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Case Study: Carrefour Running Head: Case Study: Carrefour
Case Study: Carrefour Running Head: Case Study: Carrefour
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Case Study: Carrefour
EXTERNAL ENVIRONMENT
GENERAL
o DEMOGRAPHIC
aging rapidly, ethnic mixes in developed countries are changing rapidly, and
o ECONOMIC
identifying new products and services to offer to its customers. High oil
o POLITICAL/LEGAL
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Case Study: Carrefour
Later on, it worked with financial or industrial partners only when national
(p. C 77)
Carrefour argued that this law would favor its rival, Wal-Mart. When the
Central Retail Corp. sold its 40 percent shareholding in 1998, this law made it
[A]ll products within its stores were “halhal” in compliance with prevailing
Since 1992, foreign participation in retailing had been permitted through joint
In 1999 China’s central government ruled that foreign companies could not
own more than 65 percent of any retailing enterprise in China. (p. C 81)
to shut down all the stores if Carrefour did not comply with central
In 2004 China announced that it would honor its pledges to open the booming
joint-venture requirements before the end of the year. Beijing also promised
(p. C 81)
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Case Study: Carrefour
Political risk in some countries remains comparatively high as does the threat
o SOCIO-CULTURAL
[N]ew markets […] had seen dramatic changes in consumer buying habits,
Asian customers still tended to shop daily at wet markets or “mom & pop”
Moreover, impulse buying was on the rise and replacing necessity purchasing.
(p. C 78)
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Case Study: Carrefour
and other major changes in buying habits tie in nicely with Carrefour’s
o TECHNOLOGICAL
better analysis of data related to existing and future customer bases. The
o GLOBAL
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Case Study: Carrefour
among other areas, that make it difficult to maintain low prices. The rapid
countries relax regulations that hinder trade and foreign entry into domestic
and profitability.
INDUSTRY
o INDUSTRY DEFINITION
In 2003 Carrefour was the second-largest mass retailer in the world[.] (p. C
73)
(p. C 73)
In Europe and China, Carrefour is the number one retailer in terms of size. (p.
C 74)
It built a reputation as the retailer that offered the most variety and freshness
The retailer operated exclusively in France until the late 1960s before
expanding into Spain, where under the name of Pryca, it became the country’s
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Case Study: Carrefour
BARRIERS TO ENTRY
PRODUCT DIFFERENTIATION
shuttle services for customers and play areas for children, as well as
o Carrefour, with Makro, was the first foreign retailer to establish the
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Case Study: Carrefour
82)
ECONOMIES OF SCALE
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Case Study: Carrefour
74)
SWITCHING COSTS
shuttle services for customers and play areas for children, as well as
o The basics of Carrefour’s concept are (1) one-stop shopping, (2) low
prices, (3) self-service, (4) quality products, (5) freshness, (6) free
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Case Study: Carrefour
reminding customers that they will be refunded if they find the same
o When first moving into Asia, Carrefour opted for joint ventures and
51)
10
Case Study: Carrefour
GNX online supply platform with Oracle and Sears, whereby suppliers
and retailers can exchange information via the Internet and optimize
76)
o Managing the supply chain was another major challenge. (p. C 78)
aggressiveness, but they were much more flexible than their Western
and at first used Taiwanese negotiators for its suppliers in China. (p. C
80)
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Case Study: Carrefour
o Since 2002 a new organization within the group has aimed to expand
market outlets for its suppliers and enhance its product offering in its
o One concrete barrier to entry into the Japanese market was the close
online supply platform all serve to increase barriers to entry for new
firms.
