Carrefour's Strategies in China
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Case Details:
Case Code : BSTR246
Case Length : 30 Pages
Period : 1995-2006
Pub Date : 2007
Teaching Note : Available
Organization : Carrefour
Industry : Retailing
Countries : China
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts Contd...
Store Management
As a part of its global strategy, Carrefour had decentralized
its operations, giving full freedom to store managers to operate their stores.
Decentralization was one of the important factors for Carrefour's success in
international markets, with store managers being empowered to take decisions
according to the local traditions and customs...
Supply Chain Management
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The supply chain system that Carrefour had in China was quite flexible.
According to Christophe De Nays Candau, In-charge of Organization, Systems and
Supply Chain in Carrefour, China, "It's (supply chain system) highly fragmented,
so we have to keep our flexibility. We still use the bike if it's the lowest
cost and most efficient."
Carrefour procured most of the goods from within China to cater to its local
operations. Since its initial years of operation in China, about 85% of the
stock sold was procured locally. This helped Carrefour maintain lower prices
compared to other foreign retailers, who sold imported products...
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Localization Strategies
Carrefour believed that its stores should reflect the local environment and
complement the local culture. The western style hypermarket was customized by
Carrefour to effectively cater to the needs and preferences of Chinese consumers
(Refer to Exhibit X to see a few visuals of a typical Carrefour hypermarket in
China)...
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The HR Practices
Though Carrefour had expanded its operations all over
the world, the organization remained lean as several of its key
functions were decentralized. The headquarters had a staff of only about
20, with around 10 people involved in the HR function...
The Challenges
Industry analysts opined that customizing its store formats to suit
local needs had been Carrefour's main strength and this had helped the
company penetrate large and tier II cities in China. Despite rapid
growth, Carrefour's share in China was only at around 1.5% of the
organized retail market... |
Exhibits
Exhibit I: Top 25 Food Retailers in the World (December 2005)
Exhibit II: Retail Industry in China (2006)
Exhibit III: Carrefour's Banners
Exhibit IV: Carrefour - Consolidated Store Network (December 2005)*
Exhibit V: Carrefour - Consolidated Net Sales per Format/Region (2005)
Exhibit VI: Regulations in the Retail Industry in China: Pre and Post 2004
Exhibit VII: Carrefour - Hypermarkts in China (October 2006)
Exhibit VIII: Carrefour - Private Label Products Sold in China
Exhibit IX: A Note on Supply Chain and Logistics Network in China
Exhibit X: Visuals of a Typical Carrefour Hypermarket in China
Exhibit XI: Wal-Mart in China
Exhibit XII: China - Spread of Competitors by Region* (March 2006)
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