Carrefour Final Presentation

8/18/2019 Carrefour Final Presentation

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Analysis of the Business

By Rafael Cruz


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Company Snapshot

Carrefour S.A. is a French retailgroup that was founded in 1959.

Carrefour competes against itsrials on the !asis of price"conenience" and customere#perience.


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Company Snapshot

Carrefour is the second largestretailer in the world and its aim is

$to !ecome the preferred retailer%in all of its formats& 'ypermar(ets

)rocery Stores

'ard *iscount Stores

Conenience Stores


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Company Snapshot

Carrefour operates 15"++1 storesin ,- countries and had sales of

/5.,+ !illion in 09.

France2 -,3

4urope e#cluding France62 ,+3

7atin America2 1-3

Asia2 /3

Sales By Region


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84S Analysis8olitical Aspect

8olitical unrest in he :iddle4ast is causing oil prices to

increase. his could cause product costsand distri!ution costs to risewhich would result in decreasedpro;ts.

*eeloping economies haeplaced restrictions on F*< to

protect their domestic retail


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84S Analysis4conomic Aspect

he current dealuation of the4uro will ma(e F*< and importing

more e#pensie for 4uropean!usinesses. his is a threat to Carrefour.

he rising Asian middle class

accounts for appro#imately ,.+trillion in annual consumere#penditures.

his is a potential opportunity


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84S AnalysisSocial Aspect

Consumers are more conscienceof their health and the health of

the enironment. his is an opportunity forCarrefour !ecause it has its ownline of organic foods and it

stoc(s fair trade products. Carrefour has also reduced itsenergy consumption and the

amount of disposa!le plastic


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84S AnalysisSocial Aspect

he Asian middle class is!ecoming more prosperous and as

a result has shifted its diet toinclude more protein. his is a contri!uting factor torising food prices.

his poses a threat to Carrefour.


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84S Analysis echnological

Aspect Social networ(ing sites proidean opportunity for !usinesses

!ecause they can !e used toincrease customer loyalty to their!rand. witter can !e used to inform

customers of special deals atCarrefour stores.

Face!oo( can !e used to create

a community for loyal Carrefour


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84S AnalysisSummary

Factor TrendEvaluation

Impact(1=low;5=ig!

Ran" interms o#importance

8olitical

=nrest in he :iddle4ast .F*< restrictions indeeloping economies.

hreat

hreat

,

-,

4conomic

he dealuation of the4uro.

he rising Asian middle

class.

hreat >pportunit

y

-

5

1

Social

Consumers moreconscience of healthand enironment.Change in Asian middleclass diet.

>pportunity

hreat

, 0

echnological

he use of socialnetwor(ing to increase >pportunit 0 -


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erall the !uyer power is high.


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Conclusions hus

Far Rising oil prices pose more of along term threat. Carrefour can

a!sor! any losses in the shortterm !ut it will eentually hae toinest in further improements toits distri!ution channel. he continued dealuation of the4uro could hae a large impact onCarrefours decision to e#pand

further into international mar(ets.


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Conclusions hus

Far Carrefours rials pose the!iggest threat to its !usiness.

Since competition is !asedmainly on price" Carrefour shouldfocus its eorts on strengtheningits !rand and !uilding

relationships with customers"there!y increasing the switchingcosts for the customer.


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CarrefoursHey Competitors

=.S. Retailer

British Retailer

)erman Retailer

argets lower and middle classconsumers.

argets !usiness consumers aswell as lower and middle classconsumers.

argets middle and upper middleclass consumers.

i


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StrategicBusiness )roups


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)eneric Strategies of the Competition

B r o a

d

E a r r o

w

7owCost

'igherCost

Competitie Adantage

C

o m p e t i t i e S c

o p e

C C i


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Core Competenciesof the Competition

4ery *ay 7ow8rices

Customer 4#perience

Iery Strong Cash J CarryBusiness

>ne way esco enhancescustomer e#perience is throughthe use of its Clu!card whichallows customers to accumulatepoints that can !e redeemed forstore ouchers.

An eKcient distri!ution systemallows them to !e the low priceleader.

A ti


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Assumptionsof the Competition

Customers purchase !asedon price and therefore wantthe lowest price possi!le.

Customers willoerloo( price if thee#perience is

en@oya!le.

8roduct oering must !ee#panded to appeal to a

!roader mar(et.

