Big C supercenter operates business in the form of “Hypermarket” or “Supercenter”, a modern
retail business which is managed under the umbrella of Casino group. It is one of the major
retailers in the world, with over 200,000 employees working in more than 11,000 stores, in
Vietnam, Thailand, Argentina, Uruguay, Brazil, Colombia, France, Madagascar and Mauritius.
Today, Big C has a total of 17 stores all around Vietnam. With more than 8,000 staffs, Big C
offers a clean, comfortable shopping environment with a wide assortment of goods available at
reasonable prices and provides an outstanding customer service in order to ensure the winning
business strategy. Big C provides a one-stop shopping experience to our customers with a wide
range of useful services at all stores. In addition, Big C represents two of the most important
criteria in business and strategic direction to their success. “Big” means "Great", which shows
the massive scale of Big C supermarket and a various selection of goods that they offer.
Currently, each Big C supermarket has about 40,000 items of goods to meet customer’s needs.
“C” is the abbreviation of the word "Customer", they are the key to the business strategy of the
In the previous report, we have explained the strategy contents including missions, visions,
goals, core competencies as well as the significance of stakeholder analysis based on the
information of the business. We also analyzed the internal and external factors for the company
then using SWOT analysis in guiding strategy formulation for the company. This is the
continuation of the previous report, carrying out the next stages of strategy making: Crafting
strategies, and Evaluating possible alternative strategies.
Revision of Existing strategies
1. Cost Leadership
We can see evidences in BigC’s behavior proving that this company is following a costleadership strategy. It focus on serving the mass market, targeting all people. We can see this
even in the vision statement of BigC (Nourishing a world of diversity). And it is clear that BigC
is using cheap prices as one of their most important selling points. According to Michael Porter’s
competitive strategies model, with a broad target and a price-based competitive advantage, we
can conclude that BigC is following a Cost Leadership strategy.
There have been criticisms about how BigC follow this strategy. The most popular
criticism by customers is that there are many products in BigC which are more expensive than in
other places. Here are some examples showing price comparison of the EXACT SAME ITEMS
in BigC and in wet markets:
Popular price (wet markets)
Nylon gloves (1 box)
Omachi noodles (pack)
Many among BigC’s customers claim that BigC only sell some certain goods at a cheaper
price (especially FMCGs such as washing power, toothpaste, etc.); in order to create a belief that
they are selling cheap. The rest of BigC’s products are much more expensive than the usual
This fact shows that BigC is not completely following the Cost Leadership strategy. They
are only using cheap prices (accepting even zero profit in some goods) to draw customers toward
them, then make profit by selling other products at prices higher than market levels.
Although BigC is still successful currently, it may suffer very significant damage when more and
more customers realize this fact and turn away from BigC. Hence, a more sustainable strategy
should be considered. Choosing a distinct direction – either fully cost leadership or fully
differentiation – may be advisable for this business.
2. Market penetration
Based on the Ansoff Matrix, we find that BigC is following a Market Penetration
strategy. They rarely expand their business to new products or new markets, instead BigC try to
maintain or increase their market share in existing products and secure their dominance; by
applying competitive pricing and aggressive sales promotion, as well as strengthening
Market penetration is a strong but costly strategy to follow. There are several activities to
do in order to grow using this strategy:
Increase present customers’ rate of use:
o Increasing the size of purchase
o Maximizing the rate of product obsolescence
o Finding new uses for products
o Advertising other uses
o Offering incentives for increased use
Attracting competitors’ customers:
Lure customers away from competitors by establishing differentiation between BigC and
them, increasing advertising efforts, or cutting prices.
Attract non-users to buy:
This process can be done by offering trial uses of our products, adjusting the price up or
down, and promoting other uses to attract these customers.