GNX online supply platform with Oracle and Sears, whereby suppliers
and retailers can exchange information via the Internet and optimize
76)
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Case Study: Carrefour
could capture both big and small accounts and grow much faster than
o Despite its efforts, Carrefour failed to find large sites suitable for
“difficulties in acquiring real estate for new stores and the lack of
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Case Study: Carrefour
EXPECTED RETALIATION
Vigorous retaliation can be expected when the existing firm has a major
“China represents a huge market and now it has acquired its WTO
Thanks to its massive buying power, Carrefour could guarantee low prices
customers that they will be refunded if they find the same product cheaper
Until the year 2000 international competition had been rather timid but
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Case Study: Carrefour
“It was as if the Huns had arrived in Taiwan,” Gerard Clerc said of the
In 2003 Carrefour was the number three food retailer in Malaysia but was
facing increasing competition from strong local and foreign retailers, such
open one or two more stores in Beijing in 2004 as well as a store in Jinan,
In 2004 China announced that it would honor its pledges to open the
abolishing joint-venture requirements before the end of the year. (p. C 81)
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Case Study: Carrefour
new entrants can expect swift and decisive retaliation when opening new
o POWER OF SUPPLIERS
Thanks to its massive buying power, Carrefour could guarantee low prices
In some markets, such as China, Carrefour has launched its own product line
sourced and the remainder is sourced through local importers or the trading
office in Hong Kong. Carrefour has built big global procurement centers
In order to increase its profitability, in 2000 Carrefour created the GNX online
supply platform with Oracle and Sears, whereby suppliers and retailers can
exchange information via the Internet and optimize the flow of merchandise,
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Case Study: Carrefour
Worldwide, Carrefour requested that its stores make less use of plastic in
(p. C 76)
aggressiveness, but they were much more flexible than their Western
counterparts. They sold products, not services, and often lacked information
regarding basic data on their sales, inventory level, and even internal
Carrefour is one of the world’s major exporters of Chinese products. (p. C 81)
Since 2002 a new organization within the group has aimed to expand market
outlets for its suppliers and enhance its product offering in its European stores.
(p. C 81)
channels. After the Japanese distributors lost their case, Carrefour resumed its
Power of suppliers is low. The supplier groups are less concentrated and not
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Case Study: Carrefour
available to firms, retail firms are a significant customer for supplier groups,
and there is little threat of forward integration into the retail industry.
o POWER OF BUYERS
Thanks to its massive buying power, Carrefour could guarantee low prices
customers that they will be refunded if they find the same product cheaper
Taking local constraints into account, Carrefour has added new services in
developing markets, such as free shuttle services for customers and play areas
[T]he Asian crisis did not affect the company; on the contrary, Carrefour
benefited, thanks to its low price policy and emerged even stronger from the
Fortunately, Taiwan was relatively spared by the Asian crisis and consumption
As an example, the “pork quality line” covered the entire cycle from breeding
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Case Study: Carrefour
For religious reasons it could not sell fresh pork, but focused on beef and
They make it their daily routine to visit a nearby supermarket where other
Carrefour was planning to sell its eight stores in Japan due to “difficulties in
acquiring real estate for new stores and the lack of touch with Japanese
Neither high nor low. Although buyers purchase a significant portion of the
buying habits and tastes in different countries can increase buyers’ power on
power.
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Case Study: Carrefour
(p. C 73)
For years its claim to fame was to offer a massive array of quality goods in
one place, at reasonable prices rather than bargain-basement value. (p. C 74)
Even though Asian customers still tended to shop daily at wet markets or
“mom & pop” stores, buying patterns were slowly changing and a certain
77-78)
China’s retail scene differs substantially from one store type to another as well
They make it their daily routine to visit a nearby supermarket where other
costs, and retailers may tailor their operations to the local needs of
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Case Study: Carrefour
cultural routines.
(p. C 74)
Sainsbury’s (U.K.), Kroger (U.S.) and Coles Myer (Australia). (p. C 76)
Since the liberalization of the Korean retail market in 1996, local and
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Case Study: Carrefour
In 2003 Carrefour was the number three food retailer in Malaysia but was
facing increasing competition from strong local and foreign retailers, such
retailer, the Brilliance Group, with the aim of creating a local giant with
Japan was left with five major general merchandise store chains, namely
High. There are a tremendous number of large and medium sized firms
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Case Study: Carrefour
competitors.
