International Journal of Retail & Distribution Management

Purpose – The purpose of this paper is to investigate the impacts of the business environment on operations strategy encompassed by competitive priorities in China's retail sector.

Design/methodology/approach – This is a case study of a multinational retailer to understand how the company develops appropriate operations strategies to survive in the competitive and dynamic Chinese business environment.

Findings – The study identifies that companies intending to expand their businesses in emerging markets face many challenges in the new business environment, and that various dimensions of the business environment (e.g. business cost, competitive hostility, and environmental dynamism) affect the development of retail operations strategy. The strategy of flexibility is particularly important for international companies to survive in an increasingly dynamic and competitive environment. Foreign retailers need to be flexible and agile, adapting to the Chinese market environment in many ways in order to succeed.

Originality/value – This study seems to be the first in investigating the effects of the business environment on international operations strategy in the service (retail) sector, especially in the Chinese context.