Carrefour

Micro Factors

Describe a Case Study Analysis for Carrefour.

From the last four decades, we have certainly seen the French group Carrefour going across the globe and performing marvelously regarding profits, growth and loads more. They have become Europe's largest and the world's second-largest retailer which have certainly made one of the retailers to look for. The four major categories in terms of, the store and its formats: hypermarkets, supermarkets, hard discount and convenience stores.
The Carrefour group operates in more than 15,500 stores. They may be owned directly by the company or franchises.

Carrefour was founded in France in 1959. The two founders- Marcel Fournier, a textile retailer, and Louis Defforey, a wine and food wholesaler launched its first supermarket during 1960 near a crossroads (Carrefour in French) followed by the first Carrefour hypermarket during 1963. After that, the internationalization of Carrefour began with the Belgian foray during 1969 (Ki, 2008, p 14-19).
Carrefour has tasted success in almost all the parts where they have ventured and has been able to capture markets by having the stores as per the customer’s requirement. Carrefour being a large group also has done internationalization really well. And thus there consideration of venturing in UK can do wonder for them

Micro Factors

Suppliers who will be the main contributing factor are one of the things which needs to be considered while Carrefour is thinking to enter into the UK Grocery markets. This being one of the main factors because all the products which need to be sold will be supplied through this chain only. Suppliers are the ones who will provide Carrefour with all the inputs like raw material, equipment, etc.

Competitors like Walmart, TESCO, etc. which are already the established brands there will be the main rivals which will compete with Carrefour in the market and even terms of resources as well. These competitors like Walmart who are already the best departmental store in town will be giving tough competition to Carrefour.

Marketing intermediaries like wholesalers, retailers and other distributers are a major factor because this is something to important for a Carrefour like a store to consider. Mainly the inventory will be built if these networks are strong enough.

Customers who will buy from Carrefour needs to be analyzed properly as to make sure that they will accept the new chain in the city.

The Carrefour management itself needs to be considered as to see that the number of shareholders, the board of directors, etc. all in all are ready to venture in UK.

Political

Stable UK Political Environment: As far as Carrefour’s venturing in UK is concerned, political factors must be considered in order to make sure that they are able to venture well in the markets. Moreover with the past experience in the Greece, Carrefour really needs to make sure that the venturing in this sought after political environment is great.
Good Governmental support also comes in picture- if at the government wants any major retail chain to come and establish them, there should be a good government support. Thus in UK, considering the government has always been quite supportive; Carrefour should not worry much about the same. The involvement of government in regulating competition is quite good and to the minimum level- thus it is in interest of almost everybody.

Economic

Macro Factors

The Stable UK economy is one of the most important factors that should be considered while entering into the UK environment. Moreover the stability which is offered in UK is not seen anywhere else. As far as the experience in France is concerned, the same should not repeat in the UK story. Moreover the growing middle class category in the UK and also the population with high disposable income is on a rise- this makes a perfect factor for them to consider. Moreover a high degree of importance is there for the industry. As per the offices of National Statistics, 2014, in UK, the food stores have over 40% of total retail sales. The corporate tax is also quite low in UK as that in France. With a lot of potential in the UK Grocery market,
Carrefour can easily venture into it.

Social

With factors such that people have their trust and preference shifting and an increase in older population and single homes, this will be a factor to consider as working on these behaviors which are shifting. With falling confidence from other stores, a lot can be worked in here.

Technological

With new innovations in place like that of scanner guns, automatic check out in the departmental or retail stores, these factors can be implemented by Carrefour because they will be quite new and they can easily adopt these changes and make their venture quite productive and profitable

Environmental

The factors which are related to the concerns over fewer alternatives for use of energy and food wastage can be considered here. Why Carrefour should consider these? They can come up with some policies for these issues which will in turn make their position strong in the new markets.

Legal

The minimum wage policies and other labeling and food labels policies needs to be considered while venturing in the UK Markets.

The main stakeholders

The main stakeholders of all of the process will be the company, their employees, the shareholders and the society at large with all the elements in it. Thus here will all macro factors being considered, this all will have a direct impact on the stakeholders. This venturing in UK will have direct impact on the stakeholders of Carrefour because with expansion, company can have various types of fate. There is always a risk of the same and which can come on the stakeholders who will pay the ultimate price.

How UK Government policies on mergers and acquisitions can affect their growth strategies in the UK?

With the UK Government having a great profitable M& A policy, Carrefour can easily venture in UK with amazing growth strategies. The main job of any company is to consider their growth strategies first with the perfect strategic intent and analysis. The company can choose from a lot of options like whether they want to back on globalization or the skill strengthening objectives or just the profitable growth. Thus here as per UKs mergers and acquisition policy, Carrefour has to make sure that they are able to back on these factors and make their growth strategies on the same. Moreover after analyzing that which factors to consider, target sourcing and selection is important. In this developing a pool of targets by understanding the industry, leveraging on many points and identifying entry barriers will be a main task. Here is where Carrefour and their team who is making strategies should make sure that the entry level barriers are considered carefully because if they are too strict then the growth which the management is expecting might not be there. For further M& As strategies, the sector, growth, competitiveness needs to be checked in order to make sure that the company can expand in future. The policy of UK here is quite good and it lets company to diversify more and more. With all the screening criteria’s and collecting data on operational level and financial levels. It needs to be considered that:

The above factors should be seen while having an M& A.

The three stage theory of change is known as Unfreeze, Change, Freeze (or Refreeze).
If we talk about this model, the very first stage of Unfreeze means that are you ready for change. This clearly makes us understand that the type of world we live in and we needs to come out of our comfort zones. Thus here it will ensure that the employees are ready for such a major change i.e. going in UK and venturing Carrefour there. Moreover this stage also takes care of all the training required to make sure that the employees don’t have any problem in going through the new phase of change.
The next process of Change which is words of Lewin is a transitions needs to have an application of the intended change. If this application isn’t there then the whole process collapses and thus it needs to be seen that the application of the change is well in place and change stays for positive. Here Carrefour has to make sure that when the change is applied with employees staying in UK and working in a new environment, they will comfortable also to work in there.  

