Cage Framework

In relation to the case study of Metro Cash & Carry, the CAGE Distance Framework can be
applied to better understand the challenges the company faces as it expands into new markets.
Here are some examples of how the framework could be applied:

1. Cultural Distance: One of the key challenges for Metro Cash & Carry is adapting its
product mix to local tastes and preferences. This requires an understanding of the
cultural differences between countries, such as dietary habits, food preparation
methods, and product packaging. By analyzing the cultural distance between
Germany (where the company is based) and the countries it operates in, the company
can better tailor its offerings to meet local needs.
2. Administrative Distance: Another challenge for Metro Cash & Carry is navigating the
complex regulations and legal systems of different countries. The company may face
different licensing requirements, tax laws, and labor regulations in each market. By
analyzing the administrative distance between countries, the company can identify
potential barriers to entry and develop strategies to comply with local laws.
3. Geographic Distance: Metro Cash & Carry operates in many countries around the
world, which means it must deal with geographic distance and logistical challenges.
Shipping products across long distances can be expensive and time-consuming, and
the company must also contend with differences in infrastructure and transportation
networks. By analyzing the geographic distance between countries, the company can
develop strategies to optimize its supply chain and distribution networks.
4. Economic Distance: Finally, Metro Cash & Carry faces economic challenges as it
expands into new markets. Differences in income levels, exchange rates, and market
size can all impact the company's profitability and growth potential. By analyzing the
economic distance between countries, the company can identify potential
opportunities for growth and assess the risks of operating in different markets.

Overall, the CAGE Distance Framework can be a useful tool for Metro Cash & Carry to
better understand the challenges and opportunities of expanding into new markets. By
analyzing the cultural, administrative, geographic, and economic differences between
countries, the company can develop tailored strategies to succeed in each market.

a) what have been MCC's key competitive advantages as it has moved into the emerging
market? 

what have been MCC's key competitive advantages as it has moved into the emerging market
in relation to case study metro: cash and carry hbr
1/1

Metro Cash and Carry (MCC) has had several key competitive advantages as it has moved
into the emerging market, as highlighted in the Harvard Business Review (HBR) case study
on MCC.

1. Early mover advantage: MCC was one of the first companies to enter the emerging
market with a cash-and-carry model. This allowed the company to establish its
presence and gain a foothold in the market before competitors could catch up.
 2. Customer-centric approach: MCC's business model is focused on understanding the
needs of its customers, primarily small and medium-sized businesses, and providing
them with products and services that meet those needs. This has helped the company
to build strong relationships with its customers and establish a loyal customer base.
3. Efficient supply chain: MCC has implemented an efficient supply chain system that
allows it to offer a wide range of products at competitive prices. This is achieved
through direct sourcing, bulk purchasing, and efficient logistics management.
4. Strong brand reputation: MCC has built a strong brand reputation through its
commitment to quality, reliability, and value for money. This has helped the company
to differentiate itself from its competitors and build trust with its customers.
5. Localized approach: MCC has adapted its business model to suit the local market,
taking into account factors such as cultural differences, customer preferences, and
regulatory requirements. This has helped the company to establish a strong local
presence and compete effectively in the market.

what role did institutional context play in challenging MCC's wholesaling format in

Russia, China, and India?

Institutional context played a significant role in challenging Metro Cash & Carry's (MCC)
wholesaling format in Russia, China, and India. In each of these countries, MCC faced
different institutional challenges that required adaptations to its business model.

In Russia, MCC faced challenges related to corruption and the weak legal system. Corruption
was rampant in the Russian retail industry, and MCC had to navigate this environment by
developing relationships with local officials and working within the existing system.
Additionally, the weak legal system made it difficult for MCC to enforce contracts and
protect its intellectual property rights.

In China, MCC faced challenges related to the country's complex regulatory environment.
The Chinese government tightly controlled the retail industry, and MCC had to navigate a
complex web of regulations and restrictions to operate in the country. For example, MCC had
to partner with local companies to gain access to the market and comply with local
regulations.

In India, MCC faced challenges related to the country's fragmented retail industry and poor
infrastructure. India's retail industry was highly fragmented, with many small retailers
operating in local markets. Additionally, the country's poor infrastructure made it difficult for
MCC to transport goods and establish a reliable supply chain.

To address these institutional challenges, MCC had to adapt its business model in each
country. For example, in Russia, MCC focused on building relationships with local officials
and investing in security measures to protect its stores. In China, MCC partnered with local
companies and invested heavily in compliance and regulatory management. In India, MCC
invested in building its own supply chain and developing relationships with local suppliers.

Overall, institutional context played a significant role in challenging MCC's wholesaling

format in Russia, China, and India. To succeed in these markets, MCC had to navigate
complex regulatory environments, build relationships with local officials and partners, and
adapt its business model to meet the unique challenges of each market.
b) what would you recommend to MCC's management towards strategic expansion and public
relations in India going forward?  

