Entry strategy for Carrefour for entry into the UK market

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With the famous take-over of Notre in Argentina, the largest food retailer in that country, Carrefour gained a large market share of the South American market. Carrefour offers groceries and consumer goods at the retail level in three formats; these are hypermarkets, supermarkets and discount stores.

Apart from these channels of distribution, the company also uses convenience stores, foodservice stores and online virtual markets. It has over 6, stores in the whole world, with over hypermarkets, supermarkets and over discount stores. Apart from the consumer goods and groceries, the company also has brands like firstline, destination saveurs, produit Carrefour, topbike, filiere qualite Carrefour, reflets de france, GB bio and Carrefour Bio. It has been on a steady increase economically since at a rate of 3. The company currently employs more than , employees, showing its growth capacity.

Based on the above analysis, the company has the financial and technical capability to expand and grow. For the company to enter the UAE market, it needs to consider internationalisation factors and look at the market they intend to enter.

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This is because despite the wide experience they have in international markets, the UAE market is unique and different. For this reason, an international market entry mode that is designed for UAE will be developed. The aim is to give the company a competitive advantage within the UAE which already has domestic and international businesses that specialise in the groceries and domestic products market. Looking at the social environment, the company must face customer preference determined by social factors Foley Currently in the European and the international markets, the retail industry is facing a market that demands for branded goods and quality products.

For this reason, there is an increase in demand for the retail stores to offer customised products and services to consumers. At the same time, the consumer prefers to shop in a one-stop shop where they can fuel, bank, eat out, do laundry, see a chemist and do the grocery shopping. For this reason, hypermarkets are in demand.

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3. Entry strategy for Carrefour for entry into the UK market.

At the same time, more and more customers from the East and Arab countries are increasingly doing their shopping from retail stores and especially malls. There is change in the fashion world in which the domestic customers would prefer shopping in their neighbourhood market and finding quality and good services Jenster and Hussey In the grocery arena, the consumers are increasingly demanding fresh and whole products straight from the farm.

With the increased awareness on health, more people are demanding for whole healthy foods with the ingredients label showing the amount of calories and nutritional value. Such factors are seen not only in the Western markets but also the Eastern markets too.

At the same time, there is an increase in the size of the population; this means that the overall market segment will increase in size for the retail sector. The UAE society is increasingly encouraging women to work and contribute to the income of the family.

For this reason, more women have seen an increase in their economic and financial position. Since it is mostly women who do domestic shopping, this provides a good target market for Carrefour. The legal climate is continually changing around the world. These rules and laws are only applicable within those countries that signed the European treaty. However for countries that are not in the European region, they have to deal with the local laws and regulations. The company also has to consider the diversity of the Western and Eastern legal systems. As they try to enter the UAE, they will face a legal system that is different from that of the Western world.

This is because the UAE is a region that is increasingly encouraging trade, and for this reason some red tape has become lax. However, it is a system that is still under the influence of the UAE monarch and Muslim religion. These laws require businesses to respect the customers, to follow certain religious days, festivals and employment laws that prevent women from working at night and for more than eight hours in a day.

The same law also requires employers to give health and safety measures for the employees. For this reason, women employed must be given maternity leave with pay for three months. The economic factors at play currently for this company are the effects of the global recession. The economy will affect how the market fluctuates, booms and slumps. First of all, the recession affected the interest rates in the whole world. The credit companies pulled out their financing while those that did finance had high interest rates.

The cost of production, and consequently the prices of every good and service, increased. In the long run, many companies have been forced to cut back through mass termination of employees and pay reduction.

[Pub.75AKj] Entry strategy for Carrefour for entry into the UK market PDF | by Andre Schroeder

This was the situation of the world market in the late , and Though the economy is slowly improving, many domestic customers are still tightening the belts. This is because unemployment in many countries is still high, and the income for many households has reduced. In the process, the prices of crude oil, prices of daily commodities and groceries have gone up due to inflation. It is never advisable for any business to expand when the interest rates are high or when the demand for goods and services is low.

For the case of Carrefour, the market is currently recovering slowly, with many countries trying to bail out their core industries. In the process, many households prefer to spend money on the basic items like food and drinks.

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It is for this reason that Carrefour still has recorded profit during the recession period. Therefore, there is still a market demand for foods, drinks and all groceries in the retail industry in any part of the world. They need to completely take into consideration market forces influence by the economy Foley Looking at the eastern market, the UAE still has a stable economy; for this reason, the consumer spending power is not reduced.

Furthermore, with more women working too, there is a big market share for the grocery retail industry. The UAE is presenting a flourishing economy for the retail industry. The economy provides the best business friendly environment. The political factors affecting Carrefour are still diverse; this is because the company has many retail stores in various countries around the world.

For example, they are under the influence of the policies and laws set up by the European Union in the EU region countries in which they operate in. They will also experience different policies and legal changes in the UAE due to the political system. The UAE market has a monarch that has influenced the decision to make Dubai a free trade zone. The region offers the best place for business with various advantages like zero corporate taxes and few trade barriers.

The government has made sure that their transportation system is good, making it the most superior in the region. It has been characterised by low political risks, few transfer risks, and strong economic growth as it is ruled by a monarch. There is diverse change in technology that is affecting the retail sector too Root For this reason, many international and domestic retail stores have to open up a website to interact with their customers. Toward this stride, Carrefour also has a website that showcases their stores, products and services and their social responsibility.

On the other hand, there is an increased use of electronic equipment and telecommunication which has improved and eased international business. The company is able to share information with its various branches and offices through the internet, the telephone, video conferencing and satellite phones.

Therefore for Carrefour to be established in the UAE market, they need to take those factors into consideration. They will need to look at their present external environment as elements that may prevent the UAE market from accepting them. They also need to make use of the information pertaining to the UAE market in order to produce the best business strategy Root