Big C has been doing well in pursuing the Market Penetration strategy. Massive sales
promotion and bonuses makes customers want to buy more, buy in larger amount when shopping
at BigC. BigC drew many of competitors’ customers toward them: many shoppers who used to
go to Metro now prefer BigC, and many others who come to smaller supermarkets now come to
BigC for shopping. Many prefer buying massive amount of FMCG goods in BigC and stockpile
them instead of buying in usual distributors in wet markets (e.g. washing powder, toilet paper,
etc.). A large number of non-users became buyers: people usually complains that they usually
find themselves buying more than they intend to, and some of which are the things they do not
We can see applying Market Penetration strategy has become a great success of BigC.
Several alternative strategies
We hereby apply several different methods to craft strategies for the company.
1. SPACE Matrix – Strategic positioning
The Strategic Position & Action Evaluation matrix (SPACE matrix) is a strategic management
tool that focuses on strategy formulation especially as related to the competitive position of an
The SPACE matrix can give us the direction for building our strategies.
The SPACE Matrix analysis functions upon two internal and two external strategic dimensions
in order to determine the organization's strategic posture in the industry. The SPACE matrix is
based on four areas of analysis.
- Internal strategic dimensions:
Financial strength (FS)
Competitive advantage (CA)
- External strategic dimensions:
Environmental stability (ES)
Industry strength (IA)
By analyzing these areas using several most influential factors, addressing their characteristics
and importance, we can direct our strategies accordingly.
There are two tools similar to the SPACE matrix: the Boston Consultant Group matrix (BCG
matrix) and the McKinsey matrix (a.k.a. GE matrix). These tools are built based on the same
foundation with SPACE matrix (market/industry attractiveness and the firm’s competitive
position). However, BCG matrix and McKinsey matrix tend to provide much simpler and vague
direction, which may be unpractical for strategy development in our particular case of BigC.
Therefore, we decided to use the SPACE matrix as the sole representative for the “Market
attractiveness – Competitive position” models.
a. Financial Strength (FS)
Big C is a strong company in terms of finance. From establishment until now, BigC has
been keeping a steady grow in revenue, except for in 2007 when Vietnam experience
hyperinflation. The company even managed to increase its revenue in 2008, when the
global crisis happened. The table below shows BigC’s revenue from 2005 to 2008:
Revenue (billion VND)
Besides, BigC also have a significant and stable revenue source from exports: in 2009 it
exported nearly 1000 containers of goods, with a net worth of around 17 million USD.
Moreover, BigC is a division of Groupe Casino (France), a successful multi-national
corporation. Hence, BigC is financially backed by this giant, taking advantage over many
of its competitors which are not supported (e.g. Co-opMart).
Because the financial data of BigC is not available to the public, we can only estimate
their financial strengths based on these factors. Accordingly, we give the Financial
Strengths of BigC the following scoring:
Financial Strength (FS)
Steadily growing revenue
Stable income from exporting
Backed by Groupe Casino
b. Competitive Advantage (CA)
Market Share of Supermarkets in
Hochiminh City (2008)
-Source: 2008 Hochiminh City consensus, as cited in Nguyen, 2009According to Nguyen (2009), BigC have certain competitive advantages and
disadvantages in comparison with strong competitors like Co-opMart. We hereby
summarize the most significant points and score them accordingly:
Competitive Advantage (CA)
BigC has significant market share, but far after Co-opMart and Metro in
BigC has hypermarkets all standardized, complying to 2005 national
standards. Older competitors (established before 2005, including Co-opMart)
have many supermarkets which do not meet the standards.
A few products are cheaper in BigC than in other places, however Co-3
opMart has better promotion schemes for most of these products.
BigC has much less coverage than Co-opMart in South Vietnam, due to the
weak distribution system. In North Vietnam, BigC still reigns as the most -4
Less variety of products than Co-opMart and Metro.
Rich in imported goods, but weaker than Co-opMart in terms of local goods.
Better advertising and promotion activities (than all competitors).