Based on the case of Metro Cash & Carry in India, here are some recommendations for the
management towards strategic expansion and public relations:

1. Focus on Localization: Metro Cash & Carry should focus on localizing their products
and services to better cater to the Indian market. This could involve sourcing products
locally, adapting their store formats to suit local tastes, and providing a more
personalized shopping experience for Indian customers.
2. Build Strong Relationships with Local Suppliers: Building strong relationships with
local suppliers can help Metro Cash & Carry to secure a reliable and cost-effective
supply chain in India. The company should invest in building partnerships with local
suppliers to ensure the quality and consistency of its products.
3. Expand Online Presence: With the increasing popularity of e-commerce in India,
Metro Cash & Carry should focus on expanding its online presence. The company can
leverage digital channels to reach a wider audience and offer a more convenient
shopping experience for its customers.
4. Enhance Public Relations: In order to enhance its public relations in India, Metro
Cash & Carry should actively engage with its customers and stakeholders through
various channels such as social media, events, and community outreach programs.
The company should also take steps to address any negative perceptions or
misconceptions about its brand in the Indian market.
5. Focus on Sustainability: Sustainability is becoming an increasingly important issue
for customers and stakeholders in India. Metro Cash & Carry should focus on
sustainable practices in its operations such as reducing waste, using renewable energy
sources, and supporting local communities.

Overall, Metro Cash & Carry should focus on localizing its operations, building strong
relationships with local suppliers, expanding its online presence, enhancing public relations,
and focusing on sustainability to succeed in the Indian market.

VRIO

VRIO stands for – Value of the resource that Metro Carry possess, Rareness of those
resource, Imitation Risk that competitors pose, and Organizational Competence of Metro
Carry. VRIO and VRIN analysis can help the firm.

Competitive
Resources Value Rare Imitation Organization
Advantage
Not significant
Can be Not been
Access to Cheap in creating
Yes No imitated by totally
Capital competitive
competitors exploited
advantage
Distribution and Yes, as it helps No Can be Yes Medium to
Logistics Costs in delivering imitated by Long Term
Competitiveness lower costs competitors Competitive
 Competitive
Resources Value Rare Imitation Organization
Advantage
but it is
Advantage
difficult
Yes, the e-
No, most of
Opportunities in commerce The AI and In the long run
the
the E-Commerce space is rapidly inhouse It is just the it can provide
competitors
Space using growing and analytics can start for the sustainable
are investing
Present IT firm can be difficult organization competitive
in IT to enter
Capabilities leverage the to imitate advantage
the space
opportunities

RAT

"Relevant, appropriable, and transferable" (RAT) is a framework that can be used to assess
whether a company's resources and capabilities are likely to lead to sustainable competitive
advantage.

In the case of Metro Cash & Carry, HBR elaborated on how this framework can be applied to
their business.

Relevant:

Metro Cash & Carry's resources and capabilities are highly relevant to the competitive
environment they operate in. They have built a strong brand name in the wholesale industry,
and they have established a large network of stores in various countries. Their expertise in
supply chain management, logistics, and purchasing gives them an edge over their
competitors.

Appropriable:

Metro Cash & Carry's resources and capabilities are also appropriable, which means that they
can be protected from imitation by competitors. Their extensive network of stores and supply
chain management systems cannot be easily replicated. Furthermore, the company invests
heavily in training and development programs for its employees, which creates a unique
organizational culture that is difficult to copy.

Transferable:

Finally, Metro Cash & Carry's resources and capabilities are transferable, which means that
they can be applied to other markets and business areas. The company has successfully
expanded into emerging markets such as China and India, and they have also launched online
sales channels. By leveraging their existing capabilities and expertise, they have been able to
enter new markets and grow their business.

In conclusion, Metro Cash & Carry's resources and capabilities are highly relevant,
appropriable, and transferable, which gives them a strong foundation for sustainable
competitive advantage in the wholesale industry.
CAT

In the context of Metro Cash and Carry, the terms complementary, appropriable, and
transferable (CAT) refer to a framework for analyzing the sources of competitive advantage
that can be used by a company.

Complementary resources are those that are necessary for the company to operate effectively
but are not sufficient on their own. For Metro Cash and Carry, complementary resources
might include its supply chain infrastructure, its relationships with suppliers and customers,
and its brand reputation.

Appropriable resources are those that are unique to the company and difficult for competitors
to imitate or replicate. These might include Metro Cash and Carry's proprietary technology,
its distribution network, or its exclusive contracts with suppliers.

Transferable resources are those that can be easily transferred to other markets or industries.
For Metro Cash and Carry, transferable resources might include its expertise in supply chain
management or its brand reputation, which could be leveraged to enter new markets or
industries.