“China represents a huge market and now it has acquired its WTO
Carrefour was generally successful when it entered new markets that had
women in the labor force, and a large increase in the ownership of cars and
Wal-Mart and Tesco that were posting stronger domestic growth. (p. C 74)
Even though Asian customers still tended to shop daily at wet markets or
“mom & pop” stores, buying patterns were slowly changing and a certain
(pp. C 77-78)
Before the Asia crisis Malaysia had experienced one of the strongest
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Case Study: Carrefour
Singapore was not overly affected by the Asian crisis, posting a rise of
second store was opened in Plaza Singapura in December 2003. (p. C 79)
In 2004 China announced that it would honor its pledges to open the
abolishing joint-venture requirements before the end of the year. (p. C 81)
This is not the case in Japan, however, where a saturated market serves to
It built a reputation as the retailer that offered the most variety and
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Case Study: Carrefour
included food as well as household goods and health and beauty products)
78)
Subsequently, Carrefour increased the size of its new stores. (p. C 78)
(p. C 82)
High fixed costs for massive storefronts, including land and facilities,
combined with high storage costs for perishable goods, serve to increase
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Case Study: Carrefour
But the Asian crisis forced these local retailers to freeze their expansion
plans, and some even had to file for bankruptcy. (p. C 78)
from China and eventually divested all its activities in the Asian region. (p.
C 81)
China’s largest retailer, the Brilliance Group, with the aim of creating a
different firms match, and when they operate in the same region, the
strategic stakes will be high. In this case, the rivalry among competitors
will intensify.
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Case Study: Carrefour
In the United Arab Emirates (UAE), the joint venture company between
Majid al Futtaim and Carrefour was the most dynamic and fast-moving
online supply platform with Oracle and Sears, whereby suppliers and
retailers can exchange information via the Internet and optimize the flow
When first moving into Asia, Carrefour opted for joint ventures and
partnerships to make up for its lack of knowledge of the Asian market. (p.
C 77)
(p. C 78)
Its relationship with Lianhua, one of the two major local retailers, helped
were set up with the objective of doubling export volumes by 2005. (p. C
81)
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Case Study: Carrefour
In 2004 China announced that it would honor its pledges to open the
abolishing joint-venture requirements before the end of the year. (p. C 81)
INTERNAL ENVIRONMENT
RESOURCES
o TANGIBLE RESOURCES
FINANCIAL
Carrefour has seen consistent growth in revenues and net income since 1993. Also, net
profit margin has experienced consistent growth from 1999-2003, after experiencing a
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Case Study: Carrefour
BORROWING CAPACITY
with net sales totaling €70.5 billion (US$84 billion) and net profits of
ordered to sell its excess shares (above the regulatory 65 percent limit)
and in 2002 signed a deal to sell stakes to local partners. (p. C 81)
(p. C 81)
(p. C 74)
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Case Study: Carrefour
76)
ordered to sell its excess shares (above the regulatory 65 percent limit)
and in 2002 signed a deal to sell stakes to local partners. (p. C 81)
o Carrefour has only just started making profits in all its stores[.] (p. C
82)
o Thus its three stores were showing major losses and Carrefour had to
ORGANIZATIONAL
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Case Study: Carrefour
the format best suited to the particular market and adapting that format
76)
GNX online supply platform with Oracle and Sears, whereby suppliers
and retailers can exchange information via the Internet and optimize
76)
o The pressure for sales and profit is put on department heads, as each
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Case Study: Carrefour
(p. C 76)
o When first moving into Asia, Carrefour opted for joint ventures and
(p. C 77)
o Rather than sharing their knowledge with their staff, local managers
C 78)
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Case Study: Carrefour
o Since 2002 a new organization within the group has aimed to expand
market outlets for its suppliers and enhance its product offering in its
PHYSICAL RESOURCES
EQUIPMENT
geographical zones: Europe and the Middle East, Latin America, and
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Case Study: Carrefour
the format best suited to the particular market and adapting that format
o Carrefour has opted in many Asian countries for an urban location for
its stores due to the population density, and has positioned its
human resource hub for other Asian markets, especially in China. (p. C
78)
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Case Study: Carrefour
C 78)
(p. C 79)
o In 2003 it was ranked the top foreign retailer [in China] with net sales
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Case Study: Carrefour
TECHNOLOGICAL RESOURCES
o The basics of Carrefour’s concept are (1) one-stop shopping, (2) low
prices, (3) self-service, (4) quality products, (5) freshness, and (6) free
76)
GNX online supply platform with Oracle and Sears, whereby suppliers
and retailers can exchange information via the Internet and optimize
76)
