Eurobrands: Development Strategies and Managerial Issues in the European Food Industry

TABLE OF CONTENTS

Abbreviations

List of charts

List of tables

Introduction

1. Project
1.1. Project objectives
1.2. Methodology
1.3. Summary of contents
1.4. Key findings

Part I Characteristics of the European food market
2. European Consumers
2.1. General demographic aspects
2.2. Consumer differences
2.2.1. General overview
2.2.2. North South Divide
2.2.3. Regional differences
2.2.4. Quantitative factors
2.2.5. Qualitative drivers
2.2.6. Conclusion
3. European Food Industry
4. European Food Retailing
4.1. European activities of food retailers
4.1.1. Concentration
4.1.2. Internationalisation
4.2. The retailers' own labels
4.3. Consequences facing the European food manufacturers
5. Conclusion about the European food market

Part II Characteristics of European strategies and Eurobrands
6. Definitions
6.1. Brands
6.2. Eurobrands
6.3. Standardisation
6.4. Harmonisation
7. Drivers
7.1. Market
7.1.1. Stagnation of domestic demand
7.1.2. Common customer needs
7.1.3. European clients
7.2. Costs
7.3. Environment
7.3.1. Legal Environment
7.3.2. Economic Environment
7.3.3. Technical Environment
7.3.4. Marketing Environment
7.3.4.1. Communication Channels
7.3.4.2. Advertising Agencies
7.3.4.3. Market Research
7.4. Competition
7.4.1. Bargaining power of suppliers
7.4.2. Threat of new entrants
7.4.3. Threat of substitute products or services
7.4.4. Rivalry among existing competitors
7.5. Conclusion
8. Types of Eurostrategies
8.1. Multinational
8.2. Euro-Strategy
8.3. Mixed-Strategy
8.3.1. Introduction
8.3.2. Integrated Network
8.3.3. Lean Management
8.3.4. Degree of harmonisation
8.3.5. Harmonisation of products across Europe
8.3.6. Competitive moves
8.3.7. Further significance of the Mixed-Strategy
9. Types of Eurobrands
9.1. Standardised Eurobrands
9.2. Harmonised Eurobrands
10. Benefits and drawbacks of Eurobrands
10.1. Benefits of Eurobrands
10.1.1. Cost reduction
10.1.1.1. Economies of Scale
10.1.1.2. Capacity utilisation
10.1.1.3. Lower factor costs
10.1.1.4. Less distribution costs
10.1.1.5. Experience curve
10.1.2. Improved quality of products and processes
10.1.3. Faster launch of new products
10.1.4. Higher brand awareness
10.1.5. Extended staff motivation and identification
10.1.6. Improved human resource management
10.1.7. Enhancing bargaining power
10.1.8. Decline of the grey market
10.1.9. Continuity of supply
10.1.10 Increased competitive leverage
10.2. Drawbacks of Eurobrands
10.3. Problems in marketing Eurobrands
10.3.1. Diversity of languages
10.3.2. Still existing differences in government regulations
10.3.3. Lack of trade mark authority
11. Conclusion about Part II

Part III Strategic concept for the launch of Eurobrands in the food market
12. Harmonisation versus standardisation
13. Evaluation of food segments
13.1. Possible categories for food and beverage Eurobrands
13.2. Organic and healthy products
13.3. Own labels for retailers
14. Choice of countries
14.1. Stand-alone attractiveness
14.2. Connected attractiveness
14.2.1. European strategic leader
14.2.2. Contributors
14.2.3. Implementer
14.2.4. The black hole
15. European Organisation
15.1. Problems
15.2. Path of restructuring
15.3. Organisation
15.3.1. Organisation structure
15.3.1.1. Formal structure
15.3.1.2. Eurobrand Teams
15.3.1.3. European key-account management
15.3.2. Management Processes
15.3.2.1. Coordination of interdependent partners
15.3.2.2. Rules for the management process
15.3.2.3. Lead-Country-Concept
15.3.2.4. Information systems
15.3.3. Corporate culture
15.3.4. People
15.3.4.1. Recruiting and selection
15.3.4.2. Training and development
15.3.4.3. Career path management
16. Euromarketing
16.1. Positioning
16.2. Marketing Mix
16.2.1. Product
16.2.1.1. Quality
16.2.1.2. Innovation
16.2.1.3. Packaging
16.2.1.4. Brand name
16.2.2. Price
16.2.3. Communication
16.2.3.1. Advertising
16.2.3.2. European food fairs
16.2.4. Distribution
17. European distribution structure
17.1. Home-based sales staff
17.2. Export houses
17.3. Agents
17.4. Brokerage companies
17.5. Distributors
17.6. Licensing
17.7. Franchising
17.8. Joint ventures and joint marketing arrangements
17.9. Permanent Presence
17.9.1. Acquisition
17.9.2. Organic Growth
17.10. Combinations
18. Conclusion about the concept to launch Eurobrands

Part IV Conclusion
Conclusion

Appendix
I. The questionnaire
II. Results of the empirical research

Bibliography

Declaration of honour - Erklärung

Curriculum Vitae

ABBREBIATIONS

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LIST OF CHARTS

1. Framework of the thesis

2. Drivers towards Europeanisation

3. The five competitive forces that determine competition in industry

4. Three generics strategies

5. European strategies

6. Multinational organisation model

7. Global organisation model

8. Transnational organisation model

9. European brands

10. Chart of decision making whether to harmonise, standardise or nationalise

11. Determining product harmonisation

12. Generic roles of national organisations

13. Elements of a European organisation

14. Levels of leadership

15. Types of internationalisation

16. Path of decision making in asking how to develop harmonised Eurobrands

LIST OF TABLES

1. European population

2. Product penetration in Europe

3. Percentage of manufacturers who follow pan-European operations

4. The concentration of turn-over of the TOP 100 European food manufacturers

5. The geographic and operational structure of the TOP 100 European food suppliers

6. Degree of concentration in selected product categories

7. The TOP 25 European manufacturers

8. The TOP 25 European retailers

9. Degrees of turn-over concentration of the national TOP 10 retailers

10. International presence of Europe's TOP 10 retailers

11. Major European retail cross-border collaborations

12. Aims of cross-border collaborations

13. Evolution of own brands

14. Differences for labour costs across Europe

15. Differences within the global strategies of Nestlé and Coca-Cola

16. Pan-European brands

17. Price controls

18. Advertising controls

19. Different price structures between the UK and Germany

20. Logistics expenditure by country

To my parents

whom I thank for their love and support.

Introduction

Today's social and economic environment faces various problems, economic stagna tion, recession, new challenges due to free trade alliances or the opening of the former USSR as well as constantly changing fashions. Furthermore, European food producers are falling victim to the rising costs of R&D and labour, the shortening of product life cycles, the increasing buying power of European retailers who demand greater condi tions and super-bonuses and the ongoing diversity of European consumers. The inter national environment therefore requires manufacturers to reply in a very flexible and rapid manner, so that a company's ability to respond to consumer needs whilst partici pating in the global market is becoming the primary source of competitive success.

