A Study of the Internationalization–Performance Relationship in Global Retailing: The Moderating Role of Brand Standardization and Cultural Diversity

Abstract

While the internationalization–performance relationship has been extensively studied in the international business literature, it has only recently begun to be systematically and empirically explored in the retailing context, albeit with mixed findings. This study extends this emerging stream of research on retail internationalization by investigating the moderating role of brand standardization, or the extent to which retailers standardize their domestic store-as-a-brand across foreign markets, using longitudinal data from global retailers. The authors demonstrate that the internationalization–performance relationship is positive and curvilinear for retailers, and it is positively moderated by brand standardization. In particular, brand standardization offers benefits at low and high levels of internationalization, which suggests a learning curve with respect to global brand management as retailers internationalize. The study also finds that cultural diversity in retailers’ foreign markets acts as a boundary condition by weakening this moderating effect of brand standardization. This research contributes to firm internationalization, standardization–adaptation, and global brand management literature streams, with implications for global retailers.