ordjman, 1989;
Burt and Sparks, 2002). This study not only recognizes that retailers face formidable
barriers at different stages of international expansion and more often fail to expand
beyond the domestic market (Burt, 1991), but there are some challenges which have a
greater impact on SMEs dissuading the smaller retailer from engaging in international
activity. Therefore, the overall aim of this paper is to investigate the initial barriers into
internationalization experienced and perceived by SME retailers.
Traditionally, it has been argued that larger more established retailers are best able
to handle and absorb the financial and managerial risks associated with
internationalization (Waldham, 1978; Morganosky, 1994). However, international
activity is no longer confined to the large retailer as the empirical research by
Hutchinson et al. (2006, 2007) presents evidence of the internationalization process
exhibited by smaller specialist retailers. While the internet as a channel of international
growth has been acknowledged in the literature (e.g. McAuley, 2001; Etemad and
Trash, 2003; Foscht et al. 2006; Anon, 2007), the focus of this study is on barriers to
store-based international expansion experienced by retail SMEs.
In the field of SME internationalization, research has provided insights into the
types of barriers (both internal and external to the firm) that inhibit
internationalization and the differences in the barriers encountered at different
stages of internationalization (e.g. Morgan and Katsikeas, 1997; Alvarez, 2004). More
specifically, it is argued that research on the barriers in the initial stage of
internationalization is most important given that the perception of barriers by
non-exporters determines future engagement and performance in international
business activities (Yaprak, 1985; Leonidou, 1995). Notwithstanding this argument,
there has been limited attention in the literature not only to the barriers perceived by
SMEs with no foreign operations, but smaller firms in the retail industry. Therefore, by
investigating the barriers actually experienced by retail SMEs and also those perceived
by these retailers, thus acknowledging the importance of international growth by
SMEs for the UK economy and the retail industry (Bell, 1997; Weeks, 1999), this study
has important implications for government support organizations.
The paper begins with a review of the relevant literature on the barriers to
internationalization by presenting the key themes in the field of international retailing
and SME internationalization. The methodology section details the research position
adopted before discussing the case selection, data collection and analysis. Following
this, the findings section reports the key barriers identified by the retail SMEs in this
study. A discussion of the findings is presented and conclusions are drawn. As thefindings from this study have important implications for both owner/managers ofSMEs and government support organizations, recommendations are discussed in the
closing section of this paper.
Literature review
Retailer internationalization
The early work of Williams (1992) highlighted that retailing across borders is adifficult process and the international retail body of literature has since echoed theseSmall UK
retailers
545
words highlighting significant obstacles in the ret
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