Case-study analysis undertaken at Strathclyde Business School as a course work for a module (Global Operations).

1. Carrefour exits Japan
Group 2:
Kalpdrum Raval
•
• M.A. Vikram Rajkumar
• Tushar Kaul
• Vishal Gholap
Strathclyde Business School Project
3/4/2012 Carrefour exits Japan

2. Agenda
• About Carrefour
• Japanese Consumer behaviour
• Carrefour Business Strategy
• Carrefour Operational Strategy
• Pattern of Behaviour
• Alternative Strategies
• Japan after Carrefour
• Carrefour after Japan
3/4/2012 Carrefour exits Japan

3. Carrefour Group
• World second largest retailer and largest in
Europe
• Presence in 34 countries – over 57% turnover
derived from outside France
• First international venture in 1969 in Belgium
• Unsuccessful in Japan
3/4/2012 Carrefour exits Japan

4. Japanese Consumer Behavior
• Frequent shopping in small quantity
• Fashion conscious
• Not price sensitive compared to other Asian
countries
• Importance on quality
3/4/2012 Carrefour exits Japan

5. Business strategy
• EDLP
• To provide one stop shop option
• To develop the capital employed in store formats
3/4/2012 Carrefour exits Japan

6. Operational strategy
• To gain purchase synergies through
procurement of products from local whole sellers
• Multi-store format strategy
3/4/2012 Carrefour exits Japan

7. Order Winning Criteria
1 Low Price
Convenience
2 (accessibility and product
width-depth)
3 Product Quality
3/4/2012 Carrefour exits Japan

8. Operational Strategies - Analyzed
Operational Strategies in Japan
Procurement from local Multi-store format
wholesalers

Fit 
Focus  
Sustainability  
Risk  
3/4/2012 Carrefour exits Japan

9. Pattern
Ignorance of Ignorance of non-
available coformance to
Failure to adapt market market assesment
to changes knowledge criteria
Exit from
Japan
3/4/2012 Carrefour exits Japan

10. Change in order winning criteria
1 Low Price Product Quality
Convenience
2 (accessibility and product Innovation
width-depth)
Convenience
3 Product Quality (accessibility and product
width-depth)
3/4/2012 Carrefour exits Japan

11. Alternative Strategy 1: Enter Japan with
Local Partner
Rationale: Strong supplier bargaining power in Japan and gaining local market
know-how
• Local partners facilitates in dealing • Hindrances in reaching
with the Japanese supply chain synergies between Carrefour’s
• Provides Carrefour opportunity to corporate culture and local
understand the Japanese market partner’s corporate culture
• Flexibility in adapting to the
changing consumer needs
3/4/2012 Carrefour exits Japan

12. Alternative Strategy 2: Multi-Store Format
with Small and Medium Stores
Rationale: Japanese consumer behavior & Proximity of stores
• High Return on Investment • Constant need to
• Stores will be in close proximity for differentiate/innovate due to
Japanese Consumers strong local market competition
• Wide range of Products(product • No EDLP advantage
depth/width)
• MSF will allow Carrefour to enhance
3/4/2012 Carrefour exits Japan
Japanese consumer experience

13. Alternative Strategies
Strategies in Japan
Enter Japan with local Multi-store format with
partner small medium sized stores
Fit  
Focus  
Sustainability  
Risk  
3/4/2012 Carrefour exits Japan

14. Japan after Carrefour
• GMS goes extinct1
• Increasing popularity of convenience stores and
specialized supermarkets chains2
• Japan retail floor area grew by 3% in 20053
1. The myth of Wal-Martization: retail globalization and local competition in Japan and Germany (2006) by Aoyama and Schwarz
2. Oligopoly and the structural paradox of retail TNCs: an assessment of Carrefour and Wal-Mart in Japan (2007) by Aoyama
3. Seiyu (2005) by Shukan Daiyamondo
3/4/2012 Carrefour exits Japan

15. Carrefour after Japan
• More adaptive to local situation in its operation:
China: Hard Discount stores (156 stores)
Taiwan: Hypermarket (62 stores)
• Product supply depending on the demand of the market
• Carrefour Tesco integration – 45 hypermarkets (July 2006)
in Taiwan
• 100th Carrefour hypermarket was opened in Shaozing
3/4/2012 Carrefour exits Japan

16. Critical Reflection
• Business/operational strategy = Market
demands even when business strategy ≠
operational strategy
• Regional not global irrespective of AAA priorities
and regional leadership strategies
3/4/2012 Carrefour exits Japan

17. Thank you
3/4/2012 Carrefour exits Japan