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RETAIL DOESNrsquoT CROSS BORDERS
PRESENTED TO PRESENTED BY
MBAIB 2B ANUJ MALHOTRA
BRIJESH BAROT
GAURAV SOOD
JASPREET SINGH
INDIAN RETAIL INDUSTRY
Expanded by 106 per cent between 2010 and 2012 and is expected to increase to US$ 750-850 billion by 2015 Food and Grocery is the largest category within the retail sector with 60 per cent share followed by Apparel and Mobile segment
Accounting for around 14-15 per cent of the gross domestic product (GDP) the Indian retail industry is estimated to be worth around US$ 500 billion currently
Major Players
Pantaloon RetailFuture Group
K Raheja Group
Tata Group
RPG Group
Landmark Group
Parimal Group
Reliance
AV Birla Group
Quiz on retail stores and their parent company Pantaloons ndash
Bigbazaar -
Hyper city -
Westside -
Croma -
Lifestyle -
Max -
Planet sports ndash
Landmark -
Piramyd Megastore Megastore -
More -
Future Group
Future Group
k Raheja Group
Tata Group
Tata Group
Landmark Group
Landmark Group
Future Group
Tata Group
Parimal Group
AV Birla Group
Globalizationrsquos lure is almost irresistible With US economy struggling to expand and Europe on brink of recession fast growing markets in the developing world offer the best opportunities for boosting revenues and profits
When we focus on Grocery Retail Industry there are few exceptions globalization benefits had not accrued to retailers International players are almost entirely absent from even the largest retail markets
And every grocery retailer that has ventured overseas has failed as often as it has succeeded
Top 5 Retailers in the world
Walmart
Carrefour
Tesco
Metro
The Kroger company
Why Retailers go Global
Since retailing is low margin business big chains have been forced to move into overseas markets
Quest for greater economies of scale and scope
A need to diversify risk
A desire to attract new talent and create new opportunities for existing leaders
A need to make up for constraints imposed by regulatory agencies when a retailer becomes too big for its home market
Carrefour began to enter international markets after a law was passed in France in 1963 to restrict the development of large stores
Walmart
American multinational retailer corporation
Large discount department stores and warehouse stores
Worlds third largest public corporation (Fortune Global 500 2012)
Largest retailer in the United States and in the world
8500 stores in 15 countries under 55 different names (UK - Asda Japan - Seiyu India - Best Price WOS in Argentina Brazil Canada)
bull Mixed results in investments outside North America
ndash UK South America China are successful
ndash Germany South Korea Japan were unsuccessful
bull Offer broad assortment with even lower prices
bull Meet local needs while leverage global resources
bull Winning in Global eCommerce
Reasons for failure in Japan Japanese tends to prefer quality over low prices which
constrasts with Walmart core value EDLP (Every Day Low Price)
When a nation has a very strong purchasing power such as Japan why settle for cheap stuffs when you can buy high quality expensive products and still have money to spare
Japan is a small country with limited spaces which has several implications for Walmart as below
Small housings and apartment sizes with high rent prices means that Japanese would need to minimize their purchases
Several small purchases
High operating costs especially because of the prices of rent and buildings in general
Inability to apply original supply chain model
Do you consider aspects such as waste resources and energy when purchasing daily products
Waste Disposal in Japan
Trash categorization
Costly trash disposal procedure
Impact on Walmart
ldquoRetailers effectively represented the interest of the manufacturer rather than that of consumersrdquo (Tsukiizumi 2004)
bull Protection from aboveRetailers are often protected from financial risks by wholesalers and manufacturers through a number of distinctive market practices (such as rebates) bull Price and distribution control
Manufacturers and wholesalers controlled prices by enforcing districting and exclusive dealershipsbull Closed-network impact to government
For foreign retailers Japanrsquos complex retail and distribution system has long been inaccessible so much so that the US government considered it a nontariff barrier and a structural impediment for US-Japan trade
Manufacturers Wholesalers Retailers Customers
Line of governance
Impact for Walmart
SCM strategyWalmart supply chain management system aims for strategic sourcing to find products at best price from suppliers Walmart establishes strategic partnerships with most of their vendors offering potential long-term and high volume purchases in exchange for the lowest possible prices
Small profit marginWalmartrsquos business model is based on a low price strategy and low transportation costs allow it to sell its products at the lowest possible prices EDLP allows Walmart to break even or make small profit per sales while customers also win by saving money buying at low prices
Culture challengeJapan is used to the top-bottom approach while Walmart insists on bottom-up approach Walmart has to challenge the unusually powerful Japanese suppliers and manufacturers to conform with its Walmart model
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
INDIAN RETAIL INDUSTRY
Expanded by 106 per cent between 2010 and 2012 and is expected to increase to US$ 750-850 billion by 2015 Food and Grocery is the largest category within the retail sector with 60 per cent share followed by Apparel and Mobile segment
Accounting for around 14-15 per cent of the gross domestic product (GDP) the Indian retail industry is estimated to be worth around US$ 500 billion currently
Major Players
Pantaloon RetailFuture Group
K Raheja Group
Tata Group
RPG Group
Landmark Group
Parimal Group
Reliance
AV Birla Group
Quiz on retail stores and their parent company Pantaloons ndash
Bigbazaar -
Hyper city -
Westside -
Croma -
Lifestyle -
Max -
Planet sports ndash
Landmark -
Piramyd Megastore Megastore -
More -
Future Group
Future Group
k Raheja Group
Tata Group
Tata Group
Landmark Group
Landmark Group
Future Group
Tata Group
Parimal Group
AV Birla Group
Globalizationrsquos lure is almost irresistible With US economy struggling to expand and Europe on brink of recession fast growing markets in the developing world offer the best opportunities for boosting revenues and profits
When we focus on Grocery Retail Industry there are few exceptions globalization benefits had not accrued to retailers International players are almost entirely absent from even the largest retail markets
