Case: Carrefour In Japan


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Case-study analysis undertaken at Strathclyde Business School as a course work for a module (Global Operations).

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Case: Carrefour In Japan

  1. 1. Carrefour exits Japan Group 2: Kalpdrum Raval • • M.A. Vikram Rajkumar • Tushar Kaul • Vishal Gholap Strathclyde Business School Project3/4/2012 Carrefour exits Japan
  2. 2. Agenda • About Carrefour • Japanese Consumer behaviour • Carrefour Business Strategy • Carrefour Operational Strategy • Pattern of Behaviour • Alternative Strategies • Japan after Carrefour • Carrefour after Japan3/4/2012 Carrefour exits Japan
  3. 3. Carrefour Group• World second largest retailer and largest in Europe• Presence in 34 countries – over 57% turnover derived from outside France• First international venture in 1969 in Belgium• Unsuccessful in Japan3/4/2012 Carrefour exits Japan
  4. 4. Japanese Consumer Behavior• Frequent shopping in small quantity• Fashion conscious• Not price sensitive compared to other Asian countries• Importance on quality3/4/2012 Carrefour exits Japan
  5. 5. Business strategy• EDLP• To provide one stop shop option• To develop the capital employed in store formats3/4/2012 Carrefour exits Japan
  6. 6. Operational strategy• To gain purchase synergies through procurement of products from local whole sellers• Multi-store format strategy3/4/2012 Carrefour exits Japan
  7. 7. Order Winning Criteria 1 Low Price Convenience 2 (accessibility and product width-depth) 3 Product Quality3/4/2012 Carrefour exits Japan
  8. 8. Operational Strategies - Analyzed Operational Strategies in Japan Procurement from local Multi-store format wholesalers Fit Focus  Sustainability  Risk  3/4/2012 Carrefour exits Japan
  9. 9. Pattern Ignorance of Ignorance of non- available coformance to Failure to adapt market market assesment to changes knowledge criteria Exit from Japan3/4/2012 Carrefour exits Japan
  10. 10. Change in order winning criteria 1 Low Price Product Quality Convenience 2 (accessibility and product Innovation width-depth) Convenience 3 Product Quality (accessibility and product width-depth)3/4/2012 Carrefour exits Japan
  11. 11. Alternative Strategy 1: Enter Japan with Local Partner Rationale: Strong supplier bargaining power in Japan and gaining local market know-how• Local partners facilitates in dealing • Hindrances in reachingwith the Japanese supply chain synergies between Carrefour’s• Provides Carrefour opportunity to corporate culture and localunderstand the Japanese market partner’s corporate culture• Flexibility in adapting to thechanging consumer needs 3/4/2012 Carrefour exits Japan
  12. 12. Alternative Strategy 2: Multi-Store Format with Small and Medium Stores Rationale: Japanese consumer behavior & Proximity of stores• High Return on Investment • Constant need to• Stores will be in close proximity for differentiate/innovate due toJapanese Consumers strong local market competition• Wide range of Products(product • No EDLP advantagedepth/width)• MSF will allow Carrefour to enhance 3/4/2012 Carrefour exits JapanJapanese consumer experience
  13. 13. Alternative Strategies Strategies in Japan Enter Japan with local Multi-store format with partner small medium sized stores Fit   Focus   Sustainability   Risk  3/4/2012 Carrefour exits Japan
  14. 14. Japan after Carrefour • GMS goes extinct1 • Increasing popularity of convenience stores and specialized supermarkets chains2 • Japan retail floor area grew by 3% in 200531. The myth of Wal-Martization: retail globalization and local competition in Japan and Germany (2006) by Aoyama and Schwarz2. Oligopoly and the structural paradox of retail TNCs: an assessment of Carrefour and Wal-Mart in Japan (2007) by Aoyama3. Seiyu (2005) by Shukan Daiyamondo3/4/2012 Carrefour exits Japan
  15. 15. Carrefour after Japan• More adaptive to local situation in its operation: China: Hard Discount stores (156 stores) Taiwan: Hypermarket (62 stores)• Product supply depending on the demand of the market• Carrefour Tesco integration – 45 hypermarkets (July 2006) in Taiwan• 100th Carrefour hypermarket was opened in Shaozing3/4/2012 Carrefour exits Japan
  16. 16. Critical Reflection• Business/operational strategy = Market demands even when business strategy ≠ operational strategy• Regional not global irrespective of AAA priorities and regional leadership strategies3/4/2012 Carrefour exits Japan
  17. 17. Thank you3/4/2012 Carrefour exits Japan