In the past, world-wide companies have gained competitive advantage either by run ning multinational approaches with a multitude of different products and decentralised organisations, or by exploiting global economies of scale through nearly total standardisation. The new winners are now the companies that are sensitive to market, environmental or technological trends and are able to exploit innovative ideas rapidly and efficient in a European or even world-wide manner. The right balance of customising and standardising opens the way to cost reduction, profitability and competitiveness. Thus this paper wants to discuss the use of harmonised Eurobrands as a modern way of thinking in European terms whilst fulfilling the needs of the great variety of European consumers.

The aim of the thesis is to describe Eurobrands as a meaningful and strategic weapon in today's challenging food market and to set up a concept for the launch of Euro brands in the food industry. Herein after, a Eurobrand means a harmonised product sold in three or more European countries with harmonised appearance, quality and a narrow price range in order to achieve competitive advantage over the traditional, mostly national products.

1. Project

1.1. Project objectives

The objectives specified for this paper are:

1. To answer the following questions:
- which food manufacturers should consider the launch of Eurobrands?
- what will they achieve?
- which are the major problems in managing Eurobrands?
- are there different types of Eurobrands?
- how can they be developed?

2. To cover major viewpoints such as:
- strategy
- organisation
- marketing
- human resources

Therefore, it is the aim of the thesis to describe Eurobrands as a meaningful and strategic weapon in today's challenging food market and to set up a concept for the launch of Eurobrands in the food industry.

Finally, as the branding of products concerns many operations within the manufacturers' organisation, the paper will not only discuss the marketing point of view but also raises further management subjects.

1.2. Methodology

The informations used in the paper are gathered from a wide variety of sources. These include:

- The interviews studied three exemplary food manufacturers, namely Coca-Cola, Mars and Nestlé. Additional interviews occurred with competitors as well as consultants.
- The questionnaire verified the main remarks through an empirical analysis of most major European food producers.
- The desk research exploited scientific and corporate publications as well as periodicals and newspapers.

The statements made in the thesis are mainly based on the three food producers analysed in the interviews. The paper concentrates on these global food manufacturers because their cross-border strategies seem to be the clearest and best developed. However, all kinds of companies, whether global, European or national ones, can realise pan-European product harmonisation. Moreover, with the exception of Coca Cola, the products of Mars and Nestlé which were examined are basically European products which might be globalised as well but with distinctive appearance.

1.3. Summary of contents

The thesis starts by indicating the characteristics of the European food market. The differences between European consumers sway all marketing decisions regarding product harmonisation, whilst the internationalisation and concentration of European retailers are changing the buying process. Moreover competitor's moves are leading to a restructuring of the market conditions and hence are pushing food producers to re think their European strategy.

To underline the need for and importance of Eurobrands, the paper continues by listing various drivers forcing companies likewise to discuss the way they operate across Europe and thus to consider pan-European product harmonisation. Different types of European strategies can be chosen for international operations. These strategies more or less support Eurobrands. According to the strategies, two types of Eurobrands can be presented: the standardised Eurobrand linked with the EuroStrategy and the harmonised Eurobrand responding to the so called Mixed-Strategy. The second part will finish by listing the various benefits resulting from Eurobrands as well as judging their drawbacks and problems.

In accordance with the literature and meetings with experts the thesis will pursue the hypothesis that individual harmonised products are in a better position to respond to the benefits of synergy effects as well as to the differences between European consumers. These products with different degrees of harmonisation still provide economies of scale but are also sensitive to the needs of the customers.

The third part of the thesis is the blueprint of a concept for the launch of Eurobrands in the European food industry. Using the first two parts as a theoretical basis, the pa per wants to conduct a step by step approach, showing all the important decisions which are necessary to create prosperous Eurobrands. Taking a company which has not yet internationalised its business or which is still running a multi-local approach, the concept discusses significant issues such as harmonisation versus standardisation, possible food segments, choice of countries, European organisation, Euromarketing and European distribution structure.

The chart beneath illustrates again the different steps the thesis aims to discuss.

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1.4. Key findings

The thesis brings up the following key findings:

- Every food manufacturer should think about pan-European products in order to gain competitive advantage. Moreover, every food manufacturer can launch Eurobrands; it just depends on his willingness to develop pan-European product strategies and organisations.
- Speaking of Eurobrands doesn't mean concentrating on pan-European product standardisation only, instead there is also the possibility of harmonisation by looking for similarities as well as customising on major local consumer needs. This second approach fits much better in the European food market.
- Whilst harmonised Eurobrands generally provide the most competitive advantages in the European food market, producers should maintain a product portfolio that includes, where financial performance and competitive moves permit, local and national brands as well as standardised Eurobrands.
- Due to pan-European product harmonisation producers enjoy substantial benefits, particularly from cost reduction in all steps of the value chain, improved quality of products and processes, faster launch of new products, higher brand awareness, enhanced bargaining power, a decline of the grey market, continuity of supply and a better competitive leverage in relation to the European competition.
- The major problems in creating Eurobrands do not lie in the ongoing variety of European consumer needs, innovative food manufacturers constantly show how it is possible to gain competitive advantage out of Eurobrands. Hence, the major problems are found in the companies themselves: such as insufficient Top Man agement support, self-interests of national units, over-centralised headquarters, weak communication between corporate units and the lack of pro-active, faithful, clear and sensitive strategies.
- Therefore, in order to develop prosperous harmonised Eurobrands, food producers have to turn to a Strategy of Harmonisation aiming to find the right mix and balance between the multinational and the standardised approach, in which interdependent European units are looking for similarities rather than for differences by using the specific knowledge and qualification of every unit under the lead of the most sophisticated and experienced one.

Part I Characteristics of the European food market

The distribution of food products in a market economy is based on the relationship between three parties: the manufacturer who produces the food products, the retailer who distributes and sells them and the consumer who buys and consumes them. The consumer is considered to be the main key to this process since he pays both the manufacturer and the retailer. Thus the manufacturer's duty is to meet the consumer's needs and demands, whilst the retailer must offer him a wide range of products from which the consumer can choose. The freedom of choice is fundamental to the functioning of the market economy.

Food has been called the world's most complex product1. It's complexity results from living raw materials which have to be transformed into healthy products which are convenient to use. It is not only manufacturers however, but also retailers who are re sponsible for the quality of food. The whole food chain has to work hand in hand to ensure food safety - from the production of raw materials to the consumer's table - be cause food materials are, as stated above, living biological matter and therefore sus ceptible to decay. The consumer himself is a part of the complexity facing the food in dustry. Food consumption differ according to local tradition and custom throughout Europe and food choice is often independent of nutritional considerations.

2. European Consumers

An inevitable requirement of successful marketing is a detailed knowledge of the needs, habits and types of behaviour of European consumers. This is vital, because it is the consumer who pays the manufacturer by purchasing its products.

