Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition?
Since the first Carrefour outlet opens in China in 1995, the company makes outstanding achievements in the Chinese retailing market. In 1999, it is ranked as the third largest Chinese retailer and second in the franchising sector. By 2000, its sales in China has exceeded US$0.99 billion and by 2004, the number of outlets has reached 62, representing a 51.2% increase from the previous year and nearly equivalent to the total outlets of two other large, global retailers combined-Wal-Mart (43 outlets) and Metro (23 outlets). Recently, however, local retailers have become more competitive and other global retailers have also started to strengthen their presence in China. Moreover, retailers have begun to move inland and into second-tier cities where Carrefour lacks presence. Faced with such challenges, will Carrefour be able to maintain its past glory in China?
Swot Analysis of "Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition?" written by Dongya Li, Zhigang Tao, Isabella Chan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Carrefour Outlets facing as an external strategic factors. Some of the topics covered in Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? case study are - Strategic Management Strategies, Emerging markets and Global Business.
Some of the macro environment factors that can be used to understand the Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, wage bills are increasing,
there is backlash against globalization, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Carrefour Outlets, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Carrefour Outlets operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? can be done for the following purposes –
1. Strategic planning using facts provided in Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? case study
2. Improving business portfolio management of Carrefour Outlets
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Carrefour Outlets
Strengths Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Carrefour Outlets in Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? Harvard Business Review case study are -
Organizational Resilience of Carrefour Outlets
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Carrefour Outlets does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Carrefour Outlets has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Diverse revenue streams
– Carrefour Outlets is present in almost all the verticals within the industry. This has provided firm in Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Training and development
– Carrefour Outlets has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– Carrefour Outlets is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Dongya Li, Zhigang Tao, Isabella Chan can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Carrefour Outlets in the sector have low bargaining power. Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Carrefour Outlets to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Carrefour Outlets has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Carrefour Outlets has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Carrefour Outlets to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Carrefour Outlets digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Carrefour Outlets has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Learning organization
- Carrefour Outlets is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Carrefour Outlets is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Carrefour Outlets has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition?, it seems that the employees of Carrefour Outlets don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition?, is just above the industry average. Carrefour Outlets needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Carrefour Outlets needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Carrefour Outlets supply chain. Even after few cautionary changes mentioned in the HBR case study - Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Carrefour Outlets vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Carrefour Outlets products
– To increase the profitability and margins on the products, Carrefour Outlets needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Carrefour Outlets is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Carrefour Outlets 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Carrefour Outlets has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Carrefour Outlets even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Aligning sales with marketing
– It come across in the case study Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? can leverage the sales team experience to cultivate customer relationships as Carrefour Outlets is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Dongya Li, Zhigang Tao, Isabella Chan suggests that, Carrefour Outlets is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Carrefour Outlets has relatively successful track record of launching new products.
Opportunities Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Carrefour Outlets can use these opportunities to build new business models that can help the communities that Carrefour Outlets operates in. Secondly it can use opportunities from government spending in Global Business sector.
Building a culture of innovation
– managers at Carrefour Outlets can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Loyalty marketing
– Carrefour Outlets has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Carrefour Outlets can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Creating value in data economy
– The success of analytics program of Carrefour Outlets has opened avenues for new revenue streams for the organization in the industry. This can help Carrefour Outlets to build a more holistic ecosystem as suggested in the Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? case study. Carrefour Outlets can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Carrefour Outlets to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Carrefour Outlets can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Carrefour Outlets can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Leveraging digital technologies
– Carrefour Outlets can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Carrefour Outlets is facing challenges because of the dominance of functional experts in the organization. Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Carrefour Outlets can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Carrefour Outlets can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Using analytics as competitive advantage
– Carrefour Outlets has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Carrefour Outlets to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Carrefour Outlets business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Carrefour Outlets.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Carrefour Outlets high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Carrefour Outlets will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology acceleration in Forth Industrial Revolution
– Carrefour Outlets has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Carrefour Outlets needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Shortening product life cycle
– it is one of the major threat that Carrefour Outlets is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Carrefour Outlets in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Regulatory challenges
– Carrefour Outlets needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition?, Carrefour Outlets may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Carrefour Outlets in the Global Business sector and impact the bottomline of the organization.
Environmental challenges
– Carrefour Outlets needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Carrefour Outlets can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Weighted SWOT Analysis of Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Carrefour China: Maintaining Its Past Glory or Drowning in the Sea of Competition? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Carrefour Outlets needs to make to build a sustainable competitive advantage.
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