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Best Buy in Russia: Great Timing
August 22, 2008
Shortly after Russia invaded Georgia, Best Buy said it had readied the license for the Future Shop brand in Russia.
International expansion has been sited by the retailer as a key strategy for future growth. But Russia under Vladimir Putin has made a habit of smacking around Western companies (at least in the oil sector).
The result of the current fighting, according to Clifford Kupchan, director for Europe and Eurasia at the Eurasia Group, is a complete loss of investor confidence in Russia:
More broadly, I think Russia as an island of stability and a safe haven from the credit crunch—that perception of Russia is on life support. Essentially over. There’s been four reasons: TNK-BP, Mechal, the Russian government’s willingness to use administrative means to break up cartels and implement de facto price controls (which means there’s more strategic risk in consumer sectors as well as strategic sectors), and fourth is the war. When you add those four together, the investment climate has taken a real, real hit over the last month. [emphasis mine]
[Hat tip: Daniel Drezner]
Posted by Greg Scoblete on August 22, 2008 | Comments (0)
