Case Study 1 International case: Carrefour – which way to Go? Q – 1) How should Mr. Durant assess the opportunities in various countries around the world? Ans
To become a global firm, ideally, company should be taking gains of R&D, production, marketing and financial advantages in its costs and reputation that are not available purely to domestic competitors. It minimizes importance of national boundaries and develops “transitional” brands. It raises capital, obtains materials and components, and manufactures and markets its goods wherever it can do the best job. To access opportunities around the world, Mr. Durant should answer some basic questions like (1) What market position should we try to establish in our country, in our economic region and globally? (2) Who will be our global competitors be and what are their strategies and resources? (3) Where should we produce or source our products?
(4) What strategic alliances should we form with other around the world? Following are the six major international marketing decisions which Mr. Durant should go through while accessing opportunities in various countries around the world. Looking at the global market
Deciding whether to go Global or Not?
Deciding which markets to enter
Deciding how to enter the market
Deciding on the global marketing program
Deciding on the global marketing organization
Mr. Durant need to identifies the developing countries where hyper malls structure has just began and then need to check whether their government rules and regulations pertaining to retail hyper malls. After deciding the country, Mr. Durant need to check the demand supply gap in that market and try to reduce the supply chain gap, so that their cost of purchase becomes less and in the similar fashion they can offer good discounts to their customers. Also if the demand supply gap is more because of their global presence, Mr. Durant can import the products from the other countries also which in turn reduces cost of purchase and can easily pass on that benefit to end users in that countries. Q-2) Should Carrefour adopt Wal-Mart’s strategy of “Low prices Everyday”? What should be advantages or disadvantages of such a strategy? Yes, Carrefour should adopt Wal-Mart’s strategy of “Low Prices Everyday”. Major chunk of Retail Market is formed of middle class consumers and mentality of middle or lower middle class people in the entire world is to save their daily expenses. Carrefour should adopt this strategy because it will attract more middle class consumers which will generate the volume of the sales. They should start new strategy for giving atleast 2% of discount in any of its products purchased from their mall. The advantages would be volume of sales would be increased; brand recall would be easy, competition increases, consumer benefit will be increased but the disadvantages would be company would be making less profit , product penetration will happen, so companies producing niche products would not like to sell products through such retail chains, loyalty of the customer would be reduced eg: customer will go for products where they will get it cheaper. Q-3) How should Carrefour should differentiate it from Wal-Mart? Wal-Mart’s setup is like big hyper mall in suburbs of the city in any countries. In order to compete Wal-Mart in the countries where they have strong presence, they should start number of small super markets across the city depending upon geography. In those super markets, they should give daily discount to customers on all products which would create a different BRAND RECALL compared to Wal-Mart. For example, Carrefour should start branding as “Consumers can use fresh vegetables daily as their presence is in every colony of city”. At latter stage, Carrefour should start giving home delivery for any of the products on chargeable basis to small amount of purchase and on free on bigger amount of purchases. Q-4) Identify cultures in selected...
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