Carrefour's Entry into China

Carrefour’ entry into China

Key Points Discussed:

Carrefour, based in France, is the second largest retailer in the world has two divisions: Carrefour Supermarket and Grand Magasins Carrefour. They then experienced growth in the European and Asian markets, the move to which was triggered by the government regulations which were passed in France.

In order to further elaborate on the strengths in the China market, we applied the Eclectic approach of Dunning.

Decentralized Structure -: The Decentralized structure of Carrefour gave the store managers a hands on approach and the authority to take decisions according to the local business needs. Even though the company went through a rough patch due to the corruption charges at certain stores due to the mishandling of the authority granted to the managers, it was able to overcome this by forming special teams to conduct surprise checks to ensure quality.

Located in densely Populated areas -: The Chinese market demanded that the store locations be in the densely populated areas giving easy access of small quantities of goods (daily groceries) to customers.

Expansion Through hiring of local talent -: Carrefour was able to advance their expansion agenda by going directly to the regional and local governments with promises of increasing tax revenues and employment in their respective regions.

Local Procurement -:  Skill building for suppliers in the form of training programs essentially for ensuring food safety. They also improved their supply chain management system, thus improving their efficiency.