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Case Study: Carrefour
(p. C 79)
o Carrefour’s aim had always been to pioneer urban centers that had
82)
o INTANGIBLE RESOURCES
HUMAN RESOURCES
KNOWLEDGE
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Case Study: Carrefour
instinctive feeling than the results of the market study. (p. C 75)
expertise and experience and the local executives sharing their know-
o Rather than sharing their knowledge with staff, local managers had the
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Case Study: Carrefour
TRUST
instinctive feeling than the results of the market study. (p. C 75)
expertise and experience and the local executives sharing their know-
(p. C 76)
o Rather than sharing their knowledge with their staff, local managers
o Its relationship with Lianhua, one of the two major local retailers,
MANAGERIAL CAPABILITIES
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Case Study: Carrefour
instinctive feeling than the results of the market study. (p. C 75)
customers and play areas for children, as well as home delivery. (p. C
76)
76)
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Case Study: Carrefour
(p. C 76)
o Managing the supply chain was another major challenge. (p. C 78)
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Case Study: Carrefour
o Carrefour fell short of its original plan to persuade all of its Japanese
ORGANIZATIONAL ROUTINES
o For years its claim to fame was to offer a massive array of quality
(p. C 74)
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Case Study: Carrefour
the format best suited to the particular market and adapting that format
reminding customers that they will be refunded if they find the same
customers and play areas for children, as well as home delivery. (p. C
76)
76)
43
Case Study: Carrefour
o When first moving into Asia, Carrefour opted for joint ventures and
o Carrefour’s aim had always been to pioneer urban centers that had
44
Case Study: Carrefour
the Japanese market with much fanfare and little sensitivity to Japan’s
82)
INNOVATION RESOURCES
IDEAS
82)
45
Case Study: Carrefour
o Carrefour’s aim had always been to pioneer urban centers that had
customers and play areas for children, as well as home delivery. (p. C
76)
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Case Study: Carrefour
SCIENTIFIC CAPABILITIES
GNX online supply platform with Oracle and Sears, whereby suppliers
and retailers can exchange information via the Internet and optimize
76)
CAPACITY TO INNOVATE
82)
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Case Study: Carrefour
o Carrefour’s aim had always been to pioneer urban centers that had
customers and play areas for children, as well as home delivery. (p. C
76)
REPUTATIONAL RESOURCES
o It built a reputation as the retailer that offered the most variety and
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Case Study: Carrefour
o Worldwide, Carrefour requested that its stores make less use of plastic
79)
operations for destroying jobs and killing the local retail industry. (p. C
81)
BRAND NAME
o It built a reputation as the retailer that offered the most variety and
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Case Study: Carrefour
o It built a reputation as the retailer that offered the most variety and
o The basics of Carrefour’s concept are (1) one-stop shopping, (2) low
prices, (3) self-service, (4) quality products, (5) freshness, and (6) free
82)
o “[…] difficulties in acquiring real estate for new stores and the lack of
74)
50
Case Study: Carrefour
aggressiveness, but they were much more flexible than their Western
and at first used Taiwanese negotiators for its suppliers in China. (p. C
80)
o Since 2002 a new organization within the group has aimed to expand
market outlets for its suppliers and enhance its product offering in its
with rival Promodes, the number two in the French market. (p. C 74)
between Majid al Futtaim and Carrefour was the most dynamic and
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Case Study: Carrefour
C 74)
o Wal-Mart had coveted the French market for years but its attempts to
buy a French subsidiary had been stymied since its abortive courtship
GNX online supply platform with Oracle and Sears, whereby suppliers
and retailers can exchange information via the Internet and optimize
76)
expertise and experience and the local executives sharing their know-
o When first moving into Asia, Carrefour opted for joint ventures and
52
Case Study: Carrefour
and at first used Taiwanese negotiators for its suppliers in China. (p. C
80)
o Its relationship with Lianhua, one of the two major local retailers,
53
Case Study: Carrefour
CAPABILITIES
o Thanks to its massive buying power, Carrefour could guarantee low prices while
o Carrefour has built big global procurement centers coordinated through Shanghai
customers that they will be refunded if they find the same product cheaper
o In some markets, such as China, Carrefour has launched its own product line in
54
Case Study: Carrefour
o In order to increase its profitability, in 2000 Carrefour created the GNX online
supply platform with Oracle and Sears, whereby suppliers and retailers can
exchange information via the Internet and optimize the flow of merchandise, thus
local communities, while cooperating closely with local authorities. (p. C 81)
first used Taiwanese negotiators for its suppliers in China. (p. C 80)
o Since 2002 a new organization within the group has aimed to expand market
outlets for its suppliers and enhance its product offering in its European stores. (p.
