Carrefour Part 4 Strategies

Carrefour adopted several good strategies that contributed to their success in China. They placed a strong focus on their pricing strategies, choice of location, supplier control, localization, and their supply chain management. In order for Carrefour to reduce operational costs and enhance their product line, they adopted a system, the Global Procurement System, in which centers were obtained to find low cost suppliers for the company’s hypermarkets around the world. As China’s products grew in quality and price, consumer consumption grew significantly as well. Originally Carrefour divided its operations into five regions throughout China. Each of these operations was independently sourcing from different suppliers in order to seize the market as quickly and efficiently as possible. As the number of subsidiaries increased, Carrefour changed its decentralized buying system into a centralized one and integrated this with its Global Procurement System. By 2005 Carrefour had established eleven regional GPC’s across China. To ensure their customers of the quality of their products, Carrefour had set strict criteria when their suppliers were selected. Their suppliers should have the authorization for export, suppliers should be able to react to the changing market environment quickly, delivery must be on time, products must have competitive pricing advantages; these rules are naming a few. Since the beginning Carrefour has followed numerous operational strategies such as selling commodities at a discounted rate, reducing the number of procedures and costs of the supply chain, expediting the return on investment as well as quickening stock turnover to reduce inventory costs. Overall they were offering their consumers a lower price then their competitors. In order for Carrefour to be able to offer their consumers a substantially lower price, they had to push for their supplier’s profit margins and reduce needless expenses. In the 1930’s the first supermarket was