Organizational identity and capability development in internationalization: transference, splicing and enhanced imitation in Tesco's US market entry

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Description/Abstract

Entry into international markets is a challenging process that fundamentally tests
existing capabilities. During this entry process, capability gaps arise that need to be
bridged to exploit the commercial opportunity and grow the business. Using a global
retailer, Tesco plc, as a case study and employing grounded theory development
techniques, we find that to achieve growth, two organizational attributes become
critical—structural coherence of the firm’s capabilities and organizational identity. We
identify three processes of capability development during market entry—transference,
splicing and enhanced imitation. Further, actions and processes that maintain or adapt
organizational identity serve as moderators of the relationship between these
processes and the capability deployment and internalization necessary for entry into
international markets. We discuss the study’s implications for theories of capability
development, organizational identity and foreign market entry.