Company Overview
Since the supermarkets introduction in 1960, Carrefour has been a popular choice amongst consumers. Due to its immediate popularity among consumers, the firm’s founders decided to test their retailing formula by additional products such as clothing, sporting equipment, auto accessories, and consumer electronics. The first of these “hypermarkets” was opened in 1963. Carrefour differentiated themselves from their competitors by offering both food and nonfood products at discounted prices. The Carrefour hypermarket was accepted enthusiastically by French consumers and the company began to expand. By the end of 1971 Carrefour was operating 16 wholly owned stores, 5 joint ventures, and had franchise agreements with 7 additional stores. In the next year, Carrefour plans to open 15 new stores under one of the three operating arrangements.
Several corporate strategies such as inexpensive construction, low-cost land acquisition, decentralized management, and a focus on customer convenience and price are integral to the success of the Carrefour hypermarket. By constructing their stores near highways on very inexpensive land, the company not only benefits from a total investment per m² equal to one third of traditional supermarkets, but Carrefour also adds value to its stores since it is advantageously accessible off a highway for consumers. Additionally, any product purchased more than once a year could be bought at a Carrefour store at a discounted price. Thus, convenience and price are important factors when establishing a competitive advantage. The high degree of consumer acceptance is testament to the fact that Carrefour has a corporate strategy that is viable in the retail market.
However, due to the success of the Carrefour m ...