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A French international hypermarket chain Headquartered in Levallois-Perret-France 11,000 stores More than 32 countries and areas Over 495,000 employees (2009) Sales: 112.245 billion euro in 2010 4 store formats - Hypermarkets - Supermarkets - Convenience - Cash&carry
The Carrefourcompany is created by:- Marcel Fournier- Denis Defforey- Jacques Defforey
•Carrefour opensits firstsupermarket inAnnecy,Haute-Savoie• Promodes iscreated by amerger
Carrefourinvent a new store concept: theHypermarket
•Carrefourintroduces“produits libres” -unbrandedproducts but“just as goodand cheaper”• Carrefour getslisted on theParis stockexchange
Carrefour group adopted a new governance structure with leading to a more fluid and effective operation ableto respond with greater speed.
1969- the first overseas hypermarket was built in Belgium. 1973- hypermarket in Spain 1975- hypermarket in Brazil 1982- hypermarket in Argentina 1989- first hypermarket in Asia, in Taiwan 1990- first hypermarket in Philadelphia,United States 1991- second hypermarket in New Jersey 1993- first hypermarkets in Italy and Turkey. 1994- first hypermarkets in Mexico and Malaysia 1995- first hypermarket in China mainland 1996- hypermarkets in Thailand, Korea, and Hong Kong
Lars Olofsson CEO and Chairman of Carrefour Pierre-Jean SIVIGNON, Chief Financial Officer José Carlos Noël PRIOUX, Thierry GARNIER, Eric LEGROS, GONZALEZ-Executive Director Executive Director Executive Director HURTADO, Chief France China and Taïwan Group Merchandise Commercial Officer
Year Revenues Profit2008 89 billion Euros 382 million Euros2009 87.2 billion Euros 385 million Euros2010 87 billion Euros 1.87 billion Euros
Primarily a hypermarket, but also operates supermarkets, hard discounts, convenience stores No. 1 retailer in Europe and China in terms of size Reputation of variety, freshness and low price
Barriers to entry :1) Product differentiation –All consumer goods under one roof2) Economies of scale -Operates 10,378 stores in 29 countries3) Switching Costs - Promotions, discounts, partnerships, credit program increase switching costs for consumers, suppliers, and partners alike4) Access to Distribution Channels – Very difficult for new entrants to get access to new channels Expected Retaliation - Vigorous retaliation can be expected when the existing firm has a major stake in the industry, when it has substantial resources, and when industry growth is slow or constrained
Supplier groups are less concentrated Many substitutes available to the firm Retail giants important for supplier groups Minimum threat of forward integration from suppliers
Buyer’s are very important to the retail industry But no single buyer purchases enough to impact the industry Important to know buyer’s taste and preferences Special promotions and discount decrease buyer’s power
This depends on region or country of operation Generally low – promotion and services increases switching costs – tailoring to local needs Culture dependent – Mom and Pop store more popular in Asian countries
Numerous or equally balanced players Rapid Industry Growth Storage Costs and Fixed Costs High Strategic Stakes High Exit Barriers
A hit with customers: One-stop shopping Extremely low prices Full range of choices High quality of productsFrom a business perspective: Seamless capture of international markets Resource integration High level of local sourcing
Hypermarket – Less cost, more variety of products, low to mid level quality Supermarket – Low cost, one stop shop for household’s needs Hard Discounts – Lowest cost, products with high shelf life and bulk buying Free Shuttle Services – Differentiation, increasing the reach of products Child Play Areas, Home Delivery, Cultural Center, Free Credit, Themed Corners
Value Creating Diversification ◦ Economies of scope: Sharing Activities Transferring Core Competencies Market Power – Vertical Integration Financial Economies – Efficient Internal Capital Market Allocation Value Neutral Diversification – Low performance, Uncertain Cash Flow, Synergy International Level Corporate Strategy ◦ Transnational Strategy – Global efficiency and local responsiveness. Combination of multi-domestic and global strategy. ◦ Entry Mode – Initially Strategic Alliance, later on wholly owned subsidiaries
1) Largest hypermarket chain in 1) High operating expensesterms of size 2) Weak positioning in Asia and2) Second highest revenues middle east3) Joint ventures in various 3) Expansion plans taking toocountries much time4) Strong private label 4) Poor E-commerce performance SWOT 1) Walmart’s low prices biggest1) Joint ventures and acquisition threatfor more expansion 2) New players/ Local players in2)Discount stores development the industry3) Improve sale performance 3) Less knowledge of Asian countries4) R&D in marketing 4) Slow expansion outside France
In China ◦ Govt. has stopped preferential treatment ◦ Rental prices high in Tier I cities ◦ Expansion plans halted In Europe ◦ Fall in operating profits ◦ Non food spending down by 10% ◦ Overall sales down by 4.4%
Continue the practices that have been successful Leverage knowledge of international market and expand into emerging economies Find innovative ways to improve products and services Be vigilant about threats to its operations