2.1. General demographic aspects

With a total of nearly 360 million inhabitants, Western Europe is one of the most heav ily populated markets in the world and the home to some of the most affluent food con sumers. As the states of Eastern Europe also have 139 million inhabitants, this indicates a common European market of about 500 million consumers2. Furthermore, by looking only at the combined gross domestic product of all the European Community members, it is the second largest economic block in the world, second only to North America. For this reason, and because "half the world's trade is conducted in the European Community"3, Europe signifies an enormous marketplace for all businesses. The realisation of the European Single Market with free movement of goods means that pan-European operations increase companies' opportunities of gaining a larger share of the market than their competitors.

With further reference to the general demographic aspects, most European countries enjoy standards of living that are well above the global average, together with temperate climates, long life spans and low mortality rates. Today, the proportion of 15- to 24-year-olds is generally seen as falling by 24 per cent, whereas the number of 25- to 44-year-olds is forecast as increasing by six per cent and the number of 45- to 64-year-olds is expected to increase in Europe as well4. By the year 2025, it is estimated that one out of four Europeans will be 65 years of age or older5. Even if these older customers represent an enormous market for food companies, they cannot be seen as a main target group for Eurobrands. Older people are rather traditional and conservative in their eating habits, so that most of them will keep on buying the products they are used to.

Table 1: European population in million (1990)

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As seen in the table, there is a considerable variation in the population of the European countries. This has an impact on the importance of several individual markets within the European Community. Therefore, by doing business with only the five biggest European countries, companies still reach around 80 % of the European population.

2.2. Consumer differences

European food manufacturers face significant consumer differences across Europe. Each of these has to be considered when planning marketing strategies, including the development of Eurobrands.

2.2.1. General overview

European consumers are not completely alike, and despite the fact that they are all Europeans there are several differences in eating habits, tastes and in the buying of particular product groups. The literature even mentions that the diversity in consumer behaviours is "perhaps nowhere more evident than in the food sector where the range of lifestyles, attitudes and tastes present both an opportunity and a challenge to retailer and supplier alike"6. The following table illustrates the differences in eating requirements by listing some significant variances in product penetration7.

Table 2: Product penetration in Europe ( in percent / 1990)

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The table shows the following interesting facts:

- nearly every British customer has tea at home, nevertheless, he or she prefers instant coffee more than everybody else in Europe,
- because the British customer likes instant coffee there is only a small penetration of fresh coffee beans, in contrast to the Netherlands, where fresh coffee is very traditional,
- the French customer prefers the quality of butter to the taste of margarine,
- even through France is an important cheese producer, the French customer eats less cheese than everybody else in Europe⁸, and
- frozen pizzas have a good penetration into British and German households but are not very much liked in Italy.

With reference to frozen pizzas, it is interesting to see that Germany, together with the UK, has the most highly developed pizza market in Europe while the complete prepared meals (recipe dish) market in Germany is way behind its European equiv alents. On the other hand, France has a big recipe dish market, but is weak on its sale of pizzas9. The answer lies in the quality dimensions. The pizza market in Germany has profited from the investments of Dr. Oetker, Iglo, Wagner, Peppino and Freiberger by making their products very good value for money and by producing a higher standard of quality. Freiberger in particular has improved the quality of different retailers' own labels. "While in days gone by, the German market was famous for the cheap pizzas, DM 1,50 or less for 300g, the market growth in later years has been fu elled by the quality segment."¹⁰As far as frozen pizzas are concerned, their sales as well as the sales of frozen food in general "are good barometers of the development of value-added propositions in a given market"¹¹. This is due to the fact that frozen food can only be bought by households which possess fridges and freezers as well as having the habits of once-a-week shopping.

2.2.2. North South Divide

There are obviously demographic, quantitative differences within the European countries and especially between the North and the South of Europe, which partially effects market-differentiation¹².

One of these differences is the average size of the household. On average, 2,55 persons live in one household in the north of Europe and 3,21 persons in one household in the South¹³. This means that in the southern European countries the average household is currently 26 per cent larger than its northern counterparts. This fact is important be cause it is "driving a lot of the food values of people eating in family groups"¹⁴. Addi tional, the average size of households is shrinking, so that one person households are on the increase and those with more than three occupants are decreasing: this is attributable to young adults leaving home earlier, a sharp decline in the marriage rate, more older people, more women working and rises in the divorce rate¹⁵.

Regarding food as a percentage of total consumer expenditure in the European coun tries, it again shows a marked difference. In Countries like Greece and Portugal the share of consumer expenditure for food exceeds the European average of 40 percent compared to only 16 percent in Germany, 18 percent in the Netherlands and 19 percent

in Belgium and France¹⁶. This might be explained by the fact that income tends to be lower in the southern countries and that food therefore tends to rise as a percentage of total expenditure¹⁷. But even in Italy, where average salaries are higher, certainly in the northern part of the country, the expenditure on food is still at a much higher level than it is in Northern Europe. This reflects the cultural value placed on food as well as merely the economics that are driven by the salaries.

Further differences between the North and the South of Europe appear on looking at the population density of the European countries¹⁸. This is important from a distribution point of view, because countries with higher population densities can be served more easily by less retailers, whereby distribution costs can be reduced. Adding this to the ownership of certain key durables, such as freezers and microwaves, the northern European countries do not only have higher population densities, but also a higher penetration of consumer durables¹⁹. Therefore high ownership of items like freezers obviously produces a completely different trade structure in these countries, such as a tendency to once a week shopping and an increase in the buying of prepared meals for microwaves. Coca-Cola even added a further indicator for the divide between North and South Europe by mentioning that northern countries are much more concerned about the environment and ecological problems and hence more open to buy green and healthy products²⁰.

2.2.3. Regional differences

Consumer differences do not only exist between the European countries, but also ap pear in regional terms. A possible explanation is that "regional identity is deeply attractive to consumers as a reaction against the internationalism promoted in the media"²¹.

As an example, regional differences are very important in Spain, so there are many dif ferences between a Basque and an Andalusian²². Cooking styles vary from mostly fried food in Andalusia, to Castille food which is mostly roasted, and in the North more elaborate. Rice dishes come from the Valencia region in Eastern Spain and Catalonia prefers simpler, grilled food and salads. Even many of the dishes known outside Spain, like paella, tapas or sangria are regional. The only point common to all Spaniards is that they like fish²³. Accordingly, national products and brands behave differently de pending on the region, a fact which will be valuable for Eurobrands as well. One prod uct may be leader in the North and only number three in the South, a situation which is difficult to change, because the Spanish consumer is rather traditional and conservative in his eating habits. Only the inhabitants of some larger towns, such as Madrid, Barce lona, Valencia and Bilbao, who are influenced by foreigners, particularly tourists, are more open to new ideas and products.

2.2.4. Quantitative factors

Two main quantitative factors have influenced changes in the consumer environment as regards food retailing and manufacturing: an increase in disposable income and an increase in the number of working women.

