Analysis of Carrefour's failures and success (citing the example of China and Mexico)
- A general overview of Carrefour presence in Asia
- Areas of implementation
- Comparison with European competitors
- Explanation of the situation
- An assessment of the number of French expatriates in Asia and their functions
- Comparison of Carrefour strategy in Thailand, Taiwan, China and Mexico with differences and similarities
- Explanation of Carrefour's success and failures in Asia and Mexico
- The main obstacles in terms of human resource management faced by foreign companies in Asia
?Carrefour', which means ?Crossroads' in French, is an international hypermarket chain headquartered in Levallois-Perret. A year after its conception in 1959, its first supermarket was opened in Annecy in Haute-Savoie. Today, in the large distribution sector, the Carrefour group is the leading player in Europe and is ranked second worldwide after Wal Mart. It is present in 30 countries and accounts for 12,028 stores (including franchises).
According to the annual report of 2005, the group posts a turnover of approximately 74.49 billion HT, which corresponds to 93.61 billion euros which is inclusive of all taxes. Carrefour distributes its turnover geographically as follows: 48% in France, 38% to the rest of Europe, 7% in America and 8% in Asia. In China, Carrefour was the first foreign retail chain to set up shop in the domestic sector.
General overview of the presence of Carrefour in Asia
- Areas of implantation,
- Comparison with European competitors
- Explanation of the situation.
- Assessment of the number of French expatriates in Asia and their functions.
The first Asian country where Carrefour set up its activities is Taiwan, where it opened its first hypermarket in 1989.
Today, Carrefour is present in eight Asian countries and has been increasingly strengthening its position. Whether through franchise agreements, acquisitions or openings, the group has revitalized its trade policy in most Asian countries.
- In China, Carrefour celebrated its ten-year presence last year with 35,000 employees working in 70 hypermarkets, eight supermarkets and 225 hard discount stores. We note that China has transferred its focus from supermarkets to hypermarkets and hard discount stores. In China, Carrefour is called ?jialefu', i.e., ?maximum happiness?.
- In Taiwan, Carrefour has 37 hypermarkets and 10,000 employees. This is the second biggest operational hub of Carrefour in Asia after China.
- South Korea: Carrefour has been present for nine years in this country. It owns 31 hypermarkets and is the fourth leading distributor. The new CEO who aims to focus only on markets where it can be a leader has sold its hypermarkets in Korea.
- Indonesia, where the company has been operational for 7 years now, owns 20 hypermarkets with 5 new openings in 2005. Carrefour is the second largest retailer and a leader in the hypermarket format.
- Japan: the Group's business (8 supermarkets) was sold to Aeon in March 2005. The latter operates under the Carrefour franchise and distributes branded products in the country.
- Thailand, the group is the third biggest distributor in the hypermarket format; Carrefour Quality contracts were signed with five suppliers for the cultivation of vegetables, fruit and rice.
- Malaysia: Carrefour has been established there since 1996 and now has eight hypermarkets.
- Singapore: Carrefour has been operational there since 1997 and now has two hypermarkets.
The main European rival for Carrefour in Asia is Auchan. This French group opened its first store in Roubaix in 1961, and has been growing steadily, becoming a major retail group worldwide.
[...] Part Two: Comparison of strategies Let us compare the strategies adopted by Carrefour in Thailand, Taiwan, China and Mexico with a table. In general, the group's strategy is to strengthen its market share in each country it operates in by developing the brand's ace card, and playing on the complementarity of its formats. China Thailand Taiwan Mexico Partnership with a Taiwanese group involved in the distribution, finance and real estate. Carrefour takes Carrefour takes Carrefour takes suppliers and suppliers and suppliers and local products local products local products references are Taiwanese are Asian). [...]
[...] "International companies that recruit must adapt their remuneration policy to their strategic objectives and find the balance, knowing that competition is no longer between multinationals but Chinese companies, sector by sector, region by regional." Workforce: Over the past ten years, the salaries of employees of multinational companies have been increasing significantly. This has led some foreign companies, in a bid to reduce costs, to begin relocation to the interior. There, they pay less for their employees, regardless of their level, but face regulatory barriers (including hukou) and difficulties in finding candidates for management positions. [...]
[...] Part Three: Success in China, failure in Mexico Explain the success of Carrefour in Asia and its failure in Mexico: Ø Its success in Asia The success of the Asian countries is mainly due to the appropriate organization, and focus on major strategic points including: Partnering with local groups: Generally, the partnership is with local groups involved in the distribution, finance and real estate. To meet demand, the Group uses maximum number of suppliers that deliver maximum local products, over and Asian products. [...]