Research and Market Entry Report for Austria Krystian Raymond

Company and Report Overview

Due to saturation across the domestic market, and strong competition within the US, RONA has turned to international markets to satisfy growth targets and reach a new consumer base. RONA has experienced consistent success within the domestic market and now looks towards the EU for long-term market development. Expanding into the EU offers the advantages of a standardized regulatory system, creating a single market economy across all EU member states. The country chosen for the initial expansion is Austria due to its stable economy and well-regulated markets. It boasts very good infrastructure and stable government and offers a significant portion of the population within RONA’s target demographics. Austria is very open to investment and provides an ideal starting point for a long-term expansion strategy within the EU. It is one of the wealthiest countries in Europe and has remained relatively stable throughout the economic crisis and is forecasted to remain stable over the long-term.

RONA will enter the market through acquisition and rebranding of independent or small-chain home improvement retail outlets within the Vienna region. The city and suburbs hold a large portion of Austria’s population and provides the best access to consumers. The acquisition will focus on six outlets within strong market locations throughout the greater Vienna area. This will provide the first exploratory steps in the long-term goal of establishing strong market presence within the EU. The retail outlets will be targeted towards middle-aged, do-it-yourself consumers and those in the home renovation market. Austria is a wealthy and quality-minded nation and the new expansion outlets should reflect that by positioning themselves in the higher-end of the home improvement retail market.

A new international market development division is to be created, along with an expansion of existing divisions (marketing, accounting, merchandising, etc.) to handle the increased responsibilities. Once operational, each retail location will have projected annual revenues of $7 million, totalling $210 million over five years. Restructuring and implementation costs are estimated at $6.5 million per location, totalling $39 million.

Corporate History

RONA was founded in Quebec in 1939 by a group of hardware retailers under the name Les Marchands en Quincailleries Ltée. The group was originally formed in order to bypass a monopoly on hardware merchandise by wholesalers, thereby giving the group direct access to manufacturers, which led to lower costs for the co-operative of retailers. Several years after its inception, two members of the group, Rolland Dansereau and Napoléon Piotte, would take charge of the organization. In 1960, the two men incorporated the company Quincaillerie Ro-Na Inc. The first two letters of each man’s first name would be used as the official brand for the group of stores (Ro-Na). The next several years were spent acquiring retailers and growing the upstart company.[RON14]

The next two decades saw RONA continue its strategy of creating purchasing alliances and performing acquisitions as it continued its steady growth across Quebec. The early 1970s saw RONA move into its current headquarters in Boucherville, Quebec, as well as change its official name to Marchands Ro-Na Inc. The early 1980s saw the introduction of specialized ‘Ambiance’ boutiques that catered to interior decorating and home improvement, which signalled a significant step forward in modernizing the company’s business model. In 1984, Ro-Na established a purchasing alliance with Ontario-based Home Hardware Stores Inc. In 1988 Ro-Na created a merger with the well-established buildings material company, Dismat, which created the Ro-Na Dismat Group.[RON14]

The 1990s saw the Ro-Na Dismat Group expand into the emerging big-box store sector by adding stores and more clearly defining banner positioning within different markets. In the mid-1990s the Ro-Na Dismat Group created three new store banners: RONA L'entrepôt, RONA L'express and RONA L'express Matériaux, while eliminating the Le Quincailleur and Dismat names. In 1998 the corporation’s name was officially changed to RONA Inc., as it currently stands today. 1999 also saw the opening of a massive 650,000-square-foot distribution centre next to its headquarters in Boucherville. The facility doubled its warehouse capacity and created substantial cost savings for the company.[RON14]

In the 2000s, RONA Inc. continued to grow through acquisitions, construction of new stores and in-store sales increases. RONA Inc. experienced a high pace of growth in this period as it shifted its expansion focus away from Quebec and into other markets like Ontario and Western Canada. In the first half of the decade alone, RONA acquired well over 100 locations across Canada from retailers such as Réno-Dépôt, Cashway, Lansing Buildall and Revelstoke. In 2002 RONA Inc. achieved an important milestone, entering the Toronto Stock Exchange with an initial public offering of common shares worth $150.1 million. This was a significant step forward for the company, helping to further cement itself as a major player within the Canadian home improvement industry.[RON14]

Directory: 2013
2013 -> Annual InStructional unit plan
2013 -> The Ministry of Education and Science of Ukraine
2013 -> #1 a lifesafer of virginia inc
2013 -> Name(s): your name here team or Group #(if applicable): Professor’s name
2013 -> Alcott Local School Council (lcs) Meeting Minutes
2013 -> Table Of Contents introduction 2
2013 -> Supplemental demographic information
2013 -> 【Education&Working Experience】

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