BigC has a wider variety of products produced by themselves.
c. Industry attractiveness (IA)
Usually, FMCG goods is a SLOW growing market. However, the most profitable items
that BigC sells are not FMCG goods; plus the fact that Vietnamese population is growing
fast, this is not a limitation for the growth of BigC’s market size. In fact, since BigC’s
revenue is growing very well (around 10% per year) when market share stays stable, we
can safely say that this industry is growing steadily.
Besides the industry’s growth rate, we should also consider the Porter’s Five Forces to
analyze the industry attractiveness. (To see more details about Five Forces analysis for
BigC, please refer to the previous report of us). The total compilation of all these factors
is shown below.
Industry Attractiveness (IA)
Averagely growing industry
Relatively high threat of new entrants
Very high threat of substitutes
Low bargaining power of suppliers
Considerably high bargaining power of buyers
There are strong competitors, especially in South Vietnam
d. Environmental Stability (ES)
We address BigC’s Environmental Stability mainly by looking back at our previous
Environmental Stability (ES)
Very politically stable, but business legislations are frequently adjusted
Chaotic bank policies and interest rates
Society is developing toward modernization
Technologically developing: online shopping becomes more popular, more -2
comfortable shopping, electronic payment, etc.
Economic cycle stage: in crisis, which is unfavorable for now; but will have -2
great potential to grow later.
Using all the estimations shown above, we can plot the dimensions into a SPACE matrix
and draw a suggestive conclusion about BigC’s future strategy direction.
As we can see in this figure, the SPACE model gave us a suggestion that BigC should
follow the Conservative Strategy. This strategy is similar to the Dog position in BCG matrix,
and the Controlled Harvest position in McKinsey matrix.
The strategic movements that these two tools suggest are much similar to the points
brought by SPACE matrix below.
Conservative strategy is often suggested by SPACE matrix if the industry looks bad and
the business has significant competitive advantages. It is when any remaining profitability is
under major threat and the business can become a cash drain which will reduce financial strength
to diversify elsewhere.
The business should look to trim costs and any loss making customers and products
wherever it can to buy more time to find attractive diversification opportunities. It should also
cut back on capacity so that it shrinks to fit the future market expectations. We should consider
the various SBUs of BigC and even the particular activities or products in each SBU. Food
processing is an important and significant SBU for BigC: though not too popular in Vietnam, it
is the source for BigC’s stable income from exporting. So we should consider the specific
products in BigC’s retailing system: which products are inefficient for the business, which are
important to the business. We need to clarify the strategic role of each product in order to have
Otherwise the business may be able to improve its position through a determined strategy
to improve its competitive advantages. They can make major gains through focused action and
find overlooked assets and opportunities. However, BigC should be careful so that it doesn’t
over-invest because the market isn’t considered to be attractive. The business may identify
niches where it does have advantages or can quickly develop advantages that are not appreciated
in the wider market.
The conservative strategy in the SPACE matrix also suggests that the business is not
under major threats from the environment; and because of its financial strengths, it has time to
consider its options.
2. Ansoff Matrix
As we mentioned in Part 1 of this report, BigC has been following the Market Penetration
strategy in the Ansoff matrix, and it brought significant success to the company. We hereby
address more alternative strategies that the company may want to follow, by looking at other
directions in the Ansoff matrix.
a. Market development
Market development is the name given to a growth strategy where the business seeks to sell its
existing products into new markets.
There are many possible ways of approaching this strategy, including:
New geographical markets; for example exporting the product to a new country
New product dimensions or packaging.
New distribution channels
Different pricing policies to attract different customers or create new market segments
In the case of BigC, there are two most appealing options for market development:
Exporting its products (processed food) to new countries, using the existing export SBU
located in Dong Nai.
