb retail know-how slowly and melt into the new environment of the local retail market, for the long-term stable development, as the successful examples of Wal-Mart and Carrefour. So this paper try to discuss the transfer mechanisms of retail know-how in the view of absorptive capacity in order to give guidance to foreign capital retail enterprises to enter Chinese market and offer a theoretical basis for the local retail enterprises to face the intense market competition and trans-regional expansion plans.Wal-mart and Carrefour are all the retail giants; especially Wal-mart is the top of all the enterprises in the world. IKEA has developed quite smoothly in the occident market and also has a good mark in China. From retail formats, Wal-mart and Carrefour belong to General Merchandise Store, while IKEA belongs to Specialty Store. So we can analysis the difference of transfer mechanisms between the same retail formats (Wal-mart and Carrefour) and the different retail formats (Wal-mart and IKEA). On the basis of reading material, this paper chooses Wal-mart, Carrefour and IKEA as the main object of the study to prove the importance of absorptive capacity and build the transfer mechanisms of retail know-how.This article has six sections to explain the research topic. Section 1 provides the background and research value of this paper. And the research purpose and methods of this paper are also showed in this section. Section 2 generates the current research development about absorptive capacity and retail know-how. Section 3 builds the theoretical model of transfer of retail know-how in the view of absorptive capacity. Section 4 determines the process of case study and collects materials. Section 5 analyses Wal-mart, Carrefour and IKEA one by one and summarizes the results. Section 6 shows conclusions and suggestions of this paper, describe limitations or weaknesses of the study, give suggestions for future research.The main conclusion is showed as follows:(1) Retail know-how from the mother country to the host country contains four stages. Including beginning, implement, adjustment and integration stages. Subsidiary company recognizes and understands the initial retail know-how, and changes retail know-how with oneself different circumstance. At last, subsidiary company applies the skills to every new shop in the host country.(2) Subsidiary company's absorptive capacity is very important for the transfer of retail know-how. The stronger subsidiary company's absorptive capacity is, the performance of transfer is better.Recognition ability impacts on the beginning stage of the transfer of retail know-how.The stronger recognition ability is, the performance of transfer is better.Understanding ability impacts on the implement stage of the transfer of retail know-how.The stronger understanding ability is, the performance of transfer is better.Changing ability impacts on the adjustment stage of the transfer of retail know-how.The stronger changing ability is, the performance of transfer is better.Application ability impacts on the integration stage of the transfer of retail know-how.The stronger application ability is, the performance of transfer is better.