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Carrefours Exit from Japan - Case Study Example

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Carrefours Exit from Japan

One of Carrefour's criteria for entering a new market is that small-scale rationalization and reorganization were not in effect and that large-scale chain supermarkets were absent from the market. However, at the time of entry, Japan already had large-scale special discount stores for clothing, electrical appliances or furniture. With strong competitors in the market, it would have been difficult for Carrefour to establish a strong entry presence.
When Carrefour entered the Japanese market, the real estate prices were high. Carrefour's global store strategy of obtaining a large amount of floor space at low price to provide wider space, free parking and one-stop shopping options for its customers did not meet its objective.
Another Carrefour marketing criteria was to offer fresh products at very low prices and with high-value additions and an array of choices. After entering the market, the company followed its basic strategy of purchasing directly from the producers to keep buying costs low. However, the concept of "Everyday Low Prices" was not feasible in Japan as the customers were accustomed to frequent shopping and buying goods in smaller quantities to because of space restraints at home. Also, the Japanese were also very quality and fashion conscious and low pricing products did not convey that message.
When Carrefour entered the Japanese market, they were wholly-owned. ...Show more

Summary

Carrefour's strategic problem was that they did not fully take into account a few important realities like the Japanese consumer behavior, the changing fashion trends in Japan, not having a Japanese partner, and the loss of trust in the company and its brands.
Author : qcummerata
Carrefours Exit from Japan essay example
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