Careefour -Global Business Strategy-India Centric

8/3/2019 Careefour -Global Business Strategy-India Centric

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BUSINESS STRATEGY

Team – • Anand• Gaurav• Jeewan• Suchitra

• Kushagra• Siddhartha



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Carrefour- A brief Intro

• Founded in 1959, headquartered in Levallois-Perret, France, means

"crossroads" in French.

• The second largest retail group in the world in terms of revenue and third

largest in profit after Wal-Mart and Tesco.

• Carrefour operates mainly in Europe, Argentina, Brazil, China, Taiwan,Colombia and in the Dominican Republic, but also has shops in North

Africa and other parts of Asia.

• Operates in 32 countries

Revenue €90.10 billion (2010)

Operating income €1.836 billion (2010)

Profit €433 million (2010)

Total assets €53.65 billion (end 2010)

Total equity €10.56 billion (end 2010)

Employees 471,755 (end 2010)

BUSINESS STRATEGY



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Carrefour - Store Formats

• Hyper Market - Hyperstar

• Super Market- Carrefour Express

• Hard discount stores – Dia

• Convenience stores - Carrefour City, 5 minutes

• Cash & Carry - Carrefour Contact, Promocash, Docks Market, Gross IPer

BUSINESS STRATEGY



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Carrefour - Network of Stores

End of

December

2010

Opened

stores

Acquisition

stores

Transferred

stores

Closed

stores

End of June

2011

Worldwide 3,589 67 0 -8 83 3,585

Hypermarkets 1,308 18 0 -1 7 1,318

Supermarkets 1,781 29 0 -3 35 1,772

Convenience

stores474 20 0 2 40 456

Cash and Carry 26 0

0 -6 1 19

BUSINESS STRATEGY



Vision

• Commited

Professionals

• Commited

members of thecommunity

Dream : To make Carrefour a business that is

recognised and loved for helping its customers andconsumers enjoy a better quality of life, each andevery day.

Committed Caring Positive

BUSINESS STRATEGY

Carrefour - Values

• Caring towards

cutomers

• Caring towards

consumers

• Positive for

employees

• Positive for

planet



BUSINESS STRATEGY

ObjectivesRisk

Diversification.

3rd most

Attractive retail

Investment

Nation

To be the most

Preferred Retailer

by 2016

Stagnant market

in France

To make India

the Epicenter for

South-East Asia

Region by 2017

Proximity to

the bigger

market

through JV



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Generic Advantages MNE Advantages MNE Disadvantages

Leaders in

Hypermarkets and

Super markets

Exposure and Knowledge

base

Local Market

understanding and

deciding the strategy.

Localization

Supply Chain

Managerial capabilities and

decentralized approach

Decentralised approach

lead to less control

through head quarters

Asia Pacific

presence (Similarity

in some approach

can be formed)

9631 stores in 32 countries Government regulations

and Brand formation

BUSINESS STRATEGY

Carrefour - Advantages



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Selection criteria How to measure

Size Current Population – 1.21 Billion,

GDP -8.5%

Demand Per capita GDP- 3,608.196 (USD) grew by 17.1%

compared to previous year

Growth Rate GDP- Expected to grow to 8.7% by 2012

Per capita – Expected to grow to 17.3% next

year

Regulations Relaxed regulatory requirements & reduced

legislative burden

Competition Pressures owing to Global Competition –

WalMart, Metro AG, Tesco

Local Competition in India

Indian Brands – Pantaloons, BigBazaar,

Lifestyle , Shopperstop

Global Brands- Bharathi WalMart

Production costs Low labor wages & growth in labor productivity

Selection Criteria -INDIABUSINESS STRATEGY



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India’s

potential

HighPlatform for

e-enablement

Growth Rate, Demand

& Size

Low

Limited retail space

&

Soaring real estate

prices in Metro

Internationalization

- Lack of Local Supply

- Lack of Infrastructure

Low High

Carrefour’s ability to exploit India

A Framework for Carrefour’s Choice of India

BUSINESS STRATEGY



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Retail Sector poised for phenomenal growth

ORGANISED RETAIL EXPECTED TO GROW 35-40% CAGR

The Indian Retail

Sector, currently

the Fifth largest in

the world, is

poised for

phenomenal

growth in the

coming years

ORGANISED RETAIL EXPECTED TO GROW 35-40% CAGR

Size & Position in the current Scenario

Current Size & Future growth of Organized Retail in India

BUSINESS STRATEGY



Industry-specific Country selection Criteria (Potential)

There are several reasons why retail industry players like Carrefour could select Indiaas the target-

• Market size –Growth primarily driven by the strong domestic market demand &

Large consumer base. (Large untapped retail market. Currently organised retail

sector is contributing to only 5% of the total sector)

• Recently revised government regulatory requirements opening up FDI’s in single

brand retail up to 51%

• Largest and most dynamic economy with 5.4% growth in labour productivity since

2010

BUSINESS STRATEGY



Market Trends

• Only 5% market is occupied by

organized sector

• High disposable income

• Increasing urbanization

Market Growth

• Food & beverages – 70%

• Clothing & footwear – 10%

• Consumer Durables – 5%

Industry Analysis• Share of 10% of total GDP

• Market Size of Rs 723000 crore

• 95% market occupied by

unorganized sector

Main Competitors• Reliance Rs 90,000 crore

• Pantaloon - Rs 72884mn

• Trent - Rs17540Mn

Market

Market Analysis

BUSINESS STRATEGY



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Key Challenges for Carrefour in entering INDIA

Immense ethnic diversity & heterogeneity – Varying demand

India’s poor infrastructure - Logistics & Supply Chain

Workforce Management (talent crunch)- less no:of trained professionals in retailsegment

Competition from Indian Retailers including Pantaloons, Shopper stop, Piramals etc,

Regional government are very strong politically

Protest from small businesses (Kiranas)

Poor public image - pricing perceptions.

