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Case 25
Carrefour
Case Objectives
1) To demonstrate how external environmental forces can affect retail sales and success.
2) To illustrate advantages and disadvantages of various foreign market entry strategies.
Problem Situation
Carrefour is Europe’s leading retailer with sales of $121.8 billion in 2009 and the world’s second
largest retailer after Wal-Mart. Its slogan is “Everything under one roof.” The Carrefour group
Teaching Suggestions
Ask students what the largest retailer in the world is and you will probably have 100% reply,
“Walmart.” Ask the same students to list the second largest retailer in the world and you will be
fortunate to have any to correctly identify Carrefour. A quick review of the largest retailers in
the United States (see chapter 2) reveals that the number two U.S. retailer, The Kroger Co., lags
Case Discussion
Carrefour faces a number of uncontrollable, external environmental factors wherever it does
business. According to Euromonitor International, there is not much growth potential in the
place, local culture and traditions, and business customs. It is important that students correctly
summarize the specifics of Bulgaria’s environment and possible impact of each upon Carrefour’s
success. An environmental analysis of Bulgaria may look something like the following:
• Economic Environment: A discussion of this factor should include both a breakdown of
positive aspects of the Bulgarian economy (e.g., improved standard of living, increasing
household incomes, tax reductions, and access to consumer credit.) and negative economic
variables (e.g., negative GDP and retail sales in 2009). What factors are key to Carrefour?
• Socio-Cultural: Demographics is a key to defining market segments and includes facts about
the age and gender of potential Carrefour shoppers. What do students see as interesting facts
Afer reviewing Bulgaria’s environmental factors, it would seem a case could be made for
Carrefour to avoid Bulgaria. Why then did Carrefour managment decide that the country
provides ample opportunity for future growth of Carrefour’s international operations? Does
Bulgaria’s recent entry into the European Union make a difference in how Bulgaria is rated as a
potential market? What are the advantages to Carrefour in doing business in Bulgaria due to
Burgaria’s membership in the EU?