Array Analysis

Array analysis is a tool to estimate a company's standing as compared to its competitors in a

particular sector. For our case, the biggest competitors for food and beverages market of
Carrefour are Lidl and Aldi. The comparison is done on the basis of certain key factors that
are substantial to succeed for a company in that sector. These factors are rated(0 to 1)
according to their significance and then a company is graded according to its position with
respect to the specific factor. The array analysis for Carrefour and its main competitors Lidl
and Aldi is given below.

A R R AY A N A LY S IS
C AR R E F O U R ALDI L ID L
C ritic a l S u c ce s s W e ig h t R a tin g S c o re R atin g S c o re R a tin g S co re
F a cto rs
Q ua lity o f P ro du cts0.2 4 0.8 4 0.8 3 0 .6

Va lue fo r M o ne y 0.2 3 0.6 4 0.8 4 0 .8

P roxim ity to the 0.2 3 0.6 2 0.4 4 0 .8
C on sum er
P ro du ct P ortfolio 0.1 5 0.5 3 0.3 3 0 .3
S e rv ice & 0.1 4 0.4 3 0.3 3 0 .3
C o nve nien ce
M a rketing & 0 .05 4 0.2 3 0 .15 3 0 .1 5
A dve rtise m e nt
P e rce ived B ra nd 0.1 5 0.5 4 0.4 3 0 .3
Va lue
C u stom er Lo yalty 0 .05 4 0.2 3 0 .15 3 0 .1 5
To tal 1 3.8 3.3 3 .4

*The weights assigned are subjective and based on the data collected through primary and
secondary research.

From the array analysis we can conclude that the primary concerns of consumers while
visiting a food and beverages store are perceived quality of the product, the value for money
the product provides and the proximity of the store to the consumer. These are the major
criteria for a consumer to visit a store. The other key factors are the diversification in the
product portfolio of the store, the after sales service provided by the store, the brand image of
the store. There are certain other factors also which are on the mind of consumers before
visiting a store such as Marketing campaign run by the store and the ease of shopping inside
the store.
Now, as evident from the array analysis, Carrefour has a very high score on quality of
products and the product range it provides. While, Aldi and Lidl are seen as a better store
considering the value for money by the products and the location of the stores. But when seen
the overall score Carrefour is leading on the critical success factors then its immediate
competitors Aldi and Lidl which ironically is in contrary with the current market situation.
The sales data as available for the food and beverage range of the stores has indicated that the
store is losing its market share in the last few years to Lidl, Aldi and other small chains
coming up like Super U.

The explanation of this contradiction, based on the primary research, is that the buying habits
of consumers when visiting a store are relatively random when compared to what they
perceive about the store before entering it. Also, the mystery shopping and chatting with
randomly selected customers inside the stores has shown that the major decision criteria for
the daily shoppers is based on the price offering of the product. Infact, buyers even are not
shy of putting aside the brand image of a store and go for the most visible and price lucrative
product.

IFAS Analysis

The IFAS analysis for the three companies has been done separately considering the
secondary data available through the Retail Magazines and previous reports prepared by
various consultancy organizations. The strength and weakness of the three companies differ
according to their business model and core competencies. Thus the IFAS has to be done
separately.
 ALDI Weight Rating Weighted Score

STRENGTH

Hard discount model 0.15 4 0.6

Low cost small stores 0.15 3 0.45

High quality at a low price 0.25 4 1

Warranty Aldi (ALDI News items) 0.1 3 0.3

W EAKNESS

Brand Awareness 0.1 2 0.2

Customer Loyalty 0.1 1 0.1

Limited product portfolio 0.1 2 0.2

Paternalistic Style 0.05 2 0.1

TOTAL
1 2.95

The analysis shows that Carrefour has evident advantages over Lidl and Aldi when we
consider Economies of scale, brand awareness and their multiformat presence. But it also has
some weakness which it needs to work upon. The significant ones are high cost of expansion
and high maintenance cost due to its large stores and huge inventory. The other weakness is
the dependency on French market to a huge extent. This was evident from the fact that when
there was a slow down in the french economy Carrefour was the biggest loser while Lidl and
Aldi managed to get away with it because of their footholds in other countries as well.

The main strength of Lidl and Aldi is their hardcore discounted model that they have
incorporated in their business model. Also they both have smaller stores thus they don't have
to incur a huge investment for opening a new store. Although the IFAS analysis of Aldi and
Lidl one with an idea that they both have same business model but there is a major difference
in their business strategy. While, Aldi makes a product pool on the basis of quality and then
select the product having the lowest price from that pool for its stores. Lidl, in contrary makes
the pool of product on the basis of price and then selects the product having the best quality
out of that pool. Apart from this the other strengths of Aldi and Lidl are warranty programs
and lesser number of SKU's respectively.

Amongst the weakness for Aldi and Lidl the main ones are their low score on brand
awareness as the french people are still not so much passionate about these foreign brands,
their lack of customer loyalty programs and their high dictatorial style of management. This
means that management at Lidl and Aldi are not so open to feedback from their staff and
customers. Lidl amd Aldi both have a very limited product portfolio which sometimes work
to their disadvantage as well. Apart from these there are also some quality issues commonly
asscoiated with Lidl.

Thus on the basis of this IFAS analysis we again have Carrefour as a clear strong hold in
between the three companies, which contradicts with the current market condition. So, lets do
the EFAS analysis and see if that can help us explain this paradox.

EFAS Analysis

The EFAS analysis has been done for Carrefour in one place and Aldi and Lidl together at
other. That is because the business model and size of operation is completely different from
Carrefour from other two, which almost follow the same business model.

Carrefour Weight Rating Weighted Score

OPPORTUNITIES

Growing food and beverages market in

0.15 3 0.45
France
Demographic Diversity 0.15 3 0.45

Latest Technology 0.1 4 0.4

THREATS

Heavy Price Competition 0.25 2 0.5

Wal-mart can enter france 0.1 4 0.4

Liberalization of Laws 0.15 2 0.3

Not much scope for acquisition 0.1 2 0.2

TOTAL
1 2.7
This analysis shows that the opportunities for Carrefour are the growing food and beverages
market in France, which grew by almost 3% and is forecasted to grew even more in the
forthcoming years. Also, the inclusion of technology in business by big players outside
France can also be done by Carrefour as well. But, the biggest threats to Carrefour's business
is the chances of Walmart making an entrance in France. Also with the liberalistaion of
government policies the implictaions on foreign players to enter french market are uplifted to
a great extent, which is again a threat for Carrefour.

Then the opportunities for Aldi and Lidl are similar. They both can take advantage of the
growing market in France. Then they both can introduce customer loyalty programs in their
business structure to create brand awareness. Also, the threats for Aldi and Lidl is the
potential chances of entrance of Walmart in France. Also, if the government of France
decided to tighten their trade policy for foreign players, these two will suffer badly.

Thus after analysing the external factors we can conclude that while Aldi and Lidl are doing
good to capture on the opportunities and mitigate the threats from external environment.
While Carrefour is lacking in this aspect, thus it is not foreseeing the danger to its market and
is following a complacent policy which might be the reason for the loss of market share to
Lidl and Aldi.