Contemporary Business Issues II WEEK 12 CARREFOUR
Carrefour is a french company that, because of its internationalization's strategy, is now the second largest retailer in the world (following Wal. Mart) and the largest in Europe. But, Why does Carrefour choose one or another country? Why is Carrefour format succesful around the world?
Carrefour expressed, in its official website that "The Carrefour group has an only ambition: making Carrefour the preferred retailer wherever it operates" and this ambition is support in three strategies: "Client-oriented culture, transformation and innovation" (Carrefour, 2009). However, these global strategies aren't enough in international operations, then, The group defined other important aspects for operating in global markets.
Carrefour According to Daniels (2004) there are some key factors for evaluation and selection of a country for international operations: Market size, ease and compatibility of operations, Cost and resources availability and economic, politic, monetary and financial risk.
Carrefour Analysis of these factors enables companies to have a perspective of the country and consequently, companies may choose the way of entry in that market. In Carrefour's case, ease and compatibility of operations, especially geographical proximity, was the main point in international expansion: Choice of Belgium, Italy and Spain (with France are G 4) as the first markets to entry and the importance of these countries today, becuase of the number of stores, workforce and sales; are clear examples of this. For example, in 2007 Carrefour Spain has 161 Hypermarkets, 87 Supermarkets, 3 Convenience Stores and 2, 912 Hard Discount stores where there were 72, 282 employees and sales by 14, 749 million euros (Carrefour, 2008).
Carrefour However, Carrefour is not concentrated only in these countries. Instead Carrefour is present in many other countries, especially in Europe, South America and China that is the most important growth market. But operations in markets where differences in culture and tastes are very high is more complicated than in closer markets. For this reason, "another factor influencing Carrefour's choice of country has been the ability to find a viable partner familiar with local operating needs its own management learned local operations sufficiently"
Carrefour As Jean-Luc Chéreau, CEO of Carrefour China, mentioned in a interview "Legal considerations are not the primary reason we have local partners. We felt that to enter so difficult and complex market- a huge market- we would need a local partner to understand market and move faster" (Child, 2006). This is a very important aspect because it means the opportunity of a more sucessfull acces into local markets and gives Carrefour more trust in operations.
Carrefour Finally, adaptation is important because it allows the company to make appropiate decisions about "Store format", the fourth key strategy. Currently, Main Carrefour's formats are: Hypermarkets, supermarkets and convenience stores, besides they have hard discount and cash-and-carry stores. Store format changes from a country to another following consumers' preferences.