Carrefour Misadvenure

In: Business and Management

Submitted By jpl29801
Words 501
Pages 3
George Jones
December 7th, 2015
Carrefour's Misadventure in Russia

In 1960, Marcel Fournier and Louis Defforey founded Carrefour. They opened their first store in 1963 and was a big hit due to its lower prices compared to its competition. The store had various items such as self-service grocery, clothing, sports equipment, electronics, and even auto accessories. The size of the store (2,500 square meters) earned it the name “hypermarket”. Carrefour set out to become one of the top three players in every international market they operated in. Carrefour is branched all over the world in Europe, Middle East, Asia, and Latin America. As I analyze this case before wondering about Carrefour’s demise in Russia, I understand why they were attracted to Russia. With such a large population, it would appear that Russia would offer a great consumer economy. Russia has low unemployment, a high level of consumption, great availability for top resources, and a strong current account with minimal public debt. This makes Russia very attractive on paper, but you must also be aware of the cons before making such a leap. There’s a lot of competition, slowing economic growth, high inflation, complicated legislative, and a declining industrial output. To sum it up, Russia was a massive headache for Carrefour. A lot of time and effort went into the smallest of tasks in Russia due to the existing level of bureaucracy that took place in Russia. Russia rejected Carrefour’s bid to purchase ‘Seventh Continent’, which was a major retailer in Russia. This was concerning due to the goal of becoming the leading retailer in Russia. After analyzing the Russian retail market in light of Porter’s five forces model, I do not think the market is lucrative enough to attract more foreign players because the cons outweigh the pros. There are a large number of supplies, but unless a product or service…...

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