Carrefour Marketing Strategies in Poland - Assignment Example

Report Carrefour Marketing Strategies in Poland Module Module Lecturer: SRN: Word Count: 1957 words Contents 0 Carrefour in Poland 3 1.1 Introduction 3 1.2 Company Information 3 2.0 Results and Discussions 4 2.1 SWOT Analysis 4 2.2 Marketing Plan Strategies in a new country (Poland) 4 2.2.1 Background analysis 4 2.2.2 The country’s legal requirements 5 2.2.3 The risks involved 5 2.2.4 The Technology Practices 6 2.2.5 The mode of entry 6 2.2.6 Products and Price Structure 6 2.2.7 Social and cultural factors 7 2.2.8 The Location of stores (hypermarkets) 7 2.2.9 Management of retail stores 8 3.0 Conclusion 8 4.0 Bibliography 9 1.0 Carrefour in Poland 1.1 Introduction Carrefour is a French multinational retail company, which is the world second largest grocery retailer. It has over 10,000 stores in 34 countries, serves over 2 million clients, and is well known for its hypermarket concept. It has employed over 240,000 people, and it either operates directly or through a franchise. From 1973, Carrefour embarked on an expansion strategy beyond France to other European, American, African and Asian countries. Poland is a vital Centre for the giant corporation and it is known as Carrefour Polska and has about 350 stores out of which 75 are the large hypermarkets. The other smaller stores include supermarkets, convenience stores, and gas stations. The first store was opened in 1997, in Lodz. It also has a mobile service known as Carrefour Mova (Hoovers, 2015). 1.2 Company Information The hypermarket structure has contributed immensely to the success of Carrefour. The company deals mainly with grocery and retail items. The items are as follows; clothing, household items, hardware, perishable and non-perishable food items. The business networks of Carrefour include convenience stores, hypermarkets, online stores, discount stores, supermarkets and electronic commerce. The Carrefour hypermarkets offer a range of services which include: financial service, ATM, parcel holding, Carrefour optical, shopping center to name a few. Carrefour also faces stiff competition in this competitive industry of grocery and retailing from other businesses either locally or internationally based. These competitors include: convenience stores, Wal-Mart, Ahold, Auchan, Tesco, Aldi and grocery stores. What differentiates these chains is their marketing plans strategy. Thus, this report will analyze the strategies it has employed in venturing in this new foreign market, and that has enable it compete favorably and continue making profits. Also it will include a SLEPT analysis of how marketing mix elements and management issues influence its successful productivity (Businesscasestudies, 2015). 2.0 Results and Discussions 2.1 SWOT Analysis The major strength of Carrefour is that it is a hypermarket store well stocked with diverse goods and services, and it is well-known globally. The creation of its brand name products is a probable weakness that Carrefour faces. This is because it is a tradition of customers to the belief that own-branded products are inferior and hence lose trust in the company. Carrefour has potential opportunities for exploring its online stores and expansion in overseas markets. Carrefour also experiences enormous threats and challenges such as it creates much pressure to smaller grocery and retail stores. Furthermore, its need to blend into different countries markets, way-of-life, and competition possess a great challenge to the global company. Some steps Carrefour can take to improve its rating is introducing daycares and fitness areas in its stores. Also, continues its business expansion strategy as well as, offer incentives such as sales promotions so as to lure customers. 2.2 Marketing Plan Strategies in a new country (Poland) 2.2.1 Background analysis Good marketing strategies have enabled Carrefour to remain in the business for long. This has also enable the company provides quality products at relatively low prices with high-grade services to its customers. It has been involved in the carefully analysis of commodity differentiation and the competitive nature of the market. It also does a thorough research on prospective suppliers before embarking on a partnership with them. The Carrefour group in Poland is guided by seven principles of human resources (Carrefour, 2014). The first principle is freedom; the choice of the consumer in regards to any use of its products and services is fully respected. Second, responsibility; Carrefour is liable to its actions and behaviors regarding its employees and customers. Third, sharing; the technology of Carrefour will be used to the benefit of the public, shareholders, and suppliers. Fourth, respect; all customers, workers, as well as competitors will not be undermined by Carrefour. Fifth, integrity; the global corporation pledges to be honest and to fulfill its promises. Sixth, solidarity; every team member in the company should work harmoniously together with vigor. Lastly, progress; Carrefour highly supports and fosters improvement and innovative individuals to facilitate the necessary development needed. 