Budgetmart, a U.S. discount retailing was established in the 1980s by John Victor near Norwalk, California: Transnational Management Case Study, UNM, Malaysia

Budgetmart, a U.S. discount retailing was established in the 1980s by John Victor near Norwalk, California. Budgetmart operates in more than 1,200 locations around the country. The firm has carefully developed its brand image, which focuses on offering goods at reasonable rates.

The company’s success can be attributed in part to its ability to offer stylish, branded products at discount pricing while also providing first-rate customer service. The firm’s motto illustrates its dedication to this: “Except More, Spend Less, Save Money”.

Dilemma

In 2010, Budgetmart decided to enter the Canadian market. During that, cross-border shopping is popular in Canada and most Canadian consumers knew American Budgetmart. Hence, this contributed to Budgetmart’s decision to enter that market. Budgetmart’s entry into the Canadian retail market was dreaded by many competing retailers. Budgetmart announced an uncharacteristically bold international expansion plan in hopes to take the Canadian market by storm.

However, the American retail behemoth announced its exit from the Canadian market in December 2013, three years after Budgetmart first entered the country, resulting in a $3 billion net loss and the loss of almost 10,000 jobs

The firm did not regard its Canadian location as a newcomer that needed to entice customers away from rival retailers but rather handled them the same as its operating stores in the U.S. The firm did not take into consideration unique geographical, and linguistic differences and government rules and regulations in Canada.

Answer

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