The Team Members 馬立歐 陳奕光伊詩卉 MA1N0225 M MA1N0246

Largest retailer in Europe Second largest retailer in the world Worldwide sales 85.9 billion € (2009) 15,000 stores in 30 different countries engages in all types of retailing (focus on food retailing at competitive low prices) 2007: – 45.8 % of the sales come from France – 37.5 % from other European countries – 10 % from Latin America – 6.7 % from Asia

3 different types of stores in foreign markets: – Hypermarkets (largest in terms of floor area & stock) – Supermarkets – hard discounters (smallest)

Question 1: Do you think it was the right decision for Carrefour to leave Japan? Could it instead have adopted other strategies that perhaps would have led to a different outcome?

Japan government revoked its Large-Scale Store Law in the 1990s Carrefour entered the Japanese market in 2000 At that time, Carrefour opened 4 stores (Tokyo, Osaka, Saitama, and Hyogo) and 4 more followed in Kansai The plan was to have a total of 15 stores by the end of 2003 BUT was not able to reach this number by 2005

What could have been the reasons for the failure of Carrefour: According to Industry expert: Japanese consumers prefer better quality over lower price Japanese consumers expected more French-style clothing and products from Carrefour At the first few stores, the consumers were not able to easy find the products they needed

Although Carrefour changed its product portfolio it still was not successful in Japan The problem was the strategic alignment of Carrefour (  Low prices) Since Japanese consumers are more interested in products with quality rather than low prices As a result, it was the best for Carrefour to leave the Japanese market because in order to be successful in Japan, Carrefour would have had to change the whole concept

Question2: Carrefour, being the second largest retailer in the world, what are implications of its pull-out from Japan for other global retailers such as Wal-Mart which is struggling to survive?

Slogan: Saving people money so they can live better The largest retailer in the world Operates more than 10,800 retail units under 27 countries 2.2 million employees worldwide 1.4 million in the U.S.A

Low cost, high volume strategy Superior distribution capability (location of stores, superior information management, and cross-docking) Advanced data-mining, IT systems are very advanced Customer oriented workforce Partnership relationship with vendors

from Due to the fact that Japanese consumers are more concentrating on products with quality rather than low prices, these huge retailers should focus on selling products from their origin country

The stores should not communicate their strategy as serving products for low prices Also these stores should be organized very well, that the consumers are able to fin the products they need very fast and easily from

Question 3: Why did Carrefour exit Japan but succeed in China?

Entered the Chinese retail market in 1995 Beginning open less than 5 stores By 2006, operats 73 hypermarkets across 29 cities In 2007, it opened a combined 112 chain stores in China

Did not understand Japanese consumer behaviour (Japanese market was not similar to any other market in Asian) Japanese customer need in samll amount every few days Less price sensitive compared to other Asian countries Japanese customer really care about product quality Carrefour sold ist stores to Japan‘s largest retailer Aeon Co. Ltd.

Low price, excellent service, and comfortable environment immediately well received by Chinese consumer Great timing to enter Chinese market, it is the first foreign-funded retailer in China High level of localization strategy => carried out in term of stocking, service, and institutional organization Headhunting is key localization strategy- great offers to hunt for and cultivate local retail professional