C 81)
o In order to fight back against the hard-discounters, Carrefour expanded its own
o Carrefour is one of the world’s major exporters of Chinese products. (p. C 81)
o Taking local constraints into account, Carrefour has added new services in
developing markets, such as free shuttle services for customers and play areas for
supermarkets, hard discounts and other formats, such as convenience stores. (p. C
73)
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Case Study: Carrefour
o For years its claim to fame was to offer a massive array of quality goods in one
o The fresh product concept was redesigned in order to reproduce the atmosphere
o It built a reputation as the retailer that offered the most variety and freshness at
o When first moving into Asia, Carrefour opted for joint ventures and partnerships
to make up for its lack of knowledge of the Asian market. (p. C 77)
o Its relationship with Lianhua, one of the two major local retailers, helped
o An “export service” was established in Shanghai, and 10 liaison offices were set
o From 2000 to 2003 Carrefour wrestled with integrating Promodes’ businesses into
o Before entering a new international market, local conditions are analyzed against
o However, Carrefour does not believe only in extensive market research[.] (p. C
75)
o One important factor in cost management is its sourcing strategy. (p. C 76)
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Case Study: Carrefour
campaigns, Carrefour, No. 5 in food retail, adapted well to the local economic
o Despite such differences, thanks to its adaptive capabilities Carrefour became the
o Carrefour’s aim had always been to pioneer urban centers that had been ignored
and experience and the local executives sharing their know-how of the local
o Shared processes and systems increase operational efficiency and the introduction
76)
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Case Study: Carrefour
Department heads earn 20 percent more than they would with other supermarkets,
and can earn a bonus linked to the results of the department. (p. C 76)
COMPETENCIES
o Thanks to its massive buying power, Carrefour could guarantee low prices while
o Carrefour has built big global procurement centers coordinated through Shanghai
customers that they will be refunded if they find the same product cheaper
o In some markets, such as China, Carrefour has launched its own product line in
o In order to increase its profitability, in 2000 Carrefour created the GNX online
supply platform with Oracle and Sears, whereby suppliers and retailers can
exchange information via the Internet and optimize the flow of merchandise, thus
58
Case Study: Carrefour
o Since 2002 a new organization within the group has aimed to expand market
outlets for its suppliers and enhance its product offering in its European stores. (p.
