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Carrefour Misadventure in Russia - Case Study Presentation

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A presentation on the case study of Carrefours MIsadventure in Russia in 2009

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Carrefour Misadventure in Russia - Case Study Presentation

  1. 1. MISADVENTURE IN RUSSIA BY: HASAN FEHMI GENCER & HAJRA KHAN
  2. 2. OUTLINE 1. CASE BACKGROUND 2. CARREFOUR BACKGROUND 3. CARREFOUR HISTORY & EXPANSION 4. INFORMATION ON RUSSIA 5. OPENING STORES IN RUSSIA 6. WHY CARREFOUR FAILED IN RUSSIA? 7. SUMMARY 8. QUESTIONS?
  3. 3. CASE BACKGROUND  We will be discussing about the unsuccessful attempt by Carrefour to enter the Russian market.  Carrefour suddenly announced its withdrawal from investment in Russia and selling the business.
  4. 4. CARREFOUR BACKGROUND • Carrefour was founded in 1960. • Number 1 retailer in Europe and 2nd in the world. • As of December 2008, Carrefour group operated 15,430 stores in more than 30 countries. • Carrefour’s revenue was 108 billion euros sales incl. VAT for the year 2008 • 374,478 employees worldwide • Carrefour has branches located in Europe, Latin America, Middle East, and Asia.
  5. 5. CARREFOUR 1960 . CARREFOUR 1963  Carrefour opens its first supermarket in Annecy, Haute-Savoie.  Carrefour invents a new store concept: the hypermarket.  The first Carrefour hypermarket opens in Sainte- Geneviève-des-bois, with a floor area of 2,500 sq.m, 12 checkouts and 400 parking spaces.
  6. 6. CARREFOUR 1970 . CARREFOUR 1985  Carrefour shares are listed on the Paris stock exchange.  Carrefour brand-name products are introduced.
  7. 7. CARREFOUR 1993 . CARREFOUR 2006  Carrefour opens its first hypermarkets in Italy and Turkey.  Carrefour disposes of its assets in Korea, the Czech republic and Slovakia.
  8. 8. CARREFOUR EXPANSION Carrefour International Expansion 1998 – Chile*, Colombia, Indonesia 1999 – Czech Republic*, Slovakia 2000 – Japan*, Dominican Republic 2001 – Romania, Switzerland** 2002 – Egypt 2004 – Saudi ARabia 2005 – Algeria 2006 – Cyprus 2007 – Jordan, Kuwait 2008 – Bahrain 2009 - Iran, Syria, Morocco, Bulgaria, Russia 1969 – Belgium 1973 – Spain 1975 - Brazil 1982 - Argentina 1989 - Taiwan 1991 – Greece, Cyprus 1992 – Portugal 1993 – Italy, Turkey 1994 – Mexico*, Malaysia 1995 – China 1996 – South Korea*, Thailand, Hong Kong* 1997 – Singapore, Poland
  9. 9. INFORMATION ON RUSSIA  14 Russian cities had a population of over 1 Million; Largest country in the world.  2008 retailing industry in Russia was valued at $480 Billion (27.5% growth over the previous year).  Food retailing accounted for 45.3% of the total retail sales  2002 – people in Russia spent 94% of their monthly earnings and unlike US, they were free of mortgages and lived with family.  2009 Russia was the fastest growing consumer economy in Europe.
  10. 10. CARREFOURS INVESTMENT IN RUSSIA First Store in Moscow  Opened on 18th of June 2009  Carrefour invested 8.8 million euros  Sold 15,000 food items and 30,000 non-food items  8,000 square meters  59 checkout counters  450 staff Second Store in Krasnodar  Opened on 10th of September 2009  Carrefour invested 8 million euros  8,500 square meters  350 staff
  11. 11. WHY CARREFOUR FAILED IN RUSSIA?  Carrefour exited Russian market on October 15 2009 just four months after their opening; reasons for their exit being the following: I. TARGET WAS TOO BIG II. LACK OF ACQUISITON OF SEVENTH CONTINENT III. COMPETITORS WERE TOUGH IV. POOR BRAND RECOGNITION AND PRICES V. SHAREHOLDER PRESSURE VI. INSUFFICIENT MANAGEMENT TALENTS VII.BUREAUCRATIC HASSLES VIII.POOR ECONOMIC CONDITIONS
  12. 12. COMPETITOR S IN RUSSIA
  13. 13. SUMMARY  We believe Carrefour may have not given their investment enough time and they backed out too soon.  Carrefour’s strategy for the Russian market was flawed, according to a senior analyst.  And their target was too big; although they had started their research earlier in mid-1990s by opening a representative office in Moscow, and exited the country during the 1998 financial crisis. In June 2006, Carrefour again started contemplating on whether to enter the Russian retail market and sent a delegation to tour across Russia for locations, to meet local officials and interact with other retailers.  Overall Carrefour did enter the market too late, their international and national competitors were already way ahead.
  14. 14. QUESTIONS

A presentation on the case study of Carrefours MIsadventure in Russia in 2009

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