Increased disposable income

Increased disposable income has allowed more people to travel²⁴and to spend more money on products of a higher quality, but at the same time it has meant that more and more people are dining out in restaurants. Through travelling consumers have discovered different eating habits in other European countries, with the result that the interest in foreign foods in their home countries has increased.

Foreign foods are especially on the increase in the Northern countries²⁵. This is based on a growing desire in these countries to try something new, to experiment and to see what the Southern European countries are doing in the food area; largely because they tend to have a much stronger reputation for food excellence than the northern Euro pean countries do. The interest in foreign foods is lower in Southern European coun tries because the attraction of the home-based cuisine is more fundamental than it is in the North. Here again there is an indication of the North South divide in Europe.

It is important to see that a rising trend in foreign foods indicates an expanding market for foreign food manufacturers. If more people are becoming more interested in foreign dishes it will be easier for foreign companies to sell their products.

Working women in Europe

The number of working women has grown steadily in the last few years. In some countries it has risen by as much as 60 % in the last decade²⁶. Scandinavia clearly has the highest rates, but at least 50 per cent of women of working age are employed in half of the countries, particularly in the northern countries of Europe.

This has two implications:

- the level of once-weekly shopping has increased²⁷and
- there is now a greater penetration of convenience meals (chilled and frozen foods) and of ready-to-eat meals²⁸because they are faster and easier to prepare.

2.2.5. Qualitative drivers

Nielsen states that two main qualitative factors have had the most influence on changes in grocery retailing: changing lifestyles and a greater concern with health and the envi ronment²⁹.

Changes in lifestyles

The prosperity of the last few years has increased the consumer's ability to spend more money on travel and has resulted in "the luxury of turning the choice of food and drink into an intellectual and emotional exercise"³⁰, which is also a consequence of improved and higher levels of education, and better information provision for consumers. Thus, in recent years, consumers have been increasingly willing to pay premium prices for brands which match their desired lifestyle and respond to their desire for excellence and individualism. However, the current recession has shown an impact on the markets for premium brands in some of the European countries, and therefore it is not clear whether the fundamental trend will continue or not. These days, consumers are again tending to base their buying decisions more and more on price.

The growing demand for a better choice of food and beverages has affected larger product ranges in grocery stores. Hence large surface stores now generally stock 20.000 to 40.000 items³¹. This fact one again indicates the growing market for foreign foods as well as for Eurobrands.

Environmental and health concerns

Air pollution, the atomic crises of Tschernobyl and other environmental problems have resulted in a greater concern for the environment in the population, which has also brought about political changes, such as the growing importance of ecological political parties. The impact upon food retailing can be seen in terms of consumer demand and greater market segmentation. Along with this there is the increasing value placed on naturalness in foods, so that in "Europe there is a clear trend as natural foods are per ceived as something which are better for the family"³². This trend is not a passing fad³³. In such matters, the tendency is towards fresh food, natural ingredients, low and light products (low in calories, salt and fat), dietary products (sugar free, high figer) and chilled products³⁴. The market has also seen a growth in sales of fruit, vegetables, muesli and cereals, whilst sales of butter, dairy products and sugar have decreased.

2.2.6. Conclusion

Because of ongoing consumer differences between the Northern and Southern Euro pean countries, regional differences and qualitative differences in lifestyles, the Euro- pean food and drink industry does not have a "European Consumer"³⁵. In this connec tion, the North South divide is called "the main influence on consumer attitudes"³⁶, but other influences may be age, education, income or the fact of living in a city or in the country.

However, even if there is no European Consumer, customer habits and attributes are partly converging across Europe, because there are certain "pressures that are homog enising consumer tastes"³⁷. These pressures and driving forces will be presented in part II.

3. European Food Industry

"Europe's food industry is highly fragmented and currently over 75 per cent of processed food output is consumed within its country of manufacture. Only some four or five European food manufacturers have Pan-European operations while the majority of the others serve one or two national markets only."³⁸

The European food and drink manufacturers represent, with 2,2 million employees in 1988 and a total turnover of 910 billion ECU in 1992, the most important industrial sector in the European Community³⁹. The percentage shares of the total EC-output are: 20,4 % from French manufacturers, 19,6 % from Germany, 18,9 % from the UK whilst only 9,7 % is produced by Spanish manufactures⁴⁰. The countries in which the largest share of food is produced have at the same time the highest demand. They are also the markets with the highest export rates.

In the 1988, the European food and drink industry exported products worth about 3,1 billion ECU, which represented only one per cent of the total European food turn over, and it is characteristic that only a small percentage of these exports are distrib uted over long distances. The reasons for this lie in distribution costs, short shelf-life, different consumer habits, regulations and trade barriers⁴¹. This is why only a few manufacturers run pan-European operations, as can be seen in the chart beneath⁴².

Table 3: Percentage of manufacturers who follow Pan-European operations (1989)

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This figure shows clearly that food companies' business strategy has been focussed on dominating national markets. Whilst the last page mentioned five companies operating on a pan-European scale, the commission declares that the ten leading food manufacturers in particular are launching their products in the five biggest European markets⁴³. Most of the manufacturers which are not following pan-European opera tions have generally remained small to medium-sized companies on an European scale whilst being very often huge competitors in a specific nation. This trend is dangerous for the smaller producers because "within their national boundaries their retailer customers have coalesced into larger and more dominant groups wielding purchasing power sufficient to demand and receive high discounts and additional services in the distribution, merchandising and advertising of the products"⁴⁴. In addition, due to the growing European concentration of the TOP food suppliers as well as the introduction of the European Common Market national producers are facing a tougher competition than ever.

TOP European food manufacturers

In 1992, the West-European food industry realised a total market volume of over 910 billion DM, of which the 100 TOP food suppliers hold a share of 45 percent⁴⁵. The other 55 percent is shared by over 18.000 producers. Compared to 1988 the total market volume increased by about 9 percent whilst the 100 TOP companies did not expand their market share significantly. In 1988, the detailed structure of the leading food producers has been as shown in the table below⁴⁶.

Table 4: The concentration of turn-over of the TOP 100 European food manufacturers (1988)

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Whilst in 1988 the TOP 25 of the European food manufacturers realised nearly 24 per

cent of the total West European food turnover, in 1992 they increased their market

share to 28 percent⁴⁷. This means that the leading 25 food suppliers are realising a higher sales volume than any national European market offers⁴⁸.

Classifying the 100 TOP European food manufacturers by their country of origin it is clear that the UK is in a strong position. 31 of the 100 TOP manufacturers are from the UK, and together with their foreign production facilities they hold a market-share of over 14 per cent. Germany, the largest European food market, holds a market-share of about three percent with its ten most prominent manufacturers.

