Carrefour's Exit from South Korea
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Case Details:
Case Code : BSTR241
Case Length : 19 Pages
Period : 1995-2006
Organization : Carrefour
Pub Date : 2006
Teaching Note : Not Available
Countries : South Korea
Industry : Retailing
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Please note:
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
Going Global
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Carrefour began to enter international markets after a law was passed in France
in 1963 to restrict the development of large stores. For its international
expansion, Carrefour adopted the route of forming alliances with local partners.
Its first international venture was in Belgium, where it opened an outlet in
association with Delhaize Fréres-Le-Lion , in 1969.
Carrefour's first venture outside Europe was its hypermarket in Brazil in 1975.
In foreign markets, Carrefour was careful to customize its operations to the
preferences of local customers. Instead of selling imported French products,
Carrefour sold local products through its stores. In 1978, Carrefour developed a
hard discount store format, under the banner Ed, in France.
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The store offered a limited range of products at very low
prices. By 1985, Carrefour was operating in ten countries and had introduced
private label products that were priced 10-20% lower than the branded products
and were said to be of superior quality...
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Carrefour in South Korea
During the late 1980s, the economies of several Asian countries like
Taiwan, Singapore, South Korea, Thailand etc. were booming. In order to
reap the benefits of this growth, Carrefour started its Asian operations
by entering Taiwan in 1989.
It established a joint venture with Uni President Enterprises
Corporation there. Its next destination was Malaysia, followed by China
and South Korea (Refer Table III for details of Carrefour's entry into
Asian markets). |
In the early 1990s, there was a growing demand from the South
Korean consumers for modern shopping experience owing to the country's rapid
economic growth and increasing income.
The Government had adopted protectionist policies and the retail sector was not
open for foreign direct investment at this time. The retail sector was dominated
by mom-and-pop stores, which accounted for about 80% of the total retail sales
in the country...
Excerpts Contd...>>
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