BUSINESS STRATEGY



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Carrefour Entry Mode in to International Business

Mode of entry : Foreign Direct Investment - FDI

Strategy 1Carrefour has decided to join hands with Aditya Birla’s retailbrand ‘More’ to sign a memorandum & to establish a joint-venture for multi brand retail chains in India. Carrefour willhold a 51% stake in this joint-venture.

Strategy 2

Carrefour will operate alone in cash & carry format bysetting up stores across various cities in the country.(Greenfield Venture)

BUSINESS STRATEGY



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Strategy

• JV with Adita

Birla Retail.Brand Name

“More”

• To leverage onthe existing

Infrastructure

Tasks

•To set up a JV

with Indian

Retailer in adhere

to the

Government

policy

Carrefour – Options & Choices

BUSINESS STRATEGY



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Strategy

• Super markets,

Hyper-Markets

in Tier-2

• Continue Cash-

N-Carry modules

• Open Discount

stores in densely

populaed areas

in metros

Tasks

• To establish

presence in

atleast 6 Tier-i

and 10 Tier-ii

cites by 2014

• To continue

with existing

Cash and Carry

modules

BUSINESS STRATEGY




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Strategy

• Establish back-

end

infrastructure

and central ware

houses at

different

strategic

locations

Tasks

• Efficient Suply-

Chain

Management

System

BUSINESS STRATEGY




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Carrefour Choices

Advantages of Joint

Venture for Carrefour

Minimize risk of failureHave a qualified partner toaggressively seek growth

and manage operations.Easy collaboration withsuppliers.Reduce supply-chain costs.Time to market - fastAccess to established

markets and distributionchannelsEasy adaptation to socio-cultural normsEliminate a local competitor

Advantages of

Carrefour Greenfieldventure(Cash n Carry)

Building strongerknowledge base &organization system.

Stronger control overthe venture.

Greater economies ofscale in the long run.

Easy transfer oftechnology, competency,

skill & expertise

BUSINESS STRATEGY



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Products

Variations in costsVariation according to season (Eg:Summer Sale – cotton shopping) Variation in style (Eg: ethnic wear,western wear)

Promotion

Off season sale ( Eg : Flat 30% off,Buy 2 get 1 free)Festival bonanza (Eg: Diwali ,

Christmas sale)

Operating routines

End to end supply chainTransportation

Optimization of delivery routes

Enhanced cold storage facility

Carrefour -Standardization Vs Localization

BUSINESS STRATEGY



Implementation

• Carrefour to go ahead with its principal of high local

adaptation.

• Has examples of operating in a similar way in China and few

other countries.

• Will maintain solid links with farmers, manufacturers and

suppliers for Cash-and-carry format.

• Will provide strong back end support for the Indian partner

for JV.

BUSINESS STRATEGY

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Electronics

• Focus: technology and Image• Assisted sale of products and

services

• Integrated solutions

• Broad and exclusive offering of financing plans

• Specialist vision

BUSINESS STRATEGY

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Baazar

• Focus : home & deco / seasonal• Exclusive import products

• Private and Controlled Labels

• Friendly Buying Experience

• Convenience- epurchase

• Cross-selling with hyper and

supermarkets.

BUSINESS STRATEGY



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Textile

• Focus: bedding, dining, bath and• children products

• Development of collections for

the local market

• Strong private label program

• Flexibility to adapt to the

regional seasonality

• Internal Quality control

BUSINESS STRATEGY



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BUSINESS STRATEGY

Innovation in Services

• Solution sale

• Assisted servicing

• Convenience

• Partnership and benchmark with theindustry

Adding value for consumers-Not only the products but the associated service packages



Establish cash

and carrystores &

supermarkets

in major tier II

cities and

cities above

population of

5 million

Carrefour – Time Plan

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2010 2011 2012 2013 2014 2015 2016

Integrate all system

with existing MORE

super markets

Launched its

1s Cash-Carry

store in India

Total 700

Supermarket

in India

Be the Most

Prefered

Reatiler -

Wholesaler in

India

Launched its

2nd Cash-Carry

store in India

Cover major

geographical

areas in cash

and carry

format &

Superstores

Establish joint

venture with

Aditya Birla

Retail - MORE

BUSINESS STRATEGY

Open 7 new

cash N carry

stores and

supermarkets



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References

• http://www.oup.com/uk/orc/bin/9780199543939/frynasmellahi2e_ch05.

pdf

• http://www.thehindubusinessline.com/industry-and-

economy/marketing/article2142209.ece

• http://www.mckinsey.com/mgi/reports/pdfs/newhorizons/food.pdf • http://www.atkearney.com/res/shared/pdf/BRIC_Promise_S.pdf

• http://articles.economictimes.indiatimes.com/2011-06-

19/news/29676855_1_carrefour-wc-platform-cash-and-carry-stores

BUSINESS STRATEGY

http://www.oup.com/uk/orc/bin/9780199543939/frynasmellahi2e_ch05.pdf


http://www.thehindubusinessline.com/industry-and-economy/marketing/article2142209.ece


http://www.mckinsey.com/mgi/reports/pdfs/newhorizons/food.pdf

http://www.atkearney.com/res/shared/pdf/BRIC_Promise_S.pdf

http://articles.economictimes.indiatimes.com/2011-06-19/news/29676855_1_carrefour-wc-platform-cash-and-carry-stores



















http://www.atkearney.com/res/shared/pdf/BRIC_Promise_S.pdf

http://www.mckinsey.com/mgi/reports/pdfs/newhorizons/food.pdf










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THANK YOU

BUSINESS STRATEGY

Careefour -Global Business Strategy-India Centric

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