Carrefour in Taiwan
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Case Details:
Case Code : BSTR281
Case Length : 15 Pages
Period : 1989-2007
Pub Date : 2008
Teaching Note :Not Available
Organization : Carrefour
Industry : Retail
Countries : Taiwan
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Background Note
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Carrefour was founded in 1960 by two entrepreneurs, Marcel
Fournier (Fournier), a textile retailer, and Louis Defforey (Defforey), a wine
and food wholesaler from Annecy in Eastern France. The first two stores that
they opened were highly successful.
In 1963, a 2,500 square meter store was opened in Sainte-Genevieve des Bois, a
Paris suburb. It was Carrefour's first hypermarket. In 1970, the company's
shares were listed on the Paris stock exchange. By 1971, Carrefour was directly
operating 16-wholly owned stores, with an equity interest in five more stores.
It also operated through franchises...
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Entry and Expansion in Taiwan
In the late 1980s, Carrefour decided to further expand its
global operations. Asia was attractive owing to good growth prospects in the
region. Carrefour considered several markets like Hong Kong, Singapore, South
Korea, Japan, and Taiwan from which to begin its Asian foray...
Store Management
In Taiwan, Carrefour decentralized store management, and treated each store as a
profit center. The stores were headed by store managers, just as in other
countries. However, in Taiwan, Carrefour's store managers were given more
autonomy compared to their European counterparts...
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Product and Pricing
Carrefour was one of the first companies to open hypermarkets in Taiwan.
It was also one of the first retailers to provide one-stop shopping and
free parking...
Managing the Suppliers
Carrefour changed the traditional retailer-supplier relationship in
Taiwan, and successfully transferred some of the costs which retailers
usually bore, like advertising costs, loss on account of damaged goods,
etc., to the suppliers...
Localization Strategies
After Carrefour realized that store formats that were successful in
other countries might not be successful in Taiwan, it set up stores that
often had more than one floor, unlike the western style hypermarkets,
which usually occupied a single floor... |
Outlook
Though Carrefour was extremely successful in establishing itself in Taiwan, its
revenues began to decline after 2000, even as the number of stores was
increasing. (Refer to Table I for details.) Some of Carrefour's practices like
back margin and charging slotting fees did not go down well with the suppliers,
who felt that the company was taking undue advantage of its bargaining power...
Exhibits
Exhibit I: Carrefour - International Expansion
Exhibit II: The Top 15 Grocery Retailers in Europe
Exhibit III: Carrefour - Store Formats
Exhibit IV: Carrefour - Sales Country Wise (€ Million)
Exhibit V: Retail in Taiwan
Exhibit VI: Carrefour - Entry into Asia
Exhibit VII: A Comparison of Carrefour's Strategies in China and Taiwan
Exhibit VIII: Carrefour's Major Competitors in Taiwan
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