Introduction of the Case:
Carrefour was the second largest retailer of consumer goods and groceries worldwide,after Wal-mart. The company pioneered the concept of hypermarket in their homecountry, France, as early as 1960’s.However, towards late 1990’s; Carrefour saw a de-cline in their French hypermarkets owing to certain unfavorable government regula-tions and competition from hard discount stores. Carrefour introduced a series of strategic initiatives in an effort to revamp the ailing French hypermarkets. As a result,French hypermarkets started showing signs of recovery towards late 2004. The casediscusses about the emergence and growth of hard discount stores in France. This casealso provides scope for discussion of decline of Carrefour’s French hypermarkets and itsrevamp strategies. Pedagogical Objectives:
The state of Hard discount stores in France
Impact of government regulations on French retail industry
Growth of Carrefour’s hypermarkets in France
Revamp strategies of Carrefour hypermarkets in France.
1. How should Mr. Durant assess the opportunities in various countries around the world? Mr. Durant, the new CEO since 2005, embarked on the new strategy by offering 15percent new products in its hypermarkets and 10 percent in its supermarkets. Moreover,he wants to employ more staff, extend the operating hours in certain hypermarkets,cutting prices, trying small stores, and pushing down decision making. Mr. Durant aims tostay only in countries where Carrefour is among the top retailers. 2. Should Carrefour adopt Wal-Mart's strategy of "low prices everyday"? Whatwould be the advantage or disadvantage of such a strategy? Yes Certainly they have to adopt the strategy of low pricing every day, In France, whereCarrefour is well established, the company made the big mistake in its pricing policy. Itprobably started with the 1999 merger with Promodes, the French discount chain.Carrefour confused the French clientele by losing its low-cost image. The new strategy which they want to implement discounts and cutting prices ,trying small stores certainly will help Carrefour to keep their competition in all over the world.
3. How could Carrefour differentiate itself from Wal-Mart?
Wal-Mart is more than just the world's largest retailer. It is an economic force, a culturalphenomenon and a lightning rod for controversy. It all started with a simple philosophyfrom founder Sam Walton: Offer shoppers lower prices than they get anywhere else. Thatbasic strategy has shaped Wal-Mart's culture and driven the company's growth. Now that Wal-Mart is so huge, it has unprecedented power to shape labor markets global-ly and change the way entire industries operate. In this article, you will learn the key rea-sons that Wal-Mart has been able tokeep its prices low -- cutting-edge technology, a frugal corporate culture and a push tomake suppliers sell merchandise at cheaper and cheaper prices. We'll also take a look atthe scope of Wal-Mart's impact on the economy and the controversies surrounding Wal-Mart, as well as the future of the company.With 12 million loyalty card-holders in France, but also 7.5 million in Spain, for example,Carrefour groupstores have an excellent base from which to forge closer relationships with customers. Asa multi-formatretailer, Carrefour can offer solutions addressing a wide variety of shopping habits. In2009, the Carrefour group is enhancing its knowledge of customers, with the aim of serving them better and improving its brand image. In stores, the Carrefour brand will beconveyed in a way that is closer to the customer and more emotionally involving. Bybeing more competitive, the brand will again become a tool for winning customers,enhancing customer loyalty and distinguishing Carrefour from the pack. In towns andvillages, as convergence accelerates, the Carrefour brand will provide its best stores tomore customers. In this way, Carrefour will make customers want to come, and...
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