Carrefour Case Study

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Introduction
Carrefour’s major markets include France, Spain, Greece, Portugal, Brazil, Argentina, Taiwan, Mexico, and Asia. The company operates its stores under 17 banners, including hypermarkets (Carrefour), supermarkets (Champion, GB, GS, Norte),convenience stores (8 á Huit, SHOPI, Marché Plus), hard discount stores (Dia%, Ed), cash-and-carry stores (Promocash), mini markets (PROXi) and food service stores (Prodirest). Other banners of the company include Puntocash, docks MARKET and an online store. SWOT analysis

Since 2004, Carrefour has been in a re-launching process, because of a growing competition both on a worldwide level and in many specific country markets. The SWOT analysis for the group includes; Strength

* Market leader
Carrefour is the largest retailer in Europe and the second largest retailer in the world. It is also the largest super-market chain in Europe. The company operates primarily in three formats namely hypermarkets, supermarkets and hard discount stores. The company’s 6546 stores include 794 hypermarkets, 1495 supermarkets and 3888 hard discount stores besides 194 convenience stores, 175 cash and carry stores along with some mini markets and food service stores. Carrefour’s leadership position in its three primary store formats helps the company maintain an advantage in the competitive retail scenario. * Aggressive marketing and adaptable business model

Carrefour concentrates on sustainable local development by means of providing professional training to its workforce to cater to the local market. Its retail formats are easily adaptable in its various markets. The company has time and again displayed its ability to adjust its retail formats to suit the dynamics in a particular market, and this, coupled with its aggressive marketing ability, has helped the company grow in new markets.

* Brand recognition
Product positioning is thoroughly planned in each of Carrefour’s stores and this has ensured good brand recognition in all markets in which it operates. Carrefour operates its stores under 17 banners, including hypermarkets (Carrefour), supermarkets (Champion, GB, GS, Norte), convenience stores (8 á Huit, SHOPI, Marché Plus), hard discount stores (Dia%, Ed), cash-and-carry stores (Promocash), mini markets (PROXi) and food service stores (Prodirest). Besides retailing the branded products of renowned suppliers in its markets, the company sells products under many of its own brands including Destination Saveurs, Firstline, Produit Carrefour, Reflets de France, Topbike, Filière Qualité Carrefour, Carrefour Bio, GB Bio, TEX, Souvenirs du Terroir, GB, GS, Escapade Gourmandes, Neufunk, Bout´chou, Cicérone and Dia%. The company can boast of 90% brand recognition rate, with its own branded products accounting for 18% of its worldwide sales. The brand salience for the company is high. * Focus on competitive prices

In each of its store formats, Carrefour maintains a strong focus on competitive pricing. In the hypermarkets segment, over three quarters of the company’s stores offer the lowest or the second lowest prices versus their local competitors. The same is true for the company’s supermarkets and discount-stores. During 2004, the company significantly reduced its prices, mainly in dry grocery products. Carrefour’s continued focus on offering competitive prices to customers has helped the company sustain its leadership position in a highly competitive industry. Increasing cash flows from operations * Increasing cash flow from operations

For fiscal year 2004, Carrefour’s cash flow from operations was E4.2 billion, an increase of 13.1% over 2003. The free cash flow for the company was E1.7 billion, 62.0% higher than 2003. The increase in operating cash flows was primarily attributable to the increase in cash generated from the change in working capital. The company’s ability to generate higher cash flows from its operations suggests increasing operational efficiency....
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