Table 5: The geographic and operational structure of the TOP 100 European food suppliers (1988)

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The last table also shows a so-called factor of size. Even if the German TOP manufac turers are approximately 1,8 times larger than their competitors in Belgium (factor 1), the companies from Switzerland, USA and the Netherlands are on average twice as big as the prominent German manufacturers. This is one of the arguments which is used in the literature for proving that the German food manufacturers have a significant weakness in relation to their European competitors⁴⁹. Further symptoms are low profitability, low productivity and insufficient internationalisation. Table 5 also demonstrates how much huge European food producers are involved in the European market by presenting the percentage of European food turn-over compared to their total food turn-over. The table indicates that the TOP Swiss food manufac turers are selling 42,6 per cent of their products in non-European countries. This means that, in order to reach such levels, they must possess successful global strategies. Looking only at the TOP 25 European food manufacturers we see that they are even more involved in global oprations because their non-European operations account for 39,3 per cent of their total global turn-over⁵⁰.

The high food industry concentration shown in the last table, such as in the UK, has been proved again in 1990 by the Corporate Intelligence Group⁵¹. The group named the markets in Denmark, France and the UK as comparatively concentrated, Belgium, Germany, Greece, Ireland and the Netherlands as becoming concentrated whilst the group described the national markets of Italy, Portugal and Spain as still fragmented.

If the 20 main product categories are surveyed, the leading 10 producers of each category realise an average European market share of 40 percent⁵². But this concentration has significant deviations, as seen in the next table⁵³.

Table 6: Degree of concentration in selected product categories (1990)

Abbildung in dieser Leseprobe nicht enthalten

Furthermore, the TOP 10 European producers of spirits and liquors have a market share of over 60 percent due to the strong presence of companies like Grand Met or Seagram. The same high market concentration can be found in the detergent market with leaders such as Unilever, Procter & Gamble and Henkel. In contrast, the TOP 10 producers of milk and diary products achieve the tiny market share of 8 percent, and this percentage belongs mostly to Nestlé and Gervais Danone. Comparing these figures with individual national markets, in some countries the market shares are higher than the European average⁵⁴. This proves once again that most food suppliers are concentrating on national markets as well as that there is a huge potential for consolidation and concentration across Europe.

The question now rises why the 100 TOP food suppliers have achieved the huge mar ket share of 45 percent. As the German GWH points out the profitability of the leading 100 companies increases with their growing turnover⁵⁵. The TOP 25 firms gained three times as much as the companies placed in positions 76 to 100 with a net return of their sales of 6,5 percent. Thus, profits are positively influenced by internationalisation. Those producers who have focussed on a large-scale market penetration in Europe therefore obtain an average return of as much as 8 percent which is significantly higher than that of nationally focused firms. The superior performance of leading companies further affects their general financial standing, which has a significant strategic and competitive importance. In this connection, the cash flow of the TOP 25 exceeds the turnover of the companies ranked between positions 76 and 100 of the 100 TOP European food manufacturers. These smaller companies are mostly the national market leaders. Thus, the cash flow of the European food leaders is sufficient to acquire their leading national competitors. As an example, in 1991 Nestlé realised a turn-over of over 50 billion Sfr which led to a return on equity (ROE) of 16,8 percent⁵⁶. The cash-flow of over 4 billion Sfr is sufficient to acquire companies such as Effems / Mars (Europe) which compete with Nestlé not only in the pet food market. In addition, Coca-Cola International realised a cash-flow of over $ 2,2 billion and a free cash flow of over $ 870 million in 1992⁵⁷.

The following companies belong to the European TOP 15 food and beverage manufacturers:

Table 7: The TOP 15 European food and beverage manufacturers in 1991

Abbildung in dieser Leseprobe nicht enthalten

Unilever and Nestlé are not just the two most important food manufacturers in Europe, they are at the same time the two biggest global producers, whereas UScompanies held the following eight positions in the world⁵⁸.

4. European Food Retailing

4.1. European activities of food retailers

Retailers are called the barometer of demand, as they provide the shopping location for end consumers⁵⁹. They play a significant role in the food and beverage industry, especially in terms of customer research, advertising and sales promotion. They are in direct contact with the consumers, which means that they are the first to feel how shoppers react to price, advertising, positioning, placement and to product innovations. In addition, they are able to respond quickly to new needs⁶⁰. Retailers also have a crucial impact on the producer's performance, not just directly by listing or not listing its product, but also because they can decide how far to promote a particular brand or even compete by providing their own brands.

The behaviour of manufacturers and retailers is different in that they do not have ex actly the same interests⁶¹. Typical conflicts between manufacturers and retailers lie for instance in product-oriented objectives where manufacturers prefer a higher degree of product differentiation and innovation whilst the trade side favours a lower degree of product differentiation and a moderate rate of innovations. Regarding distribution-oriented objectives, producers want a presence for their assortments and a favourable placing of their brands, while retailers favour the presence of selected brands by optimising the placing of the entire assortment. With reference to communication-oriented objectives, manufacturers aim to increase brand loyalty by offering a convinced product experience whilst traders attempt to increase dealer loyalty by creating a positive purchasing experience. Finally, there are also differences concerning price-oriented objectives. Manufacturers desire retail price maintenance, individual brand-related prices and supra-regionally uniform, continual pricing, but retailers demand autonomous pricing and regionally adapted pricing ac cording to local market conditions.

Table 8: The TOP 25 European retailers in 1992

Abbildung in dieser Leseprobe nicht enthalten

The last table presented the major European food retailers. Nielsen published partly divergent results. The company mentioned Edeka as the biggest European retailer with a share of 2,4 percent of the European market⁶². Following Edeka, the ranking consist of Rewe (2,3 percent), Aldi (2,3), Spar (2,2) and Carrefour (2,2). However, both lists demonstrate that the TOP 25 European retailers are participating strongly in the changes taking place in the European marketplace. The two most significant movements being made by European retailers are their growing concentration and internationalisation.

4.1.1. Concentration

During the last two decades the European food retailing has seen a clear trend towards increased concentration and it is expected that the drastic consolidation of retailers will continue over the next five years⁶³. Nowhere has this been more evident than in the acquisition by Europe's greatest retailer, Metro, of the German Asko chain in 1993. This strong drift is reflected by two measures: outlet numbers and retailers business shares.

The first indicator of the degree of concentration is the reduction in the total number of grocery trade outlets in Europe, which has been around 50 percent in the last 15 years⁶⁴.

The trend towards increasing concentration in European retailing can also been seen with reference to the shares of total food turnover at national level of the ten largest retail chains, as shown in the table below.

Table 9: Degrees of turn-over concentration of the national TOP 10 retailers in 1991

Abbildung in dieser Leseprobe nicht enthalten

Table 9 above indicates the immense power of the leading European retailers. Because of the high degree of concentration, only a small number of central buying departments decide about the listing of manufacturers' products. By taking only the combined share of the TOP three retailers per country for 1991, it is clear that in some countries the majority of trade even depends on less than five companies⁶⁵. The concentration and growth of chain stores of all types is expected to force smaller independent traders in particular out of business⁶⁶.

