Western Europe and Metro Cash

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1. Introduction METRO GROUP is a successfully operating company which is divided into five subdivisions including Real, Media Markt, Saturn, Galeria Kaufhof and Metro/Makro Cash & Carry. The last one will be in focus of this report. Metro Cash & Carry is a self-service wholesaler which is customer-focused, international and innovative. This project will be run by six students of the Fontys University of Applied Sciences in Venlo and is aimed to develop a strategic recommendation for Metro Cash & Carry concerning of further expansion into the Eastern European countries. The countries to consider are Bulgaria, Croatia, the Czech Republic, Hungary, Moldova, Poland, Romania, Russia, Serbia, Slovakia and Ukraine. Metro Cash & Carry is a food and non-food retailer which is targeting professionals. The company operates successfully in the above mentioned countries whereby they have several stores in each of those countries. Nonetheless, the company aims to invest in one of them. This project’s goal is to give advice to the company on this topic, while taking the STEP, the DE-STEP and the Porter’s Five Forces analysis into consideration. In the following it will be described how this report will be structured to come up with a final country to invest in. This report consists out of eight chapters starting with the introduction. Then, the second chapter will introduce the METRO GROUP. This will cover the history, current situation and a SWOT-analysis including a Key-Issue-Matrix. The third chapter is aimed to present the subdivision Metro Cash & Carry, which is the focus of this report. First, a detailed industry analysis will be illustrated, followed by a company description of Metro Cash & Carry and the current trends in the Eastern European countries. The next chapter will point out the problem of this project which means that the problem will be outlined and the project aim defined. Besides, the research methodology will be explained. The fifth chapter will illustrate the STEP analysis, followed by a DE-STEP analysis in the next chapter. To be more precise, this chapter will start with an introduction, explaining how the final four countries were chosen. Then, an analysis of all four countries will be executed. The seventh chapter points out the Porter’s Five Forces analysis. Regarding to the Porter’s Five Forces analysis the final country where to expand will be chosen. The last chapter deals with the conclusion and recommendation for Metro Cash & Carry.

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2. Metro Group The following chapter will firstly describe the history of the METRO GROUP. Secondly, the current situation will be presented. Finally, the SWOT-Analysis will top off this chapter. 2.1 History In the following, the history of METRO GROUP will be presented. METRO's global retail/wholesale empire began as Metro SB-Grossmaerkte, a Cash & Carry business that German entrepreneur Otto Beisheim founded in 1964 in Muelheim. Four years later METRO joined the Dutch conglomerate SHV (Steenkolen Handelsvereniging NV) and established a company in the Netherlands operating as Makro Cash & Carry for the first time abroad. Nine western European countries became home to Metro and Makro wholesale outlets by 1972. In 1996 METRO AG is formed through a merger of the retail companies, Asko Deutsche Kaufhaus AG, Kaufhof Holding AG and Deutsche SB-Kauf AG, since then METRO AG shares are listed on the German Stock Index (DAX). The Eastern-European expansion of the company started in 1994 with the market entry in Hungary and Poland. Nowadays the METRO GROUP is present in twelve Eastern European countries, most notably in Russia since 2001. The last country which METRO entered in the region was Kazakhstan in 2008. 2.2 Current situation Currently METRO GROUP is the third largest company in its home market Germany with a market share of 11.4% (cf. Appendix 1). In addition, the company is one of the most important international retailers with stores operating in 34 countries in...
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