Opening new hypermarkets/supermarkets in new locations
b. Product development
Product development is the name given to a growth strategy where a business aims to
introduce new products into existing markets. This strategy may require the development of new
competencies and requires the business to develop modified products which can appeal to
For BigC, the production SBU may consider developing new products or product lines to
add to their production system of food processing. This activity will need some time and efforts
of the R&D department and also the market research division of the company. The retailing SBU
may find new products to sell in their hypermarkets, this requires intensive work of the market
research division of BigC. Since selling in hypermarkets such as BigC’s needs very good market
adaptability and precise timing for the release of each and every product, finding most
appropriate products to sell at the most appropriate time is a difficult job.
Diversification is the name given to the growth strategy where a business markets new products
in new markets.
This is an inherently more risk strategy because the business is moving into markets in which it
has little or no experience.
For a business to adopt a diversification strategy, therefore, it must have a clear idea about what
it expects to gain from the strategy and an honest assessment of the risks.
For BigC, the company may want to spend money to establish a whole new business. In fact, the
word “establish” is used loosely here: for better pace and efficiency, companies wanting to
diversify usually do so by merging with or taking over other companies.
Diversification can be either related or unrelated to BigC’s existing business. There are several
Vertical integration: The forward vertical integration is not available, since BigC’s
vertical end is retailing, and the deliveries are already done by themselves. In backward
vertical integration, BigC can start doing business in farming, thus supplying inputs for
its food processing SBU. Another way is to produce other goods to supply its retailing
hypermarkets. Food items and FMCGs are the most viable options, since other types of
products are less likely to make profit when producing and selling in small amounts.
(Note that producing food items here means opening/taking over businesses which
produces food, not expanding the existing food processing SBU to produce new
Horizontal integration: BigC can buy (take over) other companies. This option is highly
potent, since widening the distribution channel is a favorable move for BigC. Gaining
more market share and eliminating competitors are also good for the business. However,
cost is the main concern in this option.
Merging with strong competitors may be a solution, but this has never been the case with
Groupe Casino. This option is likely to be denied by the parent company.
Unrelated integration: this is a very risky option, since the company will need to strive in
a market it has no experience in. Unrelated integration has no limitation, the company can
spend money to establish a new business or take over any business that it sees great
potential for profit. BigC should know really well what it is doing, and should have
extremely careful research about its choices before deciding to execute this option.
Summary of alternative strategies given:
1. Looking to trim costs by selecting which products are important to us, which products
negatively affect our profitability. Cut costs by not working in unworthy products and
focus on most profitable ones.
2. Find niches to focus at, developing a differentiation plan to gain market share in
particular segments, assuring better profitability.
3. Exporting to more countries.
4. Establishing new hypermarkets to cover more geographical area.
5. Develop new products in the food processing SBU.
6. Finding new products to retail.
7. Backward-integrate with farming, supplying inputs for the food processing SBU.
8. Backward-integrate with producing new food items or FMCG goods.
9. Purchase smaller supermarkets to make them BigC’s.
10. Establish or take over businesses unrelated to existing enterprise, selecting only the best
In this part, we assess the alternative strategies found in Part 2 of this report, by using three main
criteria: suitability, feasibility and acceptability. We included Ranking and Scoring to evaluate
the advantages/disadvantages of each strategy. Since we do not have access to the company’s
particular objectives in detailed figures, all evaluations here are qualitative.
Note that during the formation of the strategies above, we already filtered some obviously
inappropriate options using these criteria. For example, the option of merging with strong
competitors was removed because of Acceptability: it is likely to be denied by Groupe Casino
(France), the parent company of BigC.
1. Suitability: “Should it be done?”
The first criterion we use to assess a strategy is whether the strategy has significant positive
effects to the business or not. A suitable strategy needs to comply to the following criteria:
Does the strategy fit well with the company’s situation? That is, does it concern the
strength, weakness, opportunity and threats of the company (see our SWOT analysis in
the previous report for details)
Does the strategy fit with the organization’s vision, mission, goals and objectives?
The table below lists all 10 alternative strategies we mentioned in Part 2, and grade their
feasibility accordingly in the manner similar to Ranking and Scoring method.