By analyzing its resources in terms of the CAT framework, Metro Cash and Carry can
identify its sources of competitive advantage and develop strategies to sustain or enhance
those advantages over time. For example, the company might focus on strengthening its
complementary resources by investing in supply chain infrastructure or building stronger
relationships with suppliers and customers. It might also invest in developing new
appropriable resources, such as proprietary technology or unique distribution capabilities, that
can give it a competitive edge. Finally, it might look for ways to transfer its existing
resources to new markets or industries, such as by leveraging its supply chain expertise to
enter the logistics or e-commerce space.

J Curve

Understanding the J curve

The J-curve is useful to demonstrate the effects of an event or action over a set period of
time. Put bluntly, it shows that things are going to get worse before they get better.

Key takeaways

 A J-curve depicts a trend that starts with a sharp drop and is followed by a dramatic
rise.
 The trendline ends in an improvement from the starting point.
 In economics, the J-curve shows how a currency depreciation causes a severe
worsening of a trade imbalance followed by a substantial improvement.

Factors for setting up new business in relation to Metro: Cash and Carry HBR
Metro Cash and Carry is a wholesale retailer that provides a range of products and services to
businesses, including food, beverages, equipment, and supplies. If you are considering setting
up a new business in relation to Metro Cash and Carry, there are several factors that you
should consider:

1. Location: The location of your business is critical. You should ensure that your
business is located near a Metro Cash and Carry store so that you can easily purchase
products and supplies. This will save you time and money in the long run.
2. Market analysis: You should conduct a thorough analysis of the market to determine
the demand for the products you plan to sell. You should also identify the competition
in the area and determine how you can differentiate your business from the
competition.
3. Business plan: You should develop a detailed business plan that outlines your goals,
objectives, and strategies for success. Your plan should also include financial
projections, marketing strategies, and operational plans.
4. Capital requirements: You will need to determine the amount of capital you will need
to start and operate your business. This will depend on the size and scope of your
business, as well as the cost of the products and supplies you need to purchase from
Metro Cash and Carry.
5. Marketing and promotion: You will need to develop a marketing and promotion plan
to attract customers to your business. This may include advertising, promotions, and
other marketing strategies.
6. Legal and regulatory requirements: You should ensure that you comply with all legal
and regulatory requirements for setting up and operating a business. This may include
obtaining business licenses, permits, and registrations.

Overall, setting up a new business in relation to Metro Cash and Carry can be a great
opportunity, but it requires careful planning, analysis, and execution to ensure success.

In economics, it is often used to observe the effects of a weaker currency on trade balances.
The pattern is as follows:

 Immediately after a nation's currency is devalued, imports get more expensive and
exports get cheaper, creating a worsening trade deficit (or at least a smaller trade
surplus).
 Shortly thereafter, the sales volume of the nation's exports begins to rise steadily,
thanks to their relatively cheap prices.
 At the same time, consumers at home begin to buy more locally-produced goods
because they are relatively affordable compared to imports.
 Over time, the trade balance between the nation and its partners bounces back and
even exceeds pre-devaluation times.

Value Chain

Metro Cash and Carry is a global wholesale company that operates in various countries,
providing a range of products and services to customers such as retailers, hotels, restaurants,
and caterers. Value chain analysis can be used to understand the company's competitive
advantage and how it creates value for its customers.
Value chain analysis is a tool used to identify the various activities that a company
undertakes to create value for its customers. It involves breaking down the company's
activities into primary and support activities and analyzing each activity to determine how it
contributes to the overall value creation process.

In the case of Metro Cash and Carry, the primary activities include inbound logistics,
operations, outbound logistics, marketing and sales, and customer service. Inbound logistics
involves the sourcing of products from suppliers, operations involve the storage and
management of these products, outbound logistics involve the distribution of these products
to customers, marketing and sales involve the promotion of products to customers, and
customer service involves providing after-sales support to customers.

Support activities include procurement, technology development, human resource

management, and infrastructure. Procurement involves the sourcing of goods and services
required for the company's operations. Technology development involves the development
and implementation of technology to improve the company's operations. Human resource
management involves the management of the company's workforce. Infrastructure involves
the provision of facilities and services required for the company's operations.

Metro Cash and Carry's competitive advantage lies in its efficient supply chain management,
economies of scale, and extensive network of stores. The company's primary activities are
designed to ensure that it can provide customers with a wide range of products at competitive
prices while maintaining high levels of customer service. Its support activities are designed to
ensure that it can source products efficiently, manage its workforce effectively, and leverage
technology to improve its operations.

Overall, value chain analysis provides a useful framework for understanding how Metro Cash
and Carry creates value for its customers and how it can improve its operations to maintain its
competitive advantage. By analyzing each activity in the value chain, the company can
identify areas for improvement and implement strategies to enhance its value creation process