C 81)
o In order to fight back against the hard-discounters, Carrefour expanded its own
o Carrefour is one of the world’s major exporters of Chinese products. (p. C 81)
o Taking local constraints into account, Carrefour has added new services in
developing markets, such as free shuttle services for customers and play areas for
supermarkets, hard discounts and other formats, such as convenience stores. (p. C
73)
o The fresh product concept was redesigned in order to reproduce the atmosphere
o It built a reputation as the retailer that offered the most variety and freshness at
o When first moving into Asia, Carrefour opted for joint ventures and partnerships
to make up for its lack of knowledge of the Asian market. (p. C 77)
o An “export service” was established in Shanghai, and 10 liaison offices were set
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Case Study: Carrefour
o From 2000 to 2003 Carrefour wrestled with integrating Promodes’ businesses into
o Before entering a new international market, local conditions are analyzed against
o However, Carrefour does not believe only in extensive market research[.] (p. C
75)
o One important factor in cost management is its sourcing strategy. (p. C 76)
campaigns, Carrefour, No. 5 in food retail, adapted well to the local economic
o Despite such differences, thanks to its adaptive capabilities Carrefour became the
60
Case Study: Carrefour
and experience and the local executives sharing their know-how of the local
o Shared processes and systems increase operational efficiency and the introduction
76)
Department heads earn 20 percent more than they would with other supermarkets,
and can earn a bonus linked to the results of the department. (p. C 76)
o Carrefour is able to adapt its business model to new regions, cultures, and
Taking local constraints into account, Carrefour has added new services in
developing markets, such as free shuttle services for customers and play areas
When first moving into Asia, Carrefour opted for joint ventures and
partnerships to make up for its lack of knowledge of the Asian market. (p. C
77)
61
Case Study: Carrefour
In order to increase its profitability, in 2000 Carrefour created the GNX online
supply platform with Oracle and Sears, whereby suppliers and retailers can
exchange information via the Internet and optimize the flow of merchandise,
When first moving into Asia, Carrefour opted for joint ventures and
partnerships to make up for its lack of knowledge of the Asian market. (p. C
77)
expertise and experience and the local executives sharing their know-how of
Thanks to its massive buying power, Carrefour could guarantee low prices
62
Case Study: Carrefour
customers that they will be refunded if they find the same product cheaper
In order to increase its profitability, in 2000 Carrefour created the GNX online
supply platform with Oracle and Sears, whereby suppliers and retailers can
exchange information via the Internet and optimize the flow of merchandise,
One important factor in cost management is its sourcing strategy. (p. C 76)
Department heads earn 20 percent more than they would with other
supermarkets, and can earn a bonus linked to the results of the department. (p.
C 76)
o PRIMARY ACTIVITIES
INBOUND LOGISTICS
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Case Study: Carrefour
able to acquire goods at costs lower than its competitors. Carrefour has
OPERATIONS
has also worked with suppliers to reduce the amount of packaging used in
stock, track, package, and deliver its products. Benefits of the use of
emerging technologies can also come in the form of reduced wear and tear
OUTBOUND LOGISTICS
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Case Study: Carrefour
Carrefour is able to drive down its costs, and thus improve profitability,
This part of the value chain helps Carrefour to push its goods to market.
should continue to invest in and develop its marketing and sales force.
SERVICE
65
Case Study: Carrefour
its competitors and help to maintain customer loyalty even when Carrefour
o SUPPORT ACTIVITIES
PROCUREMENT
Carrefour has seen rapid expansion in recent years and has opted to
purchase land and buildings in some cases, while opting to lease land and
capital. Political instability in some regions may increase risk, but this
risk can be reduced through the proper selections of lease and ownership.
TECHNOLOGICAL DEVELOPMENT
The bottom line for Carrefour already benefits through the use of certain
66
Case Study: Carrefour
The success of a firm is highly dependent on its ability to attract and retain
Carrefour pays its employees as much as twenty percent more than its
competitors do. Although this helps to acquire the top talent, it can be
pay its associates more than its competitors, but at lower levels, so it can
FIRM INFRASTRUCTURE
Because Carrefour operates globally, the issues that it faces while trying to
operate its business are highly diverse. Because of this global diversity, it
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Case Study: Carrefour
OUTSOURCING
activities as needed, while Carrefour becomes more familiar with new and
COMPETITOR ANALYSIS
o METRO
Operates in 29 countries.
o ITO-YOKADO
Operates in 22 countries.
o TESCO
Operates in 12 countries.
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Case Study: Carrefour
o AEON
Operates in 10 countries.
o COSTCO
Operates in 7 countries.
o WAL-MART
Operates in 11 countries.
o DAIEI
Operates in 3 countries.
o LOCAL COMPETITION
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Case Study: Carrefour
HYPERMARKET
o TARGET CUSTOMER
Customers who wish to purchase all of their domestic goods in one stop, while
paying low prices for quality goods. Target customers are not those who seek
high levels of quality, or are willing to pay a premium based on brand names.