R


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Resourcesof the Competition

An e#tremely eKcientdistri!ution channel as wellas !eing the L1 retailer in

the world. A loyal customer!ase and the L0retailer in terms of

pro;t.

A strong wholesale armthat gies it the ;nancial

sta!ility to e#pand into new

Fi i l


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FinancialComparison

of the Competition $almart

%arre#our

Tesco &etro'

'nnual Revenue()*n!

09

/+

+,

++

Revenue rowt .93 D1.03 5.+3 D,.+3

+et Income ()&&! 1"1/M

-9-

0",,+

,/,

,ercentInternational Sales 0-.M3 01./3 ,1.13 -.53

lo*al &ar"et Ran"(revenue!

1 0 - ,

lo*al &ar"et Ran"

(pro-t!1 , 0 -


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:ar(et Brea(down

Food Retail

Customer7ocation

=r!anSu!ur!

anRural

Customer ype


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:ar(et Brea(down

here is a food retail format toappeal to each type of customer.

'ypermar(et

• Su!ur!an• 7owerD

middle

class andup

)roceryStore

• =r!an andSu!ur!an

• 7owerD

middleclass andup

'ard*iscounter

• =r!an• Consumer

s that do

not haea lot ofmoney tospend.

Conenience Store

• =r!an andSu!ur!an

• illing to

pay more

Cash JCarry

• Appeals tothe!usiness

to!usinessmar(et


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Brazilian :ar(et

he food retail mar(et in Brazil isworth appro#imately 1MM !illionand is growing at a rate of 1M.93. Food retail accounts for thema@ority of Brazilian retailspending. here is a current shift towards

nonDfood spending that is forcinggrocery chains to carry more nonD

food items.


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Brazilian :ar(et

lympic


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Russian :ar(et

he food retail mar(et in Russiais worth appro#imately 000!illion and is growing at a rate of0.53. he growth rate of householdincome and disposa!le incomes

has declined. he Russian :iddle class iscomprised of roughly 19 million

indiiduals.


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Chinese :ar(et

he food retail mar(et in China isworth appro#imately 055 !illion and isgrowing at a rate of +./3.

he per capita disposa!le income inur!an areas has tripled in the last 1years to appro#imately 0", whichmeans that appro#imately 1M5 million

Chinese are considered middle class. 7iing standards hae increasedleading the Chinese people to pursue ahigher uality of life. he Chinese people spend


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Bra.il

Russia

India%ina

Size of :ar(et !n6 1MM

000

01M

055

:ar(et )rowth Rate 1M.93

0.53

M.M3 +./3

)rowing :iddle Class Oes Oes Oes Oes

:ar(et >pen to ForeignCompetitors Oes Oes Eo Oes

8opulation Size ::6 191 1-, 1"1M

1",

BR


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Social :edia

Social :edia can !e used !y!usinesses to increase customertraKc !y alerting customers ofspecial deals in local stores. his use of Social :edia has!ecome ery popular with the

people of Brazil.


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Conclusions hus

Far almart has esta!lished itself inthe mar(etplace as the low priceleader and will !e ery diKcult to

compete against on price alone. esco has shown that adierentiated approach is

successful in amassing a loyalfollowing. he Cash J Carry arm of :etro

A) is strong enough to support its


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Conclusions hus

Far 4ach of the BR


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Business :odel

8urchasing

•

Carrefourpurchasesin largeuantitiesand atreduced

pricesfromproducersandwholesalers.

*istri!ution

•

Carrefourhas aneKcient"costsaing"distri!utio

n channeltodistri!utethe goodsto itsstores.

Retail

•

Carrefourpassesthesaingson to theconsumer

in theform oflowerprices.


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8erformance

hile sales hae !eenincreasing" pro;ts hae !eendecreasing since 0M.


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*istri!ution of SalesBy Format

0- 05 0+ 0M 0/ 09

5-.3

55.3

5+.3

5M.3

5/.3

59.3

+.3

+1.3

+0.3

+,.3

/ypermar"et

0- 05 0+ 0M 0/ 09

.3

5.3

1.3

15.3

0.3

05.3

rocery Store

Reenue contri!utions fromhypermar(ets and grocery storeshas increased.

hese two store formats comprise the ma@orityof Carrefours retail stores.

