Carrefour Case Study
CASE STUDY
CARREFOUR IN ASIA
MANAGERIAL FINANCE
(FIN 745)
EXTERNAL ENVIRONMENT
1. GENERAL 1.1. DEMOGRAPHIC
Carrefour operates in 29 countries around the world. World population is rising, geographic distribution of populations is shifting, world population is aging rapidly, ethnic mixes in developed countries are changing rapidly, and average household incomes are increasing.
The demographic environment presents both opportunities and threats for Carrefour. Increases in population size and household incomes help to expand the market in which Carrefour operates. However, changes in the geographic distribution of populations, due to technological advances in communications, may cause difficulties for Carrefour in determining profitable locations for new storefronts.
1.2. ECONOMIC
In 2004, there was substantial economic growth due to near-record low interest rates in the United States, resulting in substantial growth in global trade. This growth was tempered by high oil prices.
The economic environment presents both threats and opportunities for Carrefour. Growth in global trade presents opportunities for Carrefour in identifying new products and services to offer to its customers. High oil prices, however, threaten Carrefour’s profitability by increasing the costs of transportation for goods destined for Carrefour’s warehouses and storefronts. 1.3. POLITICAL/ LEGAL
Later on, it worked with financial or industrial partners only when national regulations made it necessary, as in China, Thailand, Malaysia, and Indonesia. Foreign ownership laws in Thailand allowed foreign companies – except American companies - to hold no more than 49 percent of the shares. Carrefour argued that this law would favor its rival, Wal-Mart. When the Central Retail Corp. sold its 40 percent shareholding in 1998, this law made it impossible for Carrefour to purchase the shares.
All products within its stores were “halal” in compliance
CARREFOUR IN ASIA
MANAGERIAL FINANCE
(FIN 745)
EXTERNAL ENVIRONMENT
1. GENERAL 1.1. DEMOGRAPHIC
Carrefour operates in 29 countries around the world. World population is rising, geographic distribution of populations is shifting, world population is aging rapidly, ethnic mixes in developed countries are changing rapidly, and average household incomes are increasing.
The demographic environment presents both opportunities and threats for Carrefour. Increases in population size and household incomes help to expand the market in which Carrefour operates. However, changes in the geographic distribution of populations, due to technological advances in communications, may cause difficulties for Carrefour in determining profitable locations for new storefronts.
1.2. ECONOMIC
In 2004, there was substantial economic growth due to near-record low interest rates in the United States, resulting in substantial growth in global trade. This growth was tempered by high oil prices.
The economic environment presents both threats and opportunities for Carrefour. Growth in global trade presents opportunities for Carrefour in identifying new products and services to offer to its customers. High oil prices, however, threaten Carrefour’s profitability by increasing the costs of transportation for goods destined for Carrefour’s warehouses and storefronts. 1.3. POLITICAL/ LEGAL
Later on, it worked with financial or industrial partners only when national regulations made it necessary, as in China, Thailand, Malaysia, and Indonesia. Foreign ownership laws in Thailand allowed foreign companies – except American companies - to hold no more than 49 percent of the shares. Carrefour argued that this law would favor its rival, Wal-Mart. When the Central Retail Corp. sold its 40 percent shareholding in 1998, this law made it impossible for Carrefour to purchase the shares.
All products within its stores were “halal” in compliance
References: Gehlen, C., Jones, N., & Lasserre, P. (2005). Carrefour in Asia. INSEAD. Hitt, Ireland, Hoskisson. (2008). Strategic Management: Competitiveness and Globalization (Concepts and Cases). (8th ed.) Mason, OH: Thomson Higher Education. 81