careefour -global business strategy-india centric
TRANSCRIPT
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 1/27
v
BUSINESS STRATEGY
Team – • Anand• Gaurav• Jeewan• Suchitra
• Kushagra• Siddhartha
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 2/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 3/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 4/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 5/27
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 6/27
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 7/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 8/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 9/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 10/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 11/27
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 12/27
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 13/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 14/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 15/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 16/27
v
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
Carrefour – Options & Choices
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 17/27
v
Strategy
• Establish back-
end
infrastructure
and central ware
houses at
different
strategic
locations
Tasks
• Efficient Suply-
Chain
Management
System
BUSINESS STRATEGY
Carrefour – Options & Choices
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 18/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 19/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 20/27
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
v
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 21/27
Electronics
• Focus: technology and Image• Assisted sale of products and
services
• Integrated solutions
• Broad and exclusive offering of financing plans
• Specialist vision
BUSINESS STRATEGY
v
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 22/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 23/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 24/27
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 25/27
Establish cash
and carrystores &
supermarkets
in major tier II
cities and
cities above
population of
5 million
Carrefour – Time Plan
v
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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 26/27
v
References
• http://www.oup.com/uk/orc/bin/9780199543939/frynasmellahi2e_ch05.
• 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
8/3/2019 Careefour -Global Business Strategy-India Centric
http://slidepdf.com/reader/full/careefour-global-business-strategy-india-centric 27/27
v
THANK YOU
BUSINESS STRATEGY