*istri!ution of Sales


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*istri!ution of SalesBy Format

0- 05 0+ 0M 0/ 09

.3

0.3

-.3

+.3

/.3

1.3

10.3

/ard 0iscounter

0- 05 0+ 0M 0/ 09

.3

0.3

-.3

+.3

/.3

1.3

10.3

1-.3

1+.3

1/.3

ter

he hard discounter segmenthas seen a ,3 increase oer thepast seeral years. here has !een an 113 decreasein the contri!ution of conenienceand cash J carry formats.



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*istri!ution of SalesBy Region

0- 05 0+ 0M 0/ 09

,/.3

-.3

-0.3

--.3

-+.3

-/.3

5.3

50.3

France

0- 05 0+ 0M 0/ 09

,-.3

,-.53

,5.3

,5.53

,+.3

,+.53

,M.3

,M.53

,/.3

,/.53

,9.3

Europe (e2cluding France!

Sales in the 4uropean mar(ethae !een in decline. he currentdepressed state of the economy is

a contri!uting factor. +93 of Carrefours annual sales are

generated in 4urope.



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*istri!ution of SalesBy Region

0- 05 0+ 0M 0/ 09

.3

0.3

-.3

+.3

/.3

1.3

10.3

1-.3

1+.3

Sout 'merica

0- 05 0+ 0M 0/ 09

.3

1.3

0.3

,.3

-.3

5.3

+.3

M.3

/.3

'sia

Sales in the South American andAsian mar(ets hae !eenincreasing. )rowth in these regions is an opportunity

for Carrefour to increase its mar(et shareand decrease its reliance on the 4uropeanmar(et.


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Hey Assets

'ssets 344 3446 78)oodwill 11.,B 11.5B 03

Fi#ed Assets 1-./B 15B 13


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BC) :atri#

Stars Puestion:ar(s

*ogsCash Cows

Relatie :ar(et Share'igh 7ow

:

a r ( e t ) r o w t h R a t e

'igh

7ow


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Ialue Chain

Analysis 8rimary Actiities& he two mostimportant are :ar(eting and Salesas well as Serice.

Carrefour is a oneDstopDshop for all of theconsumers shopping needs !ut Carrefour isnot perceied to hae the lowest price.8roiding an e#cellent customer e#perience ishow Carrefour maintains mar(et share.

Secondary Actiity& he mostimportant is procurement.

:aintaining a relationship with many dierentsuppliers and negotiating for the lowest price.


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S>

Strengts4#tensie networ( ofsuppliers

Brand is ran(ed in the top;e of most alua!le retail

!randsIery successful priate la!el!rands

$ea"nessesEot (eeping up with competitorsGinestment in Brazil.

7osing mar(et share in 4uropeanmar(et

pportunities

he growing Asian mar(et

he growing South Americanmar(et

Treats

he depressed 4uropean mar(et

accounts for +93 of reenues.Consumer preferences arechanging toward smaller localstores.


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)eneric Strategy

B r o a

d

E a r r o

w

7owCost 'igherCost

Competitie Adantage

C

o m p e t i t i e S c

o p e


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)rand Strategy

Carrefour aims to !e $the preferredretailer% in all of its formats.

Carrefour will diest from a mar(et when it isnot among the top retailers.

4#amples include :e#ico" Russia" Qapan"and South Horea.

Carrefour has !een successful inentering new mar(ets !y forminga @oint enture with an e#istingoperator.

his allows Carrefour to gain information on the

shopping ha!its of the local consumer toensure a successful store.


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Recent Strategic:oes

Carrefour has !een in tal(s to sell its0ia 7 !rand as well as its real estatearm.

his will gie Carrefour cash that it can inestin new mar(ets.

Carrefour is introducing 8lanetCarrefour which is a ery large

hypermar(et that oers customersserices such as coo(ing classes andsnac(ing areas.

Carrefour is trying to gain lost mar(et share !y

improing the customer e#perience.


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Conclusions

Selling the 0ia 7 !rand willnarrow Carrefours targetcustomer !ase which will allow it

to !etter sere its currentcustomers. 4#panding further into the Asian

and South American mar(ets willdecrease Carrefours reliance onthe 4uropean mar(et.


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Conclusions

Carrefour has strong !randrecognition in Brazil which gies itan adantage oer its

competition. By inesting in itsstores" Carrefour can regain lostmar(et share.

Asia shows promise forCarrefour. Carrefour has alreadyhad success and failure in Asia.Carrefour can use what has

Carrefour Final Presentation

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