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Case Title:

Metro AG: The German Retailer's Internationalisation Strategies through 'Cash & Carry' Model

Publication Year : 2005

Authors: Dakshi Mohanty, T. Phani Madhav

Industry: Retail

Region: Europe USA

Case Code: GRS0104

Teaching Note: Available

Structured Assignment: Available


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Abstract:
Started as a wholesale store in 1964, Dusseldorf (Germany)-based Metro AG transformed itself into the largest retailer in Germany and the third largest in the world. Though the company generated the majority of its sales from its home market, retail sales in Germany began to show a decline during the early 21st century due to a high unemployment rate, the country's faltering economy, a rise in inflation and an increase in taxes. As a result, Metro ended up operating in a high-cost structure environment and living with low profit margin, which in turn had an adverse effect on the company's profits in Germany. To offset the declining sales in its domestic market, Metro pursued a strategy of expansion and internationalisation through its 'Cash & Carry' business model, and started focusing on emerging markets in Asia and Eastern Europe. Analysts opined that Metro's focus on international markets had been instrumental in driving its growth in the light of the slowed growth in its home country.

Pedagogical Objectives:

  • To highlight the international expansion strategies adopted by Metro through its 'Cash & Carry' business model to offset the declining sales in its domestic market
  • To highlight the initiatives taken by the company to strengthen its position in the emerging markets of Asia and Eastern Europe.

Keywords : Metro’s globalisation strategy; Growth Strategies Case Study; Declining sales in Germany; Expansion in Europe and Asia; Localised offerings; Expansion through ‘Cash & Carry’ model

Contents : 
Introduction
Metro – An Overview
Metro’s Expansion Strategies
Metro’s Financials
Metro’s Sales Divisions
Metro’s Prices in India
Global Locations of the Metro Group

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Case Study :
   INR 200 = USD ($)

Structured Assignment:
   INR 150 = USD ($)

Teaching Note :
   INR 400 = USD ($)
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