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Carrefours Global Reach:

A case Study of Its Strategy

Presented By:Presented By:

GROUP 4GROUP 4

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IntroductionIntroduction

In 1959, Carrefour was founded by three businessmen: Marcel Fournier,

Louis Defforey and his son, Denis Defforey in Savoie, the South-Eastern

part of France.

Carrefour pioneered in the establishment of hypermarket, which aresupermarkets with huge dimensions in terms of space.

Carrefour has expanded steadily since 1969. Now, it serves over 2 billion

clients per year in its more than 9,000 stores, which are present in 32

countries across 3 geographic zones.

Carrefours strategy is much about global reach, and Carrefour has becomethe second largest retailer worldwide till now.

The brand Carrefour means It is convenient to fetch it there.

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Carrefours Organizational DevelopmentCarrefours Organizational Development

Organizational development is a long-term effort, led and supported by top

management

Applied an ongoing collaborative management of organization culture

Special emphasis on the culture of intact work teams and other team

configurations

It was a private company from 1959 to 1970 and share of the company was

intensely held by the family members

Carrefour decided to go public in 1970, introducing 20% shares in the stock

market

It developed and enlarged from family organizational form to professional

management form, the owner of Carrefour recruited professional managers

In 1997, Carrefour declared to transform itself to be Carrefour S.A., an

incorporated company in legal provision

Letting professional managers go into top management and making decisions

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Carrefours Strategy

FRENCH INNOVATIONFRENCH INNOVATION

On June 15 of 1963, Carrefour opened a shop that the French had ever seen

before. The surface of the shop was 2,500m2, and it had 400 parking spacesas well. The shop was located at southern suburbs of Paris.

It was bigger than traditional supermarkets.

More than 15,000 kinds of goods were available for customers to choose.They adopted the strategy of Low Margin.

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TRIPLE INNOVATIONTRIPLE INNOVATION

After the success of French Innovation, Carrefour continues to step into hisexpansion strategies.

Triple strategy means internal growth, cooperation and franchising.

Strategy of internal growth includes business level strategy and corporatelevel strategy.

Strategy of cooperation says that a high degree of commercial operationresults from a high market concentration.

In order to increase its market share and reduce perceived risk, Carrefourstarted cooperating with his competitors by joint venture in France.

Applied strategy of franchising, a contractual arrangement in which a

franchisee owns and operates a business employing the franchisers brandname.

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CARREFOURS CHALLENGE FROM AMERICACARREFOURS CHALLENGE FROM AMERICA

Carrefour has invested outside France since 1969, and the first country that it expands

abroad is Belgium. Since then they expanded steadily.

Carrefour is 1st in Europe and the 2nd retailer in the world. With a presence in 32countries it makes of its sales outside France. This makes it the most international ofall food retailers. Mainly concentrated on 3 continents: Latin America, Europe andAsia.

America is one of the most important markets of the world. However, Carrefour failedin America in 1993.they gave up its investment in America and never come backthere up to now.

It also failed in Hong-Kong in 2000 during its global reach.

Moreover, the most difficult global reach of Carrefour is confronted by Wal-Marts

challenge.

Today, Wal-Mart has ambition to step into his global expansion, and gradually thiswill threaten Carrefours global reach. Recently, they meet and compete with eachother in South America (mainly in Brazil) and Asia (mainly in China and Japan).

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ConclusionConclusion

Through the analysis of the case study of Carrefour, we have learned much

more successful experience from its development process. However, in over

30 years of global reach, Carrefour has been confronted also with great

challenges. In Brazil, China, and Japan, Carrefour has encountered (and still

is encountering) many problems, and it also failed in the U.S. and Hong

Kong markets. With its strategies, however, Carrefour has finally has solved

these problems and maintained an outstanding position within the retail

business until now

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