Market Entry Human Resources

Market Entry

Human Resources

In terms of training, frontline associates will need minimal previous experience and can be trained in areas such as cashiering and inventory management during an orientation period upon starting with the company. Management will need greater support and may necessitate the need for a training program to be designed to meet the new international scope of operations. Local store managers will have market knowledge, but must carry out duties in a way that is cohesive with the RONA corporate vision. By establishing a training program for store managers, RONA can cultivate a stronger market presence by unifying and organizing its outlets in a consistent manner. Managers should also have some previous business experience, whether managerial or administrative, as effective day-to-day operations are key to the expansion’s success.

A development and management team must be created within the RONA corporate structure in order to oversee and control the Austrian expansion. Under the VP of Retail, Luc Rodier, a new international development team should be established alongside the domestic development teams. This division must receive full support from other divisions to ensure continued success. This team would initially work closely with HR and legal divisions upon beginning the expansion process to ensure legality and accordance with all Austrian laws and regulations relating to the expansion process.

If international legal counsel is not readily available to RONA at this time, the company must take action to ensure that it retains expert legal counsel when attempting the expansion. Though the laws are well-developed in Austria, the legal and regulatory systems are still fundamentally different in some ways. It is essential that RONA takes the steps necessary to safeguard itself against any unexpected challenges that it may face.

Products and Services

RONA offers almost 104,000 regular products using a value chain involving 2,500 suppliers. 90% of products sold in Canada come from suppliers having a place of business in Canada, however much of the product is manufactured and imported from overseas.[RON14] This means that RONA’s supply chain is very flexible in terms of routing existing supply chains to the new market. RONA will experience no significant difficulties in managing its supplier relationships and acquiring the necessary retail products when conducting its expansion.

The organization also controls several brands under the brand names of “RONA”, “UBERHAUS”, and “FACTO”. UBERHAUS in particular is a line of higher-end furnishings and renovation materials in a European style. [RON14] This brand may be expanded to be featured within the Austrian retail division as it lends itself well to the market in both name and target market. It can also be considered for the overall theme and brand name of Austrian outlets as it represents the higher-end market that RONA seeks and also provides branding that may be appealing and self-identifying (roughly translates in German to ‘better house’) to the Austrian consumer.

Main competitors in the market are bauMax (65 locations) and Hornbach (11 locations). These retail companies have the two largest market shares in the home improvement market in Austria. The retail company bauMax is a larger chain of 158 home improvement stores across nine countries, mostly within Eastern Europe as well as Turkey. Hornbach is a smaller national retailer with outlets in the main cities of Austria. These companies operate hyper-market style retail divisions, offering ‘one-stop-shop’ capabilities for consumers, much like RONA’s home building centre formats within the domestic market. RONA’s business strategy differs from its competitors within the Austrian market in that it will attempt to fill an unfulfilled need within the higher-end of the renovation and home improvement industry. It will focus on higher quality products and materials for do-it-yourself minded individuals, designers and contractors.