Carrefour’s Global Reach:

A case Study of Its Strategy

Presented By:
GROUP 4
Introduction

 In 1959, Carrefour was founded by three businessmen: Marcel Fournier,

Louis Defforey and his son, Denis Defforey in Savoie, the South-Eastern
part of France.
 Carrefour pioneered in the establishment of hypermarket, which are
supermarkets with huge dimensions in terms of space.
 Carrefour has expanded steadily since 1969. Now, it serves over 2 billion
clients per year in its more than 9,000 stores, which are present in 32
countries across 3 geographic zones.
 Carrefour’s strategy is much about global reach, and Carrefour has become
the second largest retailer worldwide till now.
 The brand “Carrefour” means “It is convenient to fetch it there.”
Carrefour’s Organizational Development
 Organizational development is a long-term effort, led and supported by top
management
 Applied an ongoing collaborative management of organization culture
 Special emphasis on the culture of intact work teams and other team
configurations
 It was a private company from 1959 to 1970 and share of the company was
intensely held by the family members
 Carrefour decided to go public in 1970, introducing 20% shares in the stock
market
 It developed and enlarged from family organizational form to professional
management form, the owner of Carrefour recruited professional managers
 In 1997, Carrefour declared to transform itself to be “Carrefour S.A.”, an
incorporated company in legal provision
 Letting professional managers go into top management and making
decisions
Carrefour’s Strategy

 FRENCH INNOVATION

On June 15 of 1963, Carrefour opened a shop that the French had ever seen
before. The surface of the shop was 2,500m2, and it had 400 parking spaces
as well. The shop was located at southern suburbs of Paris.

It was bigger than traditional supermarkets.

More than 15,000 kinds of goods were available for customers to choose.
They adopted the strategy of Low Margin.
 TRIPLE INNOVATION

After the success of French Innovation, Carrefour continues to step into his
expansion strategies.

Triple strategy means internal growth, cooperation and franchising.

Strategy of internal growth includes business level strategy and corporate
level strategy.

Strategy of cooperation says that a high degree of commercial operation

results from a high market concentration.

In order to increase its market share and reduce perceived risk, Carrefour
started cooperating with his competitors by joint venture in France.
Applied strategy of franchising, a contractual arrangement in which a
franchisee owns and operates a business employing the franchiser’s brand
name.
 CARREFOUR’S CHALLENGE FROM AMERICA

Carrefour has invested outside France since 1969, and the first country that it expands
abroad is Belgium. Since then they expanded steadily.

Carrefour is 1st in Europe and the 2nd retailer in the world. With a presence in 32
countries it makes of its sales outside France. This makes it the most international of
all food retailers. Mainly concentrated on 3 continents: Latin America, Europe and
Asia.

America is one of the most important markets of the world. However, Carrefour
failed in America in 1993.they gave up its investment in America and never come
back there up to now.

It also failed in Hong-Kong in 2000 during its global reach.

Moreover, the most difficult global reach of Carrefour is confronted by Wal-Mart’s

challenge.

Today, Wal-Mart has ambition to step into his global expansion, and gradually this
will threaten Carrefour’s global reach. Recently, they meet and compete with each
other in South America (mainly in Brazil) and Asia (mainly in China and Japan).
Conclusion

Through the analysis of the case study of Carrefour, we have learned much
more successful experience from its development process. However, in over
30 years of global reach, Carrefour has been confronted also with great
challenges. In Brazil, China, and Japan, Carrefour has encountered (and still
is encountering) many problems, and it also failed in the U.S. and Hong
Kong markets. With its strategies, however, Carrefour has finally has
solved these problems and maintained an outstanding position within the
retail business until now
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