Satisfies the need for consumers to spend less time shopping while acquiring
Provides low to mid-level quality products for those who are not interested in
Low cost. Many of the goods carried in hypermarkets are also carried by
SUPERMARKET
o TARGET CUSTOMER
Customers who wish to make less frequent visits to stores in order to stock up
and mothers who do most of the grocery shopping and take on most
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Case Study: Carrefour
goods under one roof, effectively eliminating the need to shop several
Low cost. Many of the household goods that are carried in one supermarket
small amount of differentiation regarding the types of goods offered and the
HARD DISCOUNTS
o TARGET CUSTOMER
Customers who are interested in the highest level of savings. These customers
are willing to make the trade-off between price and quantity. These customers
Allows customers to save money on items that have a long shelf life and items
Low cost. Customers who shop hard discount stores are looking for the
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Case Study: Carrefour
o TARGET CUSTOMER
company. These shuttle services are not generally offered by most retailers.
o TARGET CUSTOMER
Stay-at-home mothers, fathers, and other care providers who cannot afford to
Allows customers to shop without the stress associated with shopping with
and where they can shop, given the constraints of their childcare duties.
increase costs to the firm. These services are intended to set Carrefour apart
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Case Study: Carrefour
HOME DELIVERY
o TARGET CUSTOMER
Busy professionals and people who are not mobile enough to perform
Allows busy professionals to order goods remotely so that they can focus
more on work. Also, allows handicapped and elderly people access to a wide
Differentiation. Like other services, home delivery only adds to the costs of
CULTURAL CENTER
o TARGET CUSTOMER
Allows women and children to further their education every time they venture
drawing, among other subjects, helps to set Carrefour apart from its
competitors. It certainly does not help to lower costs for the firm.
FREE CREDIT
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Case Study: Carrefour
o TARGET CUSTOMER
without charging interest only adds costs to the bottom line. It does serve to
set Carrefour apart from competitors who are not offering similar services.
THEMED CORNER
o TARGET CUSTOMER
products that they have not been exposed to before. These products are
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Case Study: Carrefour
dominant business, the hypermarket, accounts for 57.6% of their overall sales. Other
formats, such as supermarkets, hard discounts, and other stores all share product,
expand.
o ECONOMIES OF SCOPE
SHARING ACTIVITIES
to create value. Goods destined for all different formats can be housed in
human resources can be shared on local and global bases across many
those described above, when shared among closely related businesses, can
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Case Study: Carrefour
knowledge of this success or failure across all business units at little cost
MARKET POWER
VERTICAL INTEGRATION
avoiding some market costs, and possibly improve the quality of its
FINANCIAL ECONOMIES
capital at its disposal, and should only seek to borrow from creditors
LOW PERFORMANCE
76
Case Study: Carrefour
should continue to branch out into new markets and pursue new
domestic markets.
globe are just beginning to mature, and many remain untapped. Until
SYNERGY
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Case Study: Carrefour
o TRANSNATIONAL STRATEGY
In Asian markets, Carrefour has sought to achieve both global efficiency and
local responsiveness. They have had to hold costs down due to the growing
number of global competitors they face, but they also have had to meet the
demands of a highly diverse set of cultures, buying habits, and tastes. Its
o ENTRY MODE
market, it then rapidly expands its operations through the development of new
involved with greenfield ventures, with the lower returns associated with
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Case Study: Carrefour
strategic alliances. Because this approach has proven successful in the past, I
CONCLUSION
Their strategies have proven successful for a number of reasons. First, they have been
able to successfully transfer competencies to associates and managers across the globe.
Also, they have been able to adapt to local cultures and consumer tastes as necessary. In
some cases, they have even managed to change consumer tastes and buying habits. They
have succeeded in entering new markets aggressively and gaining a large share of each
market. Carrefour has even been able to restructure when legalities made it necessary.
The question remains, then, what should Carrefour do in the future. Carrefour
should remain in the retail industry. It should continue those practices that have proven
successful and profitable in the past. Also, Carrefour should continue to leverage its
knowledge of international markets to continue its rapid expansion across the globe.
Carrefour should, however, be wary of threats to its operations, and remain vigilant in
exploring new ways to improve its products and services. Carrefour has come this far
based on its ability to pioneer new retail concepts and should remember that this
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Case Study: Carrefour
References
Gehlen, C., Jones, N., & Lasserre, P. (2005). Carrefour in Asia. INSEAD.
Globalization (Concepts and Cases). (8th ed.) Mason, OH: Thomson Higher
Education.
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