Stren- & fix Oppor- with
Weak- tunities Threats existing
1. Cut costs by not working in
unworthy products and focus on
most profitable ones.
2. Find niches to focus at, developing
a differentiation plan to gain market
share in particular segments,
assuring better profitability.
3. Exporting to more countries.
4. Establishing new hypermarkets to
cover more geographical area.
5. Develop new products in the food
6. Finding new products to retail.
7. Backward-integrate with farming,
supplying inputs for the food
8. Backward-integrate with producing
new food items or FMCG goods.
9. Purchase smaller supermarkets to
make them BigC’s.
10. Establish or take over businesses
unrelated to existing enterprise.
2. Feasibility: “Could it be done?”
The second criterion is whether the company have sufficient resources to follow the strategies
(financial resource, human resource, management capability, time, and many other activitylimiting factors).
The feasibility of each strategy is highly dependent on the nature of the strategy itself. Different
strategy needs different resources and in different amount. For example, exporting to more
countries needs attention about production capacity, and if it is insufficient, many resources must
be poured in. Developing new products in the food production SBU needs time and an amount of
retained profit to invest in research and development. Related integration (horizontally and
vertically) needs less time, but much larger amount of money. However, integration projects are
likely able to receive financial support from the parent company, Groupe Casino.
The table below addresses the feasibility of each strategy. Strategies with lower feasibility means
it needs more resources, which the company may not have enough to supply.
11. Cut costs by not working in
unworthy products and focus
on most profitable ones.
12. Find niches to focus at,
developing a differentiation
plan to gain market share in
particular segments, assuring
13. Exporting to more countries.
Money, time (for market Good
should be from retained
All resources to improve Good
14. Establishing new hypermarkets Money,
to cover more geographical capability, human resource
15. Develop new products in the Time, money for R&D
food processing SBU.
16. Finding new products to retail. Money for market research
farming, supplying inputs for
the food processing SBU.
producing new food items or
19. Purchase smaller supermarkets Money
to make them BigC’s.
businesses unrelated to existing
Since BigC is not a public limited company, the main stakeholders influential to the acceptability
of strategies are the parent company and the managers. Managers pay attention mostly to the
development of the company, hence they are more concerned about the suitability and feasibility
of the strategies. They are generally more short-term minded than shareholders. However, the
parent company (including its internal shareholders) pays more attention to the profitability of
the business, and they usually think more long-term. They concern about how their money are
The suggested strategies should not have problem with acceptability, with the exception of the
four diversification strategies. Since integration strategies (vertical and horizontal) needs a large
amount of money to be invested in, while being a risky move, stakeholders may question about
whether to do it or not. The last strategy (unrelated diversification) is the least acceptable option,
due to the enormously high risk involved.
After all the evaluations above, we hereby suggest the most suitable, feasible and acceptable
strategies that can help BigC develop well in the near future:
- Use retained profit to improve production capacity (food processing SBU), export to
more countries in order to increase the stable source of income.
- Press on market research in order to adapt well with market trends; always sell the most
desired products in the market.
- Take over weaker competitors to increase geographical coverage and market share. The
company should ask for support from Groupe Casino to have sufficient financial resource
to do this.
In this report, we have revealed the issues involved in strategic planning for Big C. We
analyzed the existing strategies that BigC has been applying, assessing their effectiveness. We
also used several tools for strategy formation, mainly SPACE matrix and Ansoff Matrix, in order
to form several alternative strategies for BigC. After assessing these alternative strategies using
the three criteria (suitability, feasibility, acceptability), we suggested that the company should:
Use retained profit to improve production capacity (food processing SBU), export to
more countries in order to increase the stable source of income.
Press on market research in order to adapt well with market trends; always sell the most
desired products in the market.
Ask the parent company for capital to take over weaker competitors to increase
geographical coverage and market share.
We hope these recommendations prove helpful for the company. We are looking forward
to making further contributions for the company.
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