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What strategies does Carrefour use to achieve its strategic aims?

In order to achieve their Strategic Aims, Carrefour would look forward to have the following things in place, 1. Contract Farming 2. Local Sourcing 3. Distribution Centres 4. Logistics 5. Outlets CONTRACT FARMING: Carrefour is already in touch base with some of the farming communities in the country, in its contract farming projects, Carrefour trains farmers on the best practices in agriculture which includes crop management, organic farming, usage of fertilizers, achieve food safety and decrease the hazardous contents. LOCAL SOURCING: Carrefour will be looking forward to procuring its products from all kinds of sources such as food products either in packed or loose format, non-food products from local vendors and other SBU s. DISTRIBUTION CENTRES: Carrefour will set up strategic locations to cater to its retail outlet locations taking into consideration its investment requirements such as real estate, assets and cold infrastructure. Also the distribution centres must be located in such a way that it will ensure efficient and fresh supply of food products to its consumers LOGISTICS: Carrefour can facilitate the development of the logistics management in the country by signing in contracts with the various local partners who can provide modern and refrigerated transportation systems. OUTLETS: Based on the already existing locations of cash and carry outlets, Carrefour can ensure that it can eliminate the high costs that can be associated with the set up of new outlets as this will provide them cheaper and quicker means of procuring their products on time.

What are Carrefour s strengths and weaknesses? STRENGTHS y Wide Market Presence o The company has 6546 stores include 794 hypermarkets, 1495 supermarkets and 3888 hard discount stores besides 194 convenience stores, 175 cash and carry stores along with some mini markets and food service stores. Multi-Format Strategy o The various formats include,  Hypermarkets  Supermarkets  Hard Discount Stores  Convenience Stores  Cash & Carry Stores  Mini Markets & Food Service Stores Strategic Acquisitions Clear Market Leader Diversified client base Effective Marketing & Sales Promotions

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WEAKNESSES y Focused too much on price rather than product differentiation. o In each of its store formats, Carrefour maintains a strong focus on competitive pricing. In the hypermarkets segment, over three quarters of the company s stores offer the lowest or the second lowest prices versus their local competitors. The same is true for the company s supermarkets and discount-stores. During 2004, the company significantly reduced its prices, mainly in dry grocery product and had never concentrated on product differentiation. Decline in profits/operating margin o The operating profit of the company during fiscal 2004 was E4.9 billion, an increase of 0.9% over fiscal 2003. Net profit was E1.4 billion during fiscal year 2004, a decrease of 14.8% from 2003. The operating margin of Carrefour fell from 6.9% in 2003 to 6.8% in 2004. The net margin of the company has declined from 2.3% in 2003 to 1.9% in 2004. The largest decline in profits was experienced in the company s domestic market, France. The company s ability to invest in further growth is inhibited by declining profit. Lack of traditional products People Associate with low quality

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REFERENCES: 1. http://213.194.86.162/Webtools/Basvurular/!webpubpic/file/Carrefour.pdf 2. http://www.scribd.com/doc/51587538/Marketing-Term-end 3. http://yousigma.com/comparativeanalysis/carrefourswot.pdf

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