A marketing critic of Carrefour's international expansion

Docs en anglais | 33 pages | 09-04-2007 | Format : | Note : Non noté

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Résumé

Carrefour opened its first hypermarket in Spain in 1973. It is the first store out of its domestic market. After that Carrefour gradually spread across the world in three main geographic areas: Europe, Latin America and Asia. Now Carrefour, the world's second largest retailer after Wal-Mart has announced this year a net profit increase of 10,8 percent to 706 million euros. This improvement is due to an aggressive price reduction and the will to attract new customers across the world by opening new stores. These results exceed most analysts' expectations. In France, sales grow 6, 3 percent to 17, 94 billion euros and overall. Moreover, more than a half (almost 52 percent) of the Carrefour consolidated net sales in 2005 is made out of its domestic market. "We are growing faster in a more targeted way" said the Chief executive officer who confirmed also that Carrefour was in line to open 100 hypermarkets before yearend.

With the emergent market, which is represented by the Chinese market for instance, Carrefour sees in the Asia-pacific area the ability to develop its activities and to increase its revenue. Their overseas expansion focuses on a few key emerging markets. These markets, which offered growth opportunities, are characterized by the need to have retail structures. Carrefour's marketing strategies is mainly to strengthen its position by increasing the number of overseas store and by cutting prices. The aim is to develop the Carrefour brand worldwide. Thus the challenge is to success the development of the Carrefour network in Latin America, Asia and especially in China.

Nowadays Carrefour has to be confronted to increasingly strong competitors like Wal-Mart or Tesco. Therefore it has to develop international strategies in order to strengthen its leadership position in Europe and to succeed in the American and Asian markets. For that it adds new floor area by new acquisitions, store openings or enlargements. It repositions its prices by practising an offensive price reduction. In addition it adapts and develops new stores' formats in each country. To succeed Carrefour need to learn to know both the Asian and the Latin-American cultures in order to be able to attract these people. The Carrefour's image remains seen as a high added value brand. Thus the group can hope to success in the Asian market.

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