2.2.2 The country’s legal requirements Carrefour first analyzes how to handle best the diversities and business practices existing in the new country. In some countries, it is difficult to set up hypermarket stores due to government restrictions. States usually strive to protect its local businesses from being put out of business at whichever cost, may it be barring potential foreign businesses. This move helps its local economy grow by ensuring that the local businesses are intact. Carrefour is an enormous corporation with capabilities of building a large hypermarket, hence puts smaller local shopping centers at an immense pressure. This may put the smaller locals out of business due to fear of competing with such a well-established entity. Thus, the overall effect of setting up the hypermarket would hurt the community instead of making it progress. Hence, a careful of evaluation of legal affairs in the target has enabled Carrefour set up many successful stores in Poland. 2.2.3 The risks involved The global competitive market of grocery and retails stores is fierce. Every business enterprise seeks to be at the top. The result has been a reduction of prices and innovativeness to give them a better competitive advantage of the other. Thus, Carrefour considers the weather changes and locality settings in its quest for new markets; to ensure it is safe, sturdy and compatible to set up a shop in the area. Environmental conditions such as flooding and volcanic activity may cause enormous damages to the stores hence lead to financial loss. Though entering new territories overseas is an expensive it is a worthwhile venture in the long run. 2.2.4 The Technology Practices The world is rapidly changing owing to the constant evolving of technology. Thus, people are changing their buying behavior day by day. Many people are turning o online shops to purchase the goods they want instead of driving to shopping malls. Using the internet is gaining preference due to its quick nature by eliminating the hustle of queuing, or begin stuck in traffic. This would probably mean that setting up a hypermarket would be a total failure. Thus, Carrefour recognizes the importance of technology in sustaining the productivity of the business. That is why it evaluates the technology trends of the new target market and also regularly incorporates the latest technology in its operations. 2.2.5 The mode of entry The entry mode strategy in a new market is a top priority of Carrefour in its marketing plan to ensure its success. Carrefour uses the conventional model of entry whereby it engages the local players into a joint venture and collaboration. This is then proceeded by consolidation or divestment liable to the growth or stagnation of market dynamics (e.g., performance and market share). Thus through local partnership Carrefour becomes in a suitable position to understand the needs and demands of the consumers. Also, another advantage of joint ventures with the locals is people like to identify themselves with their own. Thus making it entirely foreign would greatly hinder its success. Also, collaborating with local suppliers makes it easier for it to get the fresh groceries that are preferred by the consumers. This also boosts the confidence of the locals in the company as the majority of the employees are sourced locally. However, it is crucial to note that Carrefour maintains a good number of the top management positions. This strategy of incorporating the locals from the supply chain to employees has seen Carrefour manage to successful launch new stores in new markets while the same time is getting sustainable profits. 2.2.6 Products and Price Structure Entering a new market especially in a new country is a challenging factor. There needs to be well-done market survey to ensure that the products introduced are needed and what new thing will you offer to consumers. Thus, Carrefour invests appropriately in the market research division to ensure at its lunch the products and services are accepted. It also lowers it prices and offers various discounts on its products to lure in customers. Its focus is to improve the image and competitiveness of its price. 