Carrefour Case Study

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EXTERNAL ENVIRONMENT

• Demographic:

| |China |Japan |Malaysia | |Carrefour |29 |84,000 |50 | |Metro |22 |46,900 |45 | |Ito-Yokado |12 |27,238 |41 | |Tesco |11 |39,521 |18 | |Aeon |10 |24,677 |17 | |Castco |7 |37,993 |16 | |Wal-Mart |11 |205,500 |16 | |Daiei |3 |17,717 |1 |

Carrefour International Approach:

The basics of Carrefour’s concept are (1) one-stop shopping, (2) low prices, (3) self-services, (4) quality products, (5) freshness, and (6) free parking.

Carrefour analyzes the socio-economic criteria conditions of a new international market before entering it. The size and maturity of the market, the legal framework and the openness to foreign investors are major aspects. For instance, Carrefour postponed its entry into India due to a lack of clarity on direct foreign investment. Basic figures regarding population, per capita GDP, transport networks, the level of motorization, urbanization, real estate prices, and so forth are also taken into account.

Carrefour International Strategies:

Sales growth, cost reductions and improved cash management: with these three priorities, Carrefour posted significantly higher results and offered consumers the best prices and widest selection.

By implementing a vigorous price offensive, Carrefour enhanced its customers’ freedom of choice. Customers were able to benefit from diversified store formats, shelves with better and more readable signage, low-priced products, and international brand-name products. At the same time, Carrefour competitiveness was driven by its size and increased internal synergies.

This strategy relies on a human resources policy that is designed to diffuse procedures and tools and to bring to life the Group’s value system among its 420,000 employees so that they share a common culture and enhance the organization’s ability to react. It is part of a sustainable development strategy designed to make the Group a benchmark for responsible commerce that improves the well-being of consumers in a respected environment.

1. AN AGGRESSIVE PRICING POLICY: Carrefour uses this competitive hard discount strategy to build a new consumer order in which customers expect both basic and sophisticated products, and regional and top international products that combine the best prices and consistently high quality.

2. AN OFFER BASED ON OPTIMIZING COSTS AND SUPPLIES: This discount positioning is based on a policy of ongoing cuts in distribution costs, through local as well as global initiatives. Locally, the systematic use of methods to optimize costs, and the search for profitability within each department by every store are bearing fruit. Globally, the aggregation of purchasing, international negotiations, logistics synergies and an increase in the proportion of controlled products within product lines offer customers the best prices and choice.

3. DISCOUNT: A WIN-WIN STRATEGY: Carrefour studies on their global markets have shown that discounts and price reductions can lead to quadrupled sales by volume and tripled sales revenues.

4. THE...
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