Learning objective of the Case Study

 There are two case series. The case series discusses the
applicability of the hypermarkets and supermarkets
business models in Asian contexts.

 Case (A) illustrates the industry evolution, the economic

model and the globalization trends of mass retailing and
describes the key characteristics of various Asian markets
with a particular emphasis on China and Japan.

 The (B) case presents some of the major international

players in this industry: Wal- Mart, Carrefour, Tesco,
Metro, Makro, Dairy Farm, Ito-Yokado and Aeon.
 Continue . . .
This case study aims to:

1. Perform an industry analysis in a regional (Asian) context;

2. Identify the issues associated with the globalization of
services;
3. Discuss the applicability of the hypermarket business
model in Asia; and
4. Analyze how competitive advantages can be built
internationally with a particular focus on Asia (especially
China and Japan). *Abstract reprinted with the permission
of Insead.*
Sam Walton opened the first store in 1962 in Rogers, Arkansas.

Within 5 years there were 25 Wal-mart stores earning a total revenue of $12.6
million in sales.

In 1972 Wal-mart was listed in the NYSE.

In 1991, Wal-Mart became an international company when it opened a Sam's

Club near Mexico City. Just two years later, Wal-Mart International was created.

In 2005 Wal-mart incorporated sustainability in it’s business under their CEO H
Lee Scott Jr.

Presently 7,800 stores and club locations in 15 markets employ more than 2
million associates, serving more than 176 million customers a year
 ABOUT CARREFOUR
 The first Carrefour store opened on 3 June 1957, in suburban
Annecy near a crossroads (carrefour in French). The group
was created by Marcel Fournier Denis Defforey and Jacques
Defforey and grew into a chain from this first sales outlet

 In 1999 it merged with Promodès, known as Continent, one

of its major competitors in the French market.

 The first hypermarket was opened on 15 June 1963 in Sainte-

Geneviève-des-Bois, near Paris in France
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 In 1989, Carrefour became the first international retailer to

establish a presence in Asia when it entered Taiwan through a
joint venture with Uni President Enterprises Corporation.

 In 2007, expansion accelerated outside France, particularly in

Asia, with the building of 36 new hypermarkets, including 22
in China - where the Group broke its record for store openings
in a one-year period.
ABOUT TESCO

 Tesco’s is a United Kingdom based international

supermarket chain. It is the largest British retailer both by
global sales and by domestic market share. Established in
1924.
 Tesco is the third-largest retailer in the world next to Wal-
Mart, Carrefour and is operating around 2,440 stores and
employing over 4,00,000 people
 Tesco’s market share of UK retailing is 12.5%.
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 Tesco has moved into areas such as clothes,

consumer electronics, consumer financial
services, internet services, consumer telecoms
and gas stations.
 Tesco now controls over 30% of the grocery
market in U.K.
 As of March 2008, Tesco have a store in every
postcode of the UK.
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 ABOUT METRO
 METRO Cash & Carry is a leading international company
in self-service wholesale and operates more than 600
outlets in 29 countries. With over 100,000 employees
worldwide, the company achieved sales of € 31.7 billion in
2007.

 By generating almost 50 percent of the total sales,

METRO Cash & Carry is the top-selling sales brand of the
METRO Group.

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 Assortment and service of METRO Cash & Carry’s unique

business-to-business model are targeted only towards
professional customers such as hotels and restaurants as
well as small and mid-sized retailers or institutions.
 The company offers these special groups a high level of
assortment competency both in food and nonfood as
well as attractive wholesale prices. An efficient and
internationally conferrable concept ensures success in
entering new markets. 

