Carrefour Case Study

Introduction

This paper writes about the case on Carrefour: Lessons from exiting South East Asia. We will first provide a brief overview of the case followed by an analysis of Carrefour’s business environment using the PESTEL and SWOT analysis. Next up will be a discussion of Carrefour’s strategies and the central question of what went wrong in Asia. Lastly, we will end with some recommendations and a conclusion.

Overview of the case

Carrefour transformation

Carrefour is the leading retailor in the Europe market and has obtained a strong foothold globally, occupying the second place after Walmart. It succeeded with its customer-centric strategy, focusing on the needs of the consumers. Discounts on various seasons helped it to gain loyal customers.

With China’s entry into the World Trade Organization in 2001, many MNCs companies started to enter the Chinese market. Carrefour ventured into the Chinese market due to its large population and huge potential in its economy. Disposable income of the population

In the article named “Exit Carrefour” stated in the case, the South-East Asia Economy was blooming as compared to Europe at that time. As the level of incomes increase, more people are likely to head towards big and air-conditioned supermarkets. Hence, Carrefour could have given the South-East Asia market more time and reconsider its exit strategy then.

Taxation policies

The corporate income tax rates differ from each country and this will affect the margin of sales revenue at the end of the day. For example, the corporate income tax rate for companies in Singapore is only 17%, Carrefour would have a higher margin of revenue if it operates in Singapore as compared to another country with a higher tax

According to our research, Carrefour strategy is based on 3 pillars, namely becoming a preferred retailer, a leader in all markets, and improving their organization and operations. Based on the case, Carrefour store format comprises of hypermarkets, supermarket, hard discount, Cash and Carry, and Convenience Stores.

With more consumers using the Internet as a platform for shopping, Carrefour has started to tap into the E-commerce stores. After its acquisition of Rue du Commerce, Carrefour is exploring and making its online operations profitable. This is definitely a good strategy as the going online will enable Carrefour to reach out to a larger portion of the consumers.

What went wrong?

Main problem in Asia

Marketing has always been an important factor to ensure business growth; the lack of marketing campaign might have been a cause of downfall for Carrefour in Asia. In the article titled “Carrefour: what went wrong?”, Carrefour’s passive marketing campaign in Singapore was a factor that killed the brand. Coupled with factors such as location and aggressive competition, it has resulted in low product differentiation. As the domestic market was also saturated with local players, this made it difficult for Carrefour to retain its