University of Beira InteriorManagement and Economics Department 2007/2008 Marketing Graduation – 2nd year Negotiation of Process: Acquisition of Portuguese Carrefour by Sonae group Work accomplished by: Claúdia Leal Maria Pires
Outline: Presentations of the Carrefour Group and Sonae Objectives and strategies: • Sonae • Carrefour Integrative negotiation 5 C`s Dual model of concerns Games theory • Decision tree • Payoffs Matrix Conclusions
Companiess PresentationCarrefour Group Sonae The Carrefour group is a • Sonae is one of the biggest business retail store of economic Portuguese groups apportionment founded into France; which activities are taken care by five sub-holdings, Biggest worldwide network and among that the Modelo the first in Europe; Continente (Sonae Distribuição); Splits up into four important areas:hypermarkets, supermarkets, hard discount • The Modelo Continente is the and convenience stores; market leader in Portugal; The group is in Portugal for • Modelo holds six brands that about sixteen years but never have mention positions in afforded to reach its aims: being leader on the market their respective market segments from specialized retail.
Objective and strategy of Sonae Aim: to grow and to reinforce the leadership by acquiring new commercial units in the market; Strategy: acquire all opportunities that exist on the market for to achieve your objective.
Objective and Strategy of Carrefour Aim: to assure market leadership; Strategy: bet on the strengthening of the bunch through the positioning into direct marketplaces in order to exercise their strength in the international market; When the group reaches the conclusion that they wont achive their specific objectives for a given location their course of action is to relocate to more suitable countries where they can have a more dominate position. Source: APED (Portuguese Association the enterprises of distribution)
5 C`s Confrontation On the June of 2007, the interlocutors of the two groups, in simultaneous,In this process deal, we didn’t have discover that their interests among access to all the necessary proposals and counterproposals information. We’ve estimated the following: were similar, therefore, there is the possibility of an agreement amongstConsultation themselves.In January of 2007 the Sonae collected information, evaluated Conciliation the potential of the purchase, the position of the Carrefour in the On the 27th of July, 2007, an market and defined its initial agreement was made for the edges purchase valued 662 million EurosContact ConclusionIn February of 2007, the Sonae after Completion of this transaction is the study of the three P `s subject of the approval by Authority (product, people and promotion), of Competition, the closing of the which are referent to the contract is expected for January Carrefour, enters in contact with 2008 the interlocutor of the same.
Integrative negotiation The negotiation process: Sale of the Portuguese Carrefour to the Sonae group, relate to a process of integrative negotiation therefore, both parts benefit of the accord. That is, the Carrefour earns with the business as much as Sonae. Dual model of concerns • The situation between these two companies MAX- MAX MAX- MIN is of MAX-MAX (gain-gain), this means, both Cooperate Brother the groups have collaborated between themselves until they arrived at an accord. MIN- MAX MIN- MIN • The reason for the collaboration is mutual Compete Avoid interactive.
Theory Games - Decision tree Payoff unity: Sales volumes Carrefour (14104, 662) L B L (14003, 763) Optimal of Pareto Sonae Carrefour (7052, 0) B L (3526, 505) L Decision of treeSonae: Buy (B) Carrefour: Leave (L) Dont buy (B) Dont leave (L)
Payoffs Matrix Carrefour strategy Sonae strategy Leave Dont leave Buy (14104, 662) (14003, 763) Dont Buy (7052, 0) (3526, 505)Optimal of Pareto Variables:•This payoff (14 003, 763) is the best Sales volume of Carrefour : 505 millionsituation for both. Sales volume of hard discount: 505*0.2=101 Sales volume of Sonae: 3 526 million Transaction value: 662 million
Conclusions Sonae continues to grow specifically by acquiring new unities, and Carrefour leaves Portugal and goes to countries where it can operate as a leader. Sonae gets stronger in relation to it is clients, providers and rivals in the market. Carrefour doesnt leave the market totally and continues operating in Portugal with the brand Dia and Minipreço. We consider that this is a great deal to both sides, because Carrefour leaves the market and relocates to more profitable regions, and Sonae grows in the Portuguese market.
ConclusionsThe goals of our work have been reached, withsome limitations, particularly in the elaboration ofthe 5 C`s mainly because of the lack of informationthat was given to us, based on the confidentially ofthe same.Another point, that we cannot grant anapplication, is the definition of the negotiationamplitude, therefore we only have reference to thevalue of the non present transaction and the reserveprice, maximum and minimum, acceptable for thepurchaser and the salesman.