1. Carrefour & Wal-Mart’s Global Expansion
Group 4: Kieu – My – Duy

3. Introduction Largest retailer in Europe
Second largest retailer in the world
Various retail business
22nd of the top Fortune 500 companies
11,000 stores
420,000 employees
More than 30 countries and areas

4. US Carrefour: FAILED The stores too big and to overwhelming
1988: first US hypermarket was opened in Philadelphia
1991- second hypermarket in New Jersey
1993- Carrefour closed two stores in America
The stores too big and to overwhelming
Although the product assortment was very broad, there was little depth in some product categories, for many products, only one brand or one flavor was available

5. But why hypermarket thriving elsewhere?
The megastore concept is viewed as a welcome innovation, even though many customers feel loyalty to traditional family owned stores
Offering free parking in spacious lots, a lure to shoppers in countries where parking spaces are in short supply
More women enter workeforce, they have less time to shop
While US shoppers can choose from many discount stores and supermarkets, consumers in other countries find that hypermarkets are the only convenient alternative to shopping store to store.

6. Global strategy
Changed the names of hundreds of Promodes Pryca and Continent stores in Spain and France to Carrefour
Carrefour has pulled out of Japan, Mexico and South Korea while establishing a presence in markets with stronger potential such as China and Brazil
Expansion plans unveiled in 2006 called for opening 100 new stores each year through App. ¼ of the new stores will be in China

7. France Carrefour
Recently, facing intense competition from Aldi and other so-called “hand discounter” chains
New chief executive “to get France right”: henceforth, a major part of bonuses would be based on price competitiveness.
Inplemented across the board low prices
2005: Profit decline, but sales and market share increased
Improving service in an effort to win customers from specially stores. Stores that were understaffed have added more personnel
More flexible approach to store size and design; it is trying new formats such as “Mini-Hyper” and “Carrefour Express”, a scaled-down supermarket.

9. Strengths World’s second largest retailer
Most internationalized retailer
World leader in hypermarkets
World’s sixth largest discounter
Early mover into many emerging markets
Strong brand in many markets
Envialbe own-label portfolio

10. Weaknesses
Has consistently underachieved ist own ambitious growth targets in many countries
Failed to live up to pre-merger expectations in terms of projected benefits
Still has an unwiedly portfolio of stores in some countries – e.g. France and Belgium
E-commerce development has been lacklustre
Dearth of local management/ expertise in some markets

11. Opportunities Organic expansion in existing markets
Acquistition of vulnerable local players
Entry into new markets, especially in Asia and South America
Possible entry into selected Eastern and Central Eropean markets
Launch and expansion of supermarket and discount store operations in markets where it already has hypermarkets
Possible major acquisition in more mature market

12. Threats
Continuing intensification of competition within more developed markets, especially in Europe
Economic problems in South America may lead to downturn in trading environment
Ambitious international expansion plans of major rivals such as WalMart and Tesco
Greater legislation in emerging markets to limit influence of foreign-owned large stores
Potential hostile takeover due to low share price

14. Wal-Mart’s Global
The world's largest public corporation by revenue in 2008.
A variety of different retail formats (discount stores, supercenters, and Sam’s club)
Reach around the world with “assault” and “invasion” words to describe for a nation company sights.

15. North America
In 1991,Mexico was the first foray outside of US ,with the name “ Cifra SA”, largest retailer.
The new enterprise is called “ Walmex”
1994, entered Canada with 122 stores Woolco chain.
In 1995, teamed up with “Lojas Americanas SA”
In 2000, was operating 12 supercenters, 8 Sam’s club in Brazil, 11 supercenters in Argentina.

16. South America Carrefour was a big competitor for Wal-Mart.
Deals with French’s manufactures for leading local brand.
Hired local managers to develop the right product
Create the entire family shops together.
Had to adjust the approach of its Sam’s club warehouse stores.
Forced to break down bulk quantities into smaller packs or sell individual items.

17. Europe market
Wal-Mart wants to create a unified pan- European distribution system that will enable it to purchase centrally, distribute centrally, and thereby drive costs lower. Instead, it wants to bring to Europe many of the efficiencies it obtains in the US.

18. Europe market
A common currency in Europe creates an opportunity to unify retail distribution in a manner similar to what exists in the US. While pessimists point to the multiplicity of cultures and the need to offer different sizes and packaging, this ignores the potential impact that a truly pan- European retail giant could have on suppliers. If Wal-Mart, or another large player such as Metro or Carrefour, requires a big supplier to harmonize product sizing and packaging, that supplier will cannot refuse.

19. Europe market
At first, Wal-Mart look for opportunities in France and Germany foremost, but also consider acquisition opportunities in smaller countries (Switzerland, Belgium…) to name a few. And now, it has become clear that Wal-Mart has already had discussions with most of the major players on the continent.
Wal-mart in Germany is estimated to generate about $3 billion in annual revenue.

20. Europe market
Every day low pricing is Wal-mart’s pricing strategy. This means consistent prices with little promotional activity.
To compete with other big competitors such as Carrefour or Metro, Wal-Mart bases on everything but price. This could mean placing greater emphasis on high margin goods (such as fresh foods, gourmet items, prepared foods, and houseware) and on customer service

21. Asia market
In 1990s, Wal-Mart started to expand abroad and entered China in 1996, Korea in 1997, and Japan in 2002.
In China, Wal-Mart operated, and aggressively expanded, its retail business in partnerships, joint venture partners and suppliers.

22. Asia market
In 2002, company invested in Seiyu, a prominent Japanese retailing chain.
Throughout, Wal-Marts has been engaged in tough competition with other global and domestic retailers in Asia

23. Question 1: Which of the market entry strategy options identified in figure below has Wal-Mart utilized in its global expansion?
Discount Stores
Supercenters
Sam’s Clubs
Neighborhood Markets
Argentina 11
Brazil 12 8 2*
Canada
213
China 20 4 2
Germany 94
Korea 15
Mexico
472** 75 50
Puerto Rico* 9 1 33
United Kingdom
248 10
Total
942
238 71 37

24. →→ big help for company to expand around the globe.
Question 2: What are the keys to wal-Mart’s success in the US？Will those factors help the company as it expands around the globe？
With a high familiarity Candadian customers and have a monetary system that is similar to the American one.
To hire local managers to develop the right product assortment and to keep a merchandising approaches with local customers.
→→ big help for company to expand around the globe.

25. Question 3: How do the ways in which Wal-Mart creates utility for buyers vary in different parts of the world?
It consolidated distribution, introduced leading edge technology to track inventory, linked its distribution system directly with suppliers, and by purchasing in volume, it created leverage with its suppliers. The result was a low-cost operating model that enabled relatively low prices.
It invested in its employees, worked to engender their enthusiasm, empowered store managers and compensated them accordingly, and instilled in all staff an obsessive desire to satisfy customer needs. The result was a chain of stores notable for their attention to customer service.

26. Q1: what is the biggest competitive threat facing Carrefour as it expands in global markets?
Continuing intensification of competition within more developed markets, especially in Europe

27. Open a Daycare inside Carrefour
Q2: Carrefour is currently the top global retailer in China. What must it do to maintain its leadership position as Wal-Mart expands operations there?
Open a Daycare inside Carrefour
Incorporate a fitness area into the store for white- collar groups
Discover more sales promotions to attract customers.