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SWOT ANTALYSIS OF WAL-MART
Strength:
 Cost Advantage.
 Low Price and Customer Oriented.
 Focused strategy.
 Strong Supply Chain Management.
 People are key to success.
Weakness:
 Ignore store decoration
 Wal-mart sell products across many sectors (such as
clothing, food, or stationary), it may not have the flexibility
of some of its more focused competitors.
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Opportunity:
 Strong Brand Equity.
 Put efforts on social welfare – better image.
 New location, or store types.
 Oversees Markets.
Threats:
 Other Competitors.
 Intense price competition.
SWOT ANALYSIS OF CARREFOUR

Strengths
 Industry Leader
 Well established vendor relations
 Cost leadership

Weaknesses
 Low profit margins
 High work force requirements
 In china it do not study the market that’s why its first
attempt was failed
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Opportunities

 Early mover advantage

 Global outreach and brand recognition
 Recessions leading to high scale of low cost products

Threats
 Sources of cost reduction may not be unique and
other competitors can copy cost reduction strategies.
METRO SWOT ANALYSIS

Strength
1. Expansion to more lucrative (Profitable) markets like China and
Japan.
2. Low decoration cost
3. Strong relationships with suppliers
4. Suitable store location.

Weaknesses
1. Expansion in one direction.
2. Membership card system that might narrow segment.
3. Only confidence on local suppliers.

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CONTINUE..
Opportunities
1. Expansion in emerging markets.
2. Fast development of high technology.
3. Favourable conditions to start business.

Threats
1. Consumers fluctuating tastes
2. High level of competitors
3. Economic downturn
4. Economic, political and legal risks

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SWOT ANALYSIS OF TESCO

Strengths
1.Increasing market share.
2.Tesco online.
3.Brand value.
Weakness
1.Dependence upon the UK market.
2.Serial acquisitions
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Opportunities

1.Non-food retail like Health and beauty

2.Further international growth

Threats

1.Overseas returns could fall

2.Wal-Mart / Carrefour challenge
3.International expansion.
PEST ANALYSIS OF MASS RETAILING
COMPANIES
IN ASIA
Political Influence
1. The political instability is the major factor of low foreign
investment in Asia.
2. The ineffective control of every GOVT regarding the
price of product. Inflation creates problems because
customer demand product at the same low price which in
such condition prices changes rapidly.
3. The political factors can be local, national or
international. Many governments can be involved. For
instance, Tesco might have to deal with Asia politics in
regards to its coffee and tea supply.
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ECONOMICAL INFLUENCE

1. The rapid growth inflation rate also the major problem.

2. The devaluation of money.
3. Policies of Central bank can be influenced by existence
political party and GOVT.
4. Economic factors have large impacts. Fluctuations in the
stock market, or tax increases, can seriously affect the
bottom line of a company
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SOCIAL INFLUENCE

1. Sociological factors can vary from the impact of

immigration, to changes in fashion.
2. The habit of Asian consumers is to buy the goods from
the nearest shop day to day and need basis. They prefer
to buy on credit.
3. All societies and cultures of Asia and its market is not
as much adapting to change. They do not easily accept
the new arrival in any field of the product.
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TECHNOLOGICAL INFLUENCE

 New technologies have had a great impact. For instance,

online shopping has become a major factor in retailing
companies. 

 Advancement in technological and satellite systems.

For example Wal-Mart invested over half a billion dollors
in IT and satellite facilities to connect its worldwide stores
to headquarters
 PROPOSED STRATEGIES

 When entering in Asia the first attempt of the

mass retailing company is to study the local
market condition and situation through SWOT
and PEST Analysis.
 Asian countries cultures are different from entire
world so it is necessary for retailing companies to
adopt the Asian culture (China and Japan).
 When retailing companies operate their business
in any country of Asia they should recruit their
local employees and suppliers of that country.
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 International business expansion is not
successful in Asia as compare to joint venture
and acquisition.
 Asian consumers are not willingly embrace the
hypermarket and ware house concept, so it is
necessary for a company in Asia not to adopt the
hyper and warehouse concept because they like
wet market and neighborhood stores on credit.
 Slow down its expansion plans and concentrate
on refitting existing stores.
CONCLUSION AND FINDINGS

 The case study which we have been study were been

about the competitors of mass retailing companies, that
how would they started their business and expanded and
also studied about the withdrawal of these companies
from the Asia.
 In the case study we have been also studied about the
problems which companies were faced in highly
experienced. The SWOT and PEST analysis that how
would the company used it again each other for its
success and survival in Asia

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