Looking at the combined European level, the huge influence of concentrated retailers is clearly visible. In 1992, with a total turnover of over 230.000 million ECU, the TOP 25 food retailers held a share of 43 percent of the total turnover achieved by European food retailers. Taking the TOP 50 food retailers, their market share of the total food market is about 59 percent⁶⁷, only 16 percent more than the share of the first 25 companies. This proves that the TOP 25 retailers have the most significant impact on the food market and consequently also on bargaining with European food manufacturers.

4.1.2. Internationalisation

Prominent multinational food manufacturers have already started to harmonise their European marketing strategies through rationalisation of production plants and an in ternationalisation of their product range, and in response to this the retailers are preparing to expand their own network in order to get better buying conditions⁶⁸. This has meant that the recent growth of large scale retailing has been significant in many parts of the world, particularly in Western Europe, North America and Japan⁶⁹.

The internationalisation of European food retailing can be seen in several factors: the growth of European retail chains and the establishment of cross-border collaborations and alliances. The factors forcing retailers to become international can be distin guished into push and pull factors⁷⁰. Pull factors are those which make foreign markets highly attractive, whilst push factors turn a company's home market unattractive. As far as the European food retail business is concerned, home countries are losing attractiveness due to growing competition, stagnating food spending and legal restrictions such as shopping hours, all of which are pushing retailers towards internationalisation. The pull towards internationalisation comes from partly converting consumer shopping behaviour, fragmented and underdeveloped markets, international suppliers and underexploited niches such as store concepts like discount chains or product ranges including foreign products.

Internationalisation has particularly affected retailers involved in non-food areas such as clothes, furniture or toys. Only 13 percent of the more than 1300 cross-border in vestments counted by the Corporate Intelligence Group for the Coca-Cola Retailing Research Group Europe, by autumn 1992, implicated food⁷¹. Most moves were di rected to Southern Europe, especially to Spain, with the largest contribution coming from France. In this connection, French, British and German retailers are currently ac counting for over 70 percent of European cross-border operations, mostly because they have found their home markets highly competitive and saturated whilst Southern Europe is attractive because of its higher margins. Following Spain, Italy is now receiving similar attention, with Tengelmann, Metro, Carrefour and others making substantial commitments to invest in Italy⁷².

Food retailers who are already involved in foreign activities, are using the following strategies⁷³:

- organic growth
- investments,
- cross-border collaborations and alliances.

Table 10: International presence of Europe´s TOP 10 retailers

Abbildung in dieser Leseprobe nicht enthalten

As seen above, all the TOP 10 European retailers have an international presence. Ac cordingly, the Corporate Intelligence Group calculates that European food retailers are internationalising through organic growth with 26 percent, 20 percent by acquiring, 18 percent by franchising, 13 percent by building joint ventures and only 10 percent by forming alliances⁷⁴. Conversely, for non-food retailers, franchising and concessions were far more important.

Organic growth

Organic growth represents the strategy in which a company builds up foreign facilities from scratch without acquiring or participating in existing units. An excellent example of the exportation of the own distribution concept is Aldi, the German discount chain, which has opened stores in most European countries. In 1993, the reported number of Aldi stores has been: Germany (2.350), the Netherlands (265), USA (225) Belgium (220), Denmark (122), France (48), UK (21) and 180 stores in Austria which have been the only stores acquired by Aldi⁷⁵. This list excludes Italy, where Aldi operates as well.

Further examples of this strategy are:⁷⁶

- Metro in: D, DK F, I, A, Turkey
- Carrefour in: CH, E, F, USA, Brazil, Argentina, Taiwan
- Auchan in: E, F, I, USA
- Marks & Spencer in: B, E, F, P, IR, DK, UK, Hong-Kong⁷⁷
- Promodes in: D, E, F, I, P

The main reasons for organic growth are:⁷⁸

- a chance to optimise everything from the outset and
- a high level of managerial and financial control over market entry, operations and strategy.

However, several surviving differences in national laws restrict the opportunities for pan-European retailing⁷⁹. For example, the diverse regulations concerning the size of retail outlets reduce the ability to export domestic know-how and experience. Exam ples of these legislations are the French Loi Royer, the Italian Law 426 and the Pad lock Laws from Belgium. The aim of these laws has been to restrict the growth oppor tunities for international retailers trying to establish pan-European operations.

Additional problems of organic growth are:⁸⁰

- it can take a long time to build up customer knowledge and loyalty,
- problems in understanding the local retail and consumer environment,
- high costs and risks,
- the absence of existing in-company expertise in operating in a foreign market can be problematic and expensive to resolve.

Investments

Between 1945 and 1990 European food retailers made around 250 operational invest ments outside their own countries⁸¹. More than 80 per cent of these investments were

made by retailers from France, Germany and the UK, with Belgian and Dutch companies also active. The biggest supermarket in Spain today is run by the French-owned Carrefour Group. Two other French retailers who are also involved in the Spanish market are:⁸²Promodes with Scandisa and Auchan with Alcampo. Delhaize Le Lion, the Belgian retailer only realizes 25 per cent of its turn-over in its home country. Further, in 1991 Delhaize bought existing stores owned by the Czech state to create the food chain Delvita, and in 1992 the company acquired a 51 percent stake in the Athens-based supermarket chain Alpha-Beta Vassilopoulos⁸³.

The major reasons for this investment strategy are:⁸⁴

- home market growth opportunities will not be sufficient,
- diversification of financial and political risks.
- acquisition where it would be too expensive to build up one's own facility, and
- obtaining knowledge about the new market.

Cross-border collaborations

European retailers have also built up buying groups and corporations with other re tailers, in which, as pointed out in table 8, many of Europe's TOP 25 grocery retailers have already become involved with one of the later shown corporations. In this con nection, a cooperation means that "independent retailers transfer, to a certain extent, functions over to the groups' central bodies"⁸⁵, from which they "are able to carry out these externalized functions more efficiently than a single member company"⁸⁶, espe cially concerning potential economies of scale in marketing and bargaining power⁸⁷.

[...]

---

¹see NESTLE: Scientific Research and Technological Development, Vevey, Switzerland, 1990a, p. 6

²see STAHR G., ZIEGELMAYER W.: Chancen grösserer Märkte, in: CMA (Edited): CMA Betroffenheitsanalyse EG-Binnenmarkt 1992, Bonn, Germany, 1991, p. 55-67, p. 57; the European part of the USSR would increase the volume of European consumers by about 206 million to a total of about 700 million customers

³DUDLEY J.W.: 1992 - Strategies for the Single Market, London, UK, 2. Edt., 1990, p. 26

⁴see DAWSON M.: Lifestyles - Variety in Europe, in: EuroFood, No. 1, 1991, p. 17-22, p. 17 18; the German Infas institute confirmed the trend toward population obtaining more older people than younger in 1993; see TRÖSTER R., BRILMAYER T.: Europa hat zwei Gesichter, in: Lebensmittel-Zeitung, 4.6.1993, p. 85

⁵see NIELSEN: European Passport, Lucerne, 1990, p. 24

⁶DIGBY M.: EC retailers and non-EC suppliers: The impact on trading relationships post 1992, in: The Coca Cola Retailing Research Group (Edited), London, UK, Sept. 1992, p. 3

