The Global Expansion of Transnational Retailers: A Case Study of the Localization Strategy of Costco in Taiwan

This research focuses on the global expansion of the transnational retail industry. Globalization is a phenomenon experienced by many industries in the present global economy. The global production network (GPN) framework can be used to explain and interpret the phenomenon of transnational firms' adaptation strategies. Due to market saturation in their home countries, retailers began to expand into East Asia in the 1980s. However, cultural differences and legislative limitations created barriers and restrictions for the transnational retailers making this transition. How do firms overcome these challenges? Through a case study of Costco in Taiwan, this research investigates the ways in which retailers adapt their strategies with regard to three concerns: site decisions, product mix selection, and supply network consolidation. The results shows that Costco opted for a strategy of lesser localization in all three domains. This research provides evidence to support this characterization along with examples of Costco's localization strategies via a case study and focuses on the issue of the balance between localization and standardization in the GPN framework.