Carrefour has taken a bold, consistent stance on developing in china. Carrefour is simply side - stepping the laws. SWOT analysis Carrefour in China: Strength Operating localization strategy in both operation and management 1. Human resource: Decision-makers can make a variety of decisions which are suitable for the local conditions. 2. Purchasing: a) Raw material procurement process follows stringent quality checks and cost reduction methods. b) cutting the cost of the cost in the procurement channels c) increasing the competition between suppliers . operation: Managers in each shop are authorized. Don’t need to many levels of transmission, which to avoid the distortion and delay of the information. 4. Business model: a) Cutting the purchasing price, this adapts China’s economic and market environment. b) Relatively large stores with broad non-food lines c) Store openings are progressing well d) High proportion of locally sourced products e) violating the policy of retail sector in china , like keeping opening illegal shop in china Weakness 1. Bad relations with the Chinese government . Having an individual shop-management mode, Having no transparency and poor project management, this reduces consumer’s loyalty to Carrefour. 3. The tense relationship with some suppliers, damaging Carrefour's image. 4. The majority of the retailors are small and medium-sized enterprises, which are lack of bargaining ability with the big companies. 5. Carrefour’s Own-brands don’t sell well in china. 6. High “entrance” fee, which is not allowed in the countries which are well-developed in the retail market. Opportunity 1.
China's accession to the WTO 2. The increase of senior personnel in the retail market 3. Withdraw from the Japanese market, and focus on China Threat 1. The Policy and economic environment in china 2. The biggest competitor – Wal-Mart 3. The majority of China's local supermarkets 4. The markets(grocery markets) in china Expansion into the Asian market is now top priority, as it is believed that this region, especially in china, offers the largest opportunities for growth. However, there is a really big change in the Chinese market.
After joining the WTO, The Chinese market is opening wider while the competition is also getting tougher. Foreign retailers need to plan and implement their strategies tightly according to market conditions and their firm-specific resources. Carrefour closed four stores last year. It is said their closure was all due to bad location choice and poor management. The Carrefour China press office says that Carrefour currently has 180 stores, therefore the closing down of unprofitable ones is normal and in accordance with its strategic adjustment.
But i think Carrefour is now adjusting its strategy, choosing to open new stores in second and third-tier cities. And it's a trend in china. The most important issue is that Carrefour needs to attach importance on the relationship with customers and suppliers. Compared with Wal-Mart, Carrefour received more complaints from customers and suppliers, and warning from government. Although the prices of products in Carrefour are widely considered to be cheaper than Wal-Mart, the customer services are also vital for survive of a retailer.
In addition, Carrefour always reaps great profits from suppliers, and hence suppliers can obtain a small profit margin. Therefore, it is dangerous for Carrefour if these suppliers leave and stop supplying in the future especially when Wal-Mart have a stronger buying power. In addition, Carrefour needs to focus on its long-term development and plan strategies to create values resources in order to achieve competitive advantages Empowered purchasing and distribution rights and management hinder the delivery quality of goods, which is critically important for retailers.
In addition, Carrefour should develop advanced information systems on communicating with suppliers and stocking, which will save significant costs and benefit Carrefour’s stock management in the long-term. |Table1: Consumer Age Distribution in Hypermarkets in shanghai | | | | | | |Age distribution |
Item |RT-MART |Century Mart |tesco |carrefour |Wal-Mart | | | | | | | |Commodity(whether it isabundant and has acomplete range? ) |4. 15 |3. 96 |3. 93 |4. 21 |3. 55 | | | | | | | |price |3. 47 |2. 22 |3. 03 |2. 82 |2. 32 | | | | | | | |service |3. 53 |3. 14 |3 |3. 07 |2. 8 | | | | | | | |shopping environment |4. 04 |4. 17 |3. 83 |4. 03 |3. 62 | | | | | | | |shopping convenience |4. 01 |3. 76 |4. 01 |3. 64 |3. 69 | | | | | | | |staff mental outlook |3. 77 |3. 59 |3. 36 |3. 49 |3. 47 | | | | | | | |aggregation |22. 97 |20. 84 |21. 16 |21. 26 |19. 45 | | | | | | | | | | | | | | | | | | | | |