⁷see GALLUP INTERNATIONAL, in: Reader's Digest, March 1991, after: AHOLD Market Research, Findings IX, April 1991; the survey was carried out in 17 Western European countries, including all the EC member states, where a total of 22.360 respondents were questioned; one of the questions measured the penetration of a number of food products, expressed in percentages 'normally in house'

⁸cheese is a further an example of food whose usage varies greatly across cultures; in France it is eaten after dinner, before dessert, in Holland it is consumed with breakfast, while the English tend to eat it at lunchtime; see HOECKLIN L.A.: Managing cultural differences for competitive advantage, a paper conducted for the Economist Intelligence Unit, London, UK, 1993, p. 57

⁹see NILSON T.: Viewpoint, in: European frozen food buyer, March / April 1991, p. 31

¹⁰see NILSON T., p. 31

¹¹GROVER J.: Securing profitable growth - The realities of the marketplace, in: FINANCIAL TIMES (Edited): The food & drink industry in Europe, London, 12/13.3.1991, p. 10.1-6, p. 10.1

¹²see TIETZ B.: Euro-Marketing - Unternehmensstrategien für den Binnenmarkt, Landsberg/Lech, Germany, 1990, p. 244; in the questionnaire, out of 11 companies 7 pointed out that they consider the North South Divide in Europe as a significant marketing barrier; see Appendix 7 (General questions)

¹³see HEARN D.: The European north / south divide assessed, in: FINANCIAL TIMES (Edited): The food & drink industry in Europe, London, 12/13.3.1991, p. 4.1-8, p. 4.3

¹⁴Ibid

¹⁵see ANDERSEN CONSULTING: Grocery Distribution in the 1990s - Strategies for Fast Flow Replenishment, a research study for The Coca-Cola Retailing Research Group Europe, London, UK, June 1992, p. 17

¹⁶see BUTLER K.: Euro-consumer is not yet a reality, in: European Retail, No. 72, March 1993, p. 10; LEBENSMITTELZEITUNG, EURO-FOOD: Der Lebensmittelhandel in Europa Strukturen, Unternehmen und Entwicklungen, Frankfurt a.M., Germany, 1990, p. 8, consumers from the North of Europe have to spend about 20 percent of their total consumer expenditure on food, their counterparts in the South of Europe use a percentage of about 26 percent; see Ibid

¹⁷see HEARN D., p. 4.3

¹⁸see Ibid, p. 4.4

¹⁹see NIELSEN (1990), p. 41; as an example, in 1990, Germany had a penetration of fridges in German households of 99 percent whilst Portugal only had 74 percent; in terms of microwaves the UK showed 35 percent and Spain only 2 percent; 80 percent of the households in Norway had a freezer whilst in Spain only 18 percent; the meaning of these figures have been confirmed in 1993 through a research done by Eurostat, the European Community's statistical analysis unit; see BUTLER K., p. 10

²⁰this statement is taken from the interview with Mr. John C. Moynihan, Coca-Cola's director of home market customer service Europe

²¹NIELSEN (1990), p. 48

²²see ARMADA A.B.: Why is Spain attracting so many food companies?, in: FINANCIAL TIMES (Edited): The food & drink industry in Europe, London, 12/13.3.1991, p. 5.1-5, p. 5.1; further examples of regional consumer differences can be seen in almost every European country; but especially in those European regions, like Northern Ireland, Wales, Catalonia, the southern part of Tirol, the Flemish region of Belgium and the Basque region, which are striving for independence; see further TRÖSTER R., BRILMAYER T., p. 85

²³Spain ranks second in the global annual per capital consumption of fish and shellfish, behind Japan; see ARMADA A.B, p. 5.3

²⁴by 1989, more than 69 % of EC citizens had visited at least one other EC country; see QUELCH J.A., BUZZELL R.D., SALAMA E.R.: The Marketing Challenge of Europe 1992, Reading, USA, 1991, p. 85

²⁵see HEARN D., p. 4.3

²⁶NIELSEN (1990), p. 43

²⁷see SCHILLER Z.: Marketing globally - thinking locally, in: Business Week, 13.5.1991, p. 20 24, p. 23; consumers are going to buy their groceries more and more in large supermarkets once a week and snap up discounts

²⁸see NIELSEN (1990), p. 43

²⁹see Ibid, p. 44

³⁰JACKAMAN M.C.: The outlook for the food and drink industry in the 1990s, in: FINANCIAL TIMES (Edited): The food & drink industry in Europe, London, 12/13.3.1991, p. 1.1-5, p. 1.2

³¹see NIELSEN (1990), p. 45

³²HEARN D., p. 4.2

³³see JACKAMAN M.C., p. 1.2

³⁴see NIELSEN (1990), p. 45

³⁵see HILDEBRANDT L.: Perspektiven einer europäischen Markenpolitik, in: TROMMSDORF V. (Edited): Handelsforschung 1992/93 - Handel im integrierten Europa, Berlin, Germany, 1992, p. 195-210, p. 201; BUTLER K., p. 10; DISSELKAMP H.D.: Nothing else than pressure on purchasing prices ?, speech at the European Distribution Press Group Conference "Retail Trends 2001", Monte Carlo, 7-9.10.1992, p. 5

³⁶JONQUIERES G.de: Euroshoppers prove an elusive, in: Financial Times, 19.9.1991

³⁷SCHILLER Z., p. 23

³⁸GRAY D., NATHAN H.: Grocery Retailing and 1992, in: The Coca Cola Retailing Research Group Europe (Edited), London, UK, March 1990, p. 14; see further MACNEARY T., SHRIVER D.: Food Retailing Alliances: Strategic Implications, in: The Coca Cola Retailing Research Group Europe (Edited), London, UK, January 1990, p. 6; Vossen believes that only seven per cent of national food products are exported to other European countries; see VOSSEN M.: Das neue Konsumland ist schon da, in: food+nonfood, No. 1, 1988, p. 7-16, p. 10

³⁹see KOMMISSION DER EUROPÄISCHEN GEMEINSCHAFT: Panorama der EG-Industrie 1990, Brussel, Luxemburg, 1989, p. 15.1; LADEMANN R.P.: Europa gibt dem Handel Impulse, in: Lebensmittel-Zeitung, 30.4.1993, p. 87-88, p. 87

⁴⁰see KOMMISSION DER EUROPÄISCHEN GEMEINSCHAFT, p. 15.8

⁴¹see KOMMISSION DER EUROPÄISCHEN GEMEINSCHAFT, p. 15.8

⁴²this chart produced by the Commission of European Communities is taken out of McCREA N.: Profitable trade marketing strategies for Europe, London, UK, p. 8; the same results have been realised in a study of the AMS Marketing Service AG Zug; they asked over 35.000 manufacturers who make up 80 percent of the total turn-over of the retail partners of AMS; the figures from this chart have also been confirmed by Nielsen Lucerne as well