2.2.7 Social and cultural factors Social and cultural factors are important elements when a business considers setting up operations in a particular area. People have different tastes and preferences of particular goods and services when you move from one place to another. Understanding these cultures is a significant step towards achieving a successful business in an area. Carrefour before embarking on a new territory it carries out a study to understand the localities cultures, in this case, Polish cultures. These involve assessing the type of foods, clothes, entertainment or hardware they might like. It also involves knowing various cultural festivities the community is accustomed to so as to increase supply accordingly when demand is high. The social and cultural values also affect consumers purchasing behavior. Hence, Carrefour initiative of total respect for local cultures has seen its success venture on the Polish market. This has also made it one of the top competitors in grocery and retail items sector. 2.2.8 The Location of stores (hypermarkets) Every business need to have a target group of its products and services in their marketing plan. Thus, the choice of location of the business premises is essential in ensuring that it serves all population of the interest group. Carrefour prefers to set up its hypermarkets close to urban centers especially in shopping malls so as to tap to high-income end customers. The location of their stores in malls is convenient as many people in the urban areas prefer mall shopping rather than in the markets. Consumers prefer one-stop shopping, when they go to a mall they can eat, banking and watch the film. For this reason, the supermarkets are in demand. The malls usually have many services such as cinemas, restaurants, stores and entertainment spots. Thus are real Centers for people to socialize as they do their shopping. Thus, the locality has greatly favored the growth and success of Carrefour in the Polish retail industry. 2.2.9 Management of retail stores The control part of a business is crucial to ensure stability, sustainability and profitability of any business entity. That is why Carrefour incorporates the recruitment of only the top quality managers to manage its stores across the country. To avoid monopolization, the company develops strategies that would ensure it self-identifies with the people of Polish. These include giving some of the top positions in management to Poland citizens and also the majority of the employees of Carrefour Polska are Polish citizens. The involvement of the locals has seen tremendous growth in the company’s revenues since local workers tend to understand more on customers’ needs, tastes, and preferences. 3.0 Conclusion Carrefour has had past successive ventures in many global markets and Poland one such example. Its success in Poland is attributed to its good marketing plan strategies that have ensured it competes favorably with its competitors and still make profits. Carrefour Polska operates with the advantage of location accuracy and selection, where places of stores of Carrefour have been carefully thought of before opening. Other factors that have contributed to its success in Poland include; the understanding of cultural differences, knowing the legal requirements, good management, using the latest technology, and its pricing structure. The concept of hypermarkets where all items are found in one place (e.g. food, drinks, clothes, and accessories) has also boosted its revenue since nowadays many people prefer to get everything under one roof. The careful consideration of social factors, political influences, economic factors, and technological advancements has overall enabled the well establishment of Carrefour Polska. The wide product variety has also allowed Carrefour to adapt to different consumer needs and habits. 4.0 Bibliography Businesscasestudies, 2015. External environmental theory: SLEPT analysis. [Online] Available at: http://businesscasestudies.co.uk/business-theory/external-environment/slept-analysis.html#axzz3XkRylmBG [Accessed 19 April 2015]. This document describes the SLEPT analysis tools which include the social, legal, economic, political and technological factors that influence business operations. It stresses on the importance of knowing the actions of the immediate competitors. Carrefour, 2014. 2013 Annual report: Carrefour, Massy, France.: Carrefour group Communication department. [Online] Available at: www.carrefour.com/sites/default/files/RA_VGB_OK_BD.pdf This report by Carrefour gives an account of some of the achievements of the business entity. It also gives details on some of its global branches in various countries including Poland. The report also highlights the important strategies Carrefour uses to remain competitive in this competitive industry. Hoovers, I., 2015. CARREFOUR POLSKA SP Z O O. [Online] Available at: http://m.hoovers.com/company-information/cs/company-profile.CARREFOUR-POLSKA_SP_Z_O_O.ec506b73e5e02.html [Accessed 19 April 2015]. The website gives a brief description of company information of the Poland branch Carrefour Polska. It also includes key financials, directions and locations. The site is crucial as gives us an insight into the Polish branch composition and structure. Read More