Kurt Lewin Change Model of Unfreeze, Change and Refreeze to prepare the staff for the envisaged UK venture

The last part of this model which is freezing or refreezing is to see that the change stays. Carrefour here can do one thing- introduce some incentives for the employees in order to make sure that they stay in UK and work according to the conditions prevailing there only.
Carrefour here should make sure that the employees who are really sincere and can pull of the job- those are only introduced to change.

Conclusion

Hence, Carrefour being such a big organizations, one of the world’s biggest have to consider a lot of factors and have to make sure that the policy which they will implement will be positive for their reputation.  Moreover, if talk about all the internal and external factors which they need to consider while they want to venture in UK, they should make sure no factor turns back because with one factor causing a problem, the whole strategy can get affected.
Also with the mergers and acquisitions in a different nation, it’s important to have your objectives in mind and mind a similar minded organization that can even fill in the loop holes you have. Lastly considering the change model, Kurt Lewin’s change model is very important in the case of Carrefour because this model explains quite well that how the staff should be trained well in advance for their venture in UK. Here in the Lewin’s model, it was also concluded that with this model being applied in Carrefour’s expansion in UK, it will help their Human Resource to adjust properly in new Business environment and new challenges.

It is very wise to recommend Carrefour that they should consider all the possibilities regarding their distribution channels, etc. before they venture in UK because even though they are one of the biggest retail chains of departmental stores, in a country like UK, all needs to be established once again.  Also keeping in the mind the economic volatility which the world is facing. Moreover I would strongly recommend that economy should be kept in mind with the scope of expansion in the country. As Carrefour is already a giant departmental store, they need to make sure that the people of that country do accept their kind of departmental stores. Thus targeting should be properly done.

References

Bloom, P.N. and Perry, V.G. 2001, ‘Retailer power and supplier welfare: the case of Wal-Mart’, Journal of Retailing, Vol. 77, pp. 379-96.

Burt, S. 1998, ‘Carrefour: internationalising innovation’, in McGoldrick, P. (Ed.), Cases in Retail Management, Pitman Publishing.

Dupuis, M. & Prime, N. 1996, ‘Business distance and global retailing: a model for the analysis of key success/failure factors’, International journal of Retail & Distribution Management, Vol. 24 No. 11, pp. 330-8.

Filser, M. 2001, ‘Reenchanting the shopping experience: case studies from France’, European Retail Digest, No. 30, pp. 23-6.

Manzano, M. 1997, ‘The relationship between manufacturers and retailers in French marketing channels’, Proceeding of the EAERCD 9th International Conference on Research in Distributive Trades, Leuwen.

Malhotra, Naresh K. 2004, ‘Marketing Research- an applied orientation, fourth edition’, pp.558-583, Pearson Education.

Beatty, S.E. and Ferrel, E.M 1998, ‘Impulse buying: Modeling its precursors’, Journal of Retailing, 74(2), pp 169-191.

Wall Street Journal Asia 2006, ‘Carrefour SA: Expansion Plan to Include Buying Retail Firms in China’, Wall Street Journal. Asia

Wernerfelt, B., 1984, ‘A Resource-Based View of the Firm’, Strategic Management  Journal, vol. 5, p171-180

Shaver, J.M., Witchell, W. and Yeung, B.1997, ‘The Effect of Own Firm and Other Firm Experience on Foreign Direct Investment Survival in the United States, 1987-92’, Strategic Management Journal, vol. 18, p811-24.

Shetty, Y.K.1979, ‘Managing the multinational corporation: European and American styles’, Management International Review, vol. 19, p39-48

Colla, E., Dupuis, M. 2002 ‘Research and managerial issues on global retail competition: Carrefour/Wal-Mart.’ International Journal of Retail & Distribution Management, 30: 103–111

Mahoney, J. and Pandian, J.R. 1992, ‘The Resource-Based View within the Conversation of Strategic Management’, Strategic Management Journal, vol. 14,  p179-192. Marketing Briefs (1996) in Marketing Management, Summer, vol. 5(2), p8.

Marschan-Piekkari, R. and Welch, C. 2004, ‘Qualitative Research Methods in International Business: The State of the Art’

Meredith, D. 2004, ‘Wal-Mart’s China Growth Under Way’, Women’s Wear Daily, vol.188 (95), p2-2.

Mitchell. T.R. 1997, ‘Matching Motivational Strategies with Organizational Contexts’, Research in Organizational  Behavior , vol.19, Grrenwich, CT: JAI Press, p60-62. 

Naughton, K. 2006, ‘The Great Wal-Mart of China; To Move into China, America’s Biggest and Most Successful Retailer Had to Learn its Business All Over Again’ (U.S. Edition), Newsweek , New York, Vol.148 (16), pp50-50.

Parboteeah, K.P. & Cullen, J.B. 2003, ‘Social Institutions and Work Centrality: Explorations beyond National Culture’ Organization Science, vol. 14, p137-14

 Liberman, M. & Montgomery, D.1988, ‘First-Mover Advantages’, Strategic  Management Journal, (Summer Special Issue, 1988), p41-58.

Li, W. 2004, ‘Who Wins in Chinese Market: Wal-Mart or Carrefour’ (translated). Accessed on 26^th March, 2016

Lin, M.Q. & Liang, W.K 2001, A Comparative Study of Asia Strategy: Wal-Mart versus Carrefour, Accessed on 26^th March, 2016,