⁴³see KOMMISSION DER EUROPÄISCHEN GEMEINSCHAFT, p. 15.8

⁴⁴GRAY D., NATHAN H., p. 14

⁴⁵see LADEMANN R.P. (1993), p. 87

⁴⁶see LADEMANN R.P.: Auswirkungen auf die Ernährungsindustrie durch Wettbewerbsver änderungen, in: CMA (Edited): CMA-Betroffenheitsanalyse EG-Binnenmarkt 1992, Bonn, Germany, 1991, p. 43-54, p. 45

⁴⁷see LADEMANN R.P. (1993), p. 87

⁴⁸see Ibid

⁴⁹see BAUERNFEIND J.: Die deutsche Nahrungs- und Genußmittelindustrie - Stark genug für den kommenden Wettbewerb, in: BERGER R. (Edited): Handbuch Europa'92 - Strategien für unternehmerische Erfolge im Gemeinsamen Markt, Düsseldorf, Germany, 1990, p. 195-211, p. 195

⁵⁰see LADEMANN R.P. (1991), p. 48

⁵¹see THE CORPORATE INTELLIGENCE GROUP: Food distribution in Europe in the 1990s, London, UK, 1990, p. 67

⁵²see LADEMANN R.P. (1993), p. 87

⁵³ see THE CORPORATE INTELLIGENCE GROUP, p. 73

⁵⁴see LADEMANN R.P. (1993), p. 87

⁵⁵see Ibid; GWH stands for "Gesellschaft für Wettbewerbsforschung und Handelsentwicklung" a agency which is analysing the competition and the development of retailing

⁵⁶see NESTLE: Annual report 1991, Vevey, Switzerland, 1991, p. 58

⁵⁷ see COCA-COLA: Annual Report 1992, Atlanta, Georgia, USA, 1993, p. 44

⁵⁸ see CECCHINI P.: Europa '92, Baden-Baden, Germany, 1988, p. 85

⁵⁹see DISSELKAMP H.D. (1992), p. 7

⁶⁰see KOMMISSION DER EUROPÄISCHEN GEMEINSCHAFT, p. 15.7

⁶¹see BLÜMLE E.B., BANNIER R.G.: Handelsmarketing - Herstellermarketing: Unterschiede und Gemeinsamkeiten, in: Jahrbuch der Absatz- und Verbrauchsforschung, Berlin, Germany, 1975, p. 166-175, p. 169-174; DISSELKAMP H.D. (1992), p. 12; BENDALL A.: How crossing borders affects retailer / supplier relationships, speech at The Economist Conferences: Retailing in Europe, London, UK, 30.6.1993, p. 9

⁶² see NIELSEN: Europa - Retail Trends 1993, Northbrook, USA, 1993, p. 3.3; the retailers are ranked based on FMCG turnover limited to 16 Nielsen countries in Europe

⁶³ see ANDERSEN CONSULTING, p. 21

⁶⁴ see AIM: The concentration of trade in Europe, a position paper of AIM (Association Européene des industries de produits de marque), Brussels, Belgium, Feb. 1992, p. 2

⁶⁵see NIELSEN (1993), p. 3.4; in such matters the combined share of the leading three retailers in Finland is 80 percent, in Switzerland and Sweden 75 percent, in Denmark 61 percent, in Norway 58 percent, in Austria 50 percent, in Germany 46 percent and in Netherlands 42 percent whilst in the UK only 38 percent and in Greece 9 percent

⁶⁶see ANDERSEN CONSULTING, p. 23

⁶⁷see MOSTHAF J.: Absatzchancen aus der Sicht der Marktforschung, speech at the Fachtagung 1993 für Führungskräfte aus Verkauf und Marketing, Köln, Germany, 25.3.1993, Appendix, p. 2

⁶⁸see TORDJMAN A., DIONISIO J.: Strategies d'internalisation des entreprises du commerce Groupe HEC, Paris, France, 1991, p. 26

⁶⁹see QUELCH J.A., BUZZELL R.D., SALAMA E.R., p. 68; KELZ A.: Die Weltmarke, Idstein, Germany, 1989, p. 261

⁷⁰see TREADGOLD A.D., DAVIES R.L.: The internationalisation of retailing, Oxford, UK, 1988, p. 10-11; TREADGOLD A.: 1992 - The retail responses to a changing Europe, in: Marketing and Research today, Aug. 1989, p. 161-166, p. 163-164; GEORGE G., DILLER H.: Internationalisierung als Wachstumsstrategie des Einzelhandels, in: TROMMSDORF V. (Edited): Handelsforschung 1992 / 93 - Handel im integrierten Europa, Berlin, Germany, 1992, p. 165-186, p. 166

⁷¹see FAULDER G.: The Single Market, in: The Coca-Cola Retailing Research Group Europe, London, UK, January 1993, p. 12

⁷²see BENDALL A., p. 3

⁷³see TORDJMAN A., DIONISIO J., p. 26

⁷⁴see FAULDER G., p. 15

⁷⁵see non-attributed article: Europas Food Discounter - Made in Germany?, in: Rundschau für den Lebensmittelhandel, No. 7, 1993, p. 69; see further TREADGOLD A.: Managing international retail business, Oxford, UK, 1991, p. 27; MEISSNER H.G., SIMMET H.: Entwicklungstendenzen und Perspektiven des internationalen Einzelhandelsmarketing, in: TROMMSDORF V. (Edited): Handelsforschung 1990 - Internationalisierung im Handel, Berlin, Germany, 1990, p. 27-40, p. 28

⁷⁶see TORDJMAN A., DIONISIO J., p. 6

⁷⁷Marks & Spencer is also using franchising in 14 further countries, see TORDJMAN A., DIONISIO J., p. 6

⁷⁸see TREADGOLD A. (1991) , p. 27

⁷⁹see WHITEHEAD M., DAVIES G.: National laws restrict dream of pan-European retailing, in: European Review, No. 72, March 1993, p. 2

⁸⁰see TREADGOLD A. (1991), p. 25-26

⁸¹see BURT S.: The Internalisation of European Food Retailers, working paper at the Institute for Retail Studies, Stirling, UK, 1990, p. 15

⁸²see TIETZ B.: Konsequenzen des Binnenmarktes für die Rationalisierung im Handel, in: THEXIS, No. 1, 1989, p. 8-14, p. 9

⁸³see WRIGHT J.: An international retailer, in: European Retailer, No. 75, 1993, p. 7 and p. 12

⁸⁴see TORDJMAN A., DIONISIO J., p. 26; QUELCH J.A., BUZZELL R.D., SALAMA E.R., p. 69

⁸⁵TÄGER U.C., WEITZEL G.: Purchasing Organisations - Commissioned by the Commission of the European Communities - Directorate XXIII, Munich, Germany, 1991, p. 3

⁸⁶TÄGER U.C., WEITZEL G., p. 3

⁸⁷see QUELCH J.A., BUZZELL R.D., SALAMA E.R., p. 68