CARREFOURFinding Retail Space In All The Right Places.

LOVELY PROFESSIONAL UNIVERSITY MBA-Q1529

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AGENDA Introduction History Growth/Expansion Failure SWOT Analysis Conclusion/Suggestions

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INTRODUCTION

Industry : - Multinational Retailer Headquarter : - Boulogne Billancourt, France Founded : - January 1, 1958 Age : - 57 Years Area Served : - World Wide CEO : - George Plassat Yield : - Cash & Carry, Warehouse Club,

Discount Store, Hypermarket, Supermarket

Website : - www.carrefour.com4

First store opened in 1960.

Largest retailer in Europe and Latin America, second largest in worldwide by 2007.

More than 12500 stores and 456000 employees.

Stores depend on food for 60% of their sale and rest for non food items.

Derives 52% of its sales and 48% of its profits outside France.

Operated in about twice the number of countries as the world’s largest retailer Wal-Mart

Now fourth largest retailer. 5

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GROWTH

Carrefour operated 218 hypermarket in France by 2006.

Sells underperforming stores and move from countries offering less potential profits.

Decided to expand internationally.

First foreign entity, with partnership was to Belgium.

Its wholly owned foreign store was in Spain.13

In 2006, sold its operations in South Korea and Slovakia while expanding heavily in Poland.

Announced plans in 2007 to enter the Indian and Russian markets.

Principle factor guiding Carrefour's International expansion has been countries “economic evolution”.

Carrefour growth faced some obstacles in France.

As government have restricted new hypermarket permits to safe guard town center, protect small business.

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FAILURE Carrefour has not always followed its location strategy and

deviation has influenced its failure in some markets.

Expanded into U.S and U.K in mid 1980s and later pulled out of both markets.

Entered Mexican, Japanese, Korean, and Chilean market late.

U.S customers not wanted to spend time, it takes to shop in hypermarkets.

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In U.K it did well with sales of food item but not on durables.

In Mexico, it met with established Wal-Mart.

In both Hong Kong and Chile, unable to build enough store, needed to compete with existing competitors.

Partnered with Gigante, but lacked in sufficient resources to expand rapidly and later sold whole operation.

In Japan, it established operation without partner and lasted only four year before selling out.

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STRENGTHS

Carrefour is largest hyper chain market in terms of size.

More than 50% of sales comes from France.

Large network of discount, grocery, convenience and cash and carry, hypermarkets.

WEAKNESSES

Weak position in Asian and Middle East countries.

Weakness its own brand sales.

Taking too much time in opening new stores. 19

OPPORTUNITIES

Joint ventures and acquisition for more expansion.

Reduce operating cost and

Improve sales performance.

Research in marketing area to understand the dynamics of different segment.

They can even mark their presence in e-commerce.

THREATS

Wal-Mart low prices is the biggest threat for Carrefour.

New player entering into the retail industry.

Facing difficulty to understand the dynamics of countries.

Slow expansion outside the France may allow the competitors to snatch away the market share. 20

Why would another company want to partner with Carrefour? Carrefour brings to a partnership expertise on store layout

clout in dealing with global suppliers. Example “Most Awaited Month”.

Direct e-mail link with suppliers.

Ability to export unique bargain items from one country to another.

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CONCLUSION/SUGGESTIONS It cannot become worlds largest retailer until or unless it spreads

its winds in the US and UK market.

May be expanding retail operations in too many countries and will not be able to build sufficient presence in each to gain necessary economics of scale.

This company must maintain its integrity in the market by continuing its progress with… great services extensive move in planting more companies and mergers

throughout the world providing products that are not only great quality but affordable

pricing. 22

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