A Comparative Study of Asia Strategy: Wal-Mart Versus Carrefour

Topics: Management, Retailing, Supply chain management Pages: 13 (3853 words) Published: March 16, 2013
A Comparative Study of Asia Strategy: Wal-Mart versus Carrefour

Miao-Que Lin Fu Jen Catholic University, China.

Wen-Kuei Liang Tatung University, China.

Wal-Mart, the number one retailer in the world, persistently maintain three fundamental beliefs—respect everyone, total-solution service, and in search of highest quality—to shape their unique corporate culture. They insist lowest price every day, carry out total solution services, effectively control the cost of global logistics, fully leverage information technology to become e-company, powerfully motivate employees to work and share knowledge and adopt a play-safe strategy in internationalization. As for the number two player—Carrefour, they provide customers with one-stop shopping, lowest price, fresh products, self-served shopping in a hypermarket with free parking lots. In contrast to Wal-Mart’s internationalization strategy, Carrefour expands to foreign markets faster and more flexible than their counterpart. This study investigates the configuration in Asia, marketing service, product procurement, logistics management, digitalization and human resource management of Wal-Mart and Carrefour. The authors then propose strategic implications for global retailers to increase their management effectiveness and efficiency.

Wal-Mart founded by Sam Walton adopted circumventing strategy by starting her operations in small towns and then expanding to bigger cities. She maintains lowest price everyday and promises customer satisfaction together with high quality suppliers’ cooperation and prompt delivery to grow continuously at marked rates. Public offering begun in 1970, Wal-Mart then extended operation around the States and further expanded across borders. She has branches in Canada, Mexico, Brazil, Argentina, Porto-Rico, UK, Germany, South Korea and Mainland China. Currently, she employs more than 1.3 million staff. In 2001, her sales reached more than 217 billions and won the title of biggest enterprise in the globe. On the other hand, Carrefour initiated the idea of “hyper-market” in 1959 that stressed mass-sales, low


delivery cost and discount everyday to achieve high rotation. Other key success factors include one-stop shopping, low selling price, freshness, self- service and free parking. She started public offering in 1970, acquired 45 shops in Europe in 1991, and merger with Promodes in 1999. At last, she had 9,225 stores and more than 340 thousand employees. The sales reached 78 billions and made her as the largest retailer in Europe and the 2nd largest in the world. As for their operations in Asia, Wal-Mart had established her footholds in Thailand, South Korea, and China. By contrast, Carrefour had extended her services to Taiwan, Malaysia, China, Hong-Kong, South Korea, Singapore, and Indonesia. Compared with westerns, Asia customers tend to buy impulsively rather than as planned and concern more price than package. This study focuses on the comparisons of Asia strategies of Wal-Mart and Carrefour to serve as management references to other retailers.

Configuration in Asia Accompanied by the increase of purchasing power in Asia since 1980, both traditional supermarkets and department stores were not be able to meet the requirements of one-stop shopping and shopping as leisure. Consequently, huge mass retailers emerged by providing customers with buying large quantity at low cost and one-stop shopping. Makro from the Netherlands first entered Taiwan and quickly captured more than 30% market share in 1989. Then Carrefour established a joint venture with Presidential Enterprise Corporation in Taiwan followed Makro’s path by providing free parking, fresh and full range products at low price to customers. Carrefour started her operation in big cities and knew the purchasing power there. Owing to the restriction of setting-up of mass retailers in France, Carrefour was forced to go overseas and built her first store in...
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