And every grocery retailer that has ventured overseas has failed as often as it has succeeded
Top 5 Retailers in the world
Walmart
Carrefour
Tesco
Metro
The Kroger company
Why Retailers go Global
Since retailing is low margin business big chains have been forced to move into overseas markets
Quest for greater economies of scale and scope
A need to diversify risk
A desire to attract new talent and create new opportunities for existing leaders
A need to make up for constraints imposed by regulatory agencies when a retailer becomes too big for its home market
Carrefour began to enter international markets after a law was passed in France in 1963 to restrict the development of large stores
Walmart
American multinational retailer corporation
Large discount department stores and warehouse stores
Worlds third largest public corporation (Fortune Global 500 2012)
Largest retailer in the United States and in the world
8500 stores in 15 countries under 55 different names (UK - Asda Japan - Seiyu India - Best Price WOS in Argentina Brazil Canada)
bull Mixed results in investments outside North America
ndash UK South America China are successful
ndash Germany South Korea Japan were unsuccessful
bull Offer broad assortment with even lower prices
bull Meet local needs while leverage global resources
bull Winning in Global eCommerce
Reasons for failure in Japan Japanese tends to prefer quality over low prices which
constrasts with Walmart core value EDLP (Every Day Low Price)
When a nation has a very strong purchasing power such as Japan why settle for cheap stuffs when you can buy high quality expensive products and still have money to spare
Japan is a small country with limited spaces which has several implications for Walmart as below
Small housings and apartment sizes with high rent prices means that Japanese would need to minimize their purchases
Several small purchases
High operating costs especially because of the prices of rent and buildings in general
Inability to apply original supply chain model
Do you consider aspects such as waste resources and energy when purchasing daily products
Waste Disposal in Japan
Trash categorization
Costly trash disposal procedure
Impact on Walmart
ldquoRetailers effectively represented the interest of the manufacturer rather than that of consumersrdquo (Tsukiizumi 2004)
bull Protection from aboveRetailers are often protected from financial risks by wholesalers and manufacturers through a number of distinctive market practices (such as rebates) bull Price and distribution control
Manufacturers and wholesalers controlled prices by enforcing districting and exclusive dealershipsbull Closed-network impact to government
For foreign retailers Japanrsquos complex retail and distribution system has long been inaccessible so much so that the US government considered it a nontariff barrier and a structural impediment for US-Japan trade
Manufacturers Wholesalers Retailers Customers
Line of governance
Impact for Walmart
SCM strategyWalmart supply chain management system aims for strategic sourcing to find products at best price from suppliers Walmart establishes strategic partnerships with most of their vendors offering potential long-term and high volume purchases in exchange for the lowest possible prices
Small profit marginWalmartrsquos business model is based on a low price strategy and low transportation costs allow it to sell its products at the lowest possible prices EDLP allows Walmart to break even or make small profit per sales while customers also win by saving money buying at low prices
Culture challengeJapan is used to the top-bottom approach while Walmart insists on bottom-up approach Walmart has to challenge the unusually powerful Japanese suppliers and manufacturers to conform with its Walmart model
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Major Players
Pantaloon RetailFuture Group
K Raheja Group
Tata Group
RPG Group
Landmark Group
Parimal Group
Reliance
AV Birla Group
Quiz on retail stores and their parent company Pantaloons ndash
Bigbazaar -
Hyper city -
Westside -
Croma -
Lifestyle -
Max -
Planet sports ndash
Landmark -
Piramyd Megastore Megastore -
More -
Future Group
Future Group
k Raheja Group
Tata Group
Tata Group
Landmark Group
Landmark Group
Future Group
Tata Group
Parimal Group
AV Birla Group
Globalizationrsquos lure is almost irresistible With US economy struggling to expand and Europe on brink of recession fast growing markets in the developing world offer the best opportunities for boosting revenues and profits
When we focus on Grocery Retail Industry there are few exceptions globalization benefits had not accrued to retailers International players are almost entirely absent from even the largest retail markets
And every grocery retailer that has ventured overseas has failed as often as it has succeeded
Top 5 Retailers in the world
Walmart
Carrefour
Tesco
Metro
The Kroger company
Why Retailers go Global
Since retailing is low margin business big chains have been forced to move into overseas markets
Quest for greater economies of scale and scope
A need to diversify risk
A desire to attract new talent and create new opportunities for existing leaders
A need to make up for constraints imposed by regulatory agencies when a retailer becomes too big for its home market
Carrefour began to enter international markets after a law was passed in France in 1963 to restrict the development of large stores
Walmart
American multinational retailer corporation
Large discount department stores and warehouse stores
Worlds third largest public corporation (Fortune Global 500 2012)
Largest retailer in the United States and in the world
8500 stores in 15 countries under 55 different names (UK - Asda Japan - Seiyu India - Best Price WOS in Argentina Brazil Canada)
bull Mixed results in investments outside North America
ndash UK South America China are successful
ndash Germany South Korea Japan were unsuccessful
bull Offer broad assortment with even lower prices
bull Meet local needs while leverage global resources
bull Winning in Global eCommerce
Reasons for failure in Japan Japanese tends to prefer quality over low prices which
constrasts with Walmart core value EDLP (Every Day Low Price)
When a nation has a very strong purchasing power such as Japan why settle for cheap stuffs when you can buy high quality expensive products and still have money to spare
Japan is a small country with limited spaces which has several implications for Walmart as below
Small housings and apartment sizes with high rent prices means that Japanese would need to minimize their purchases
Several small purchases
High operating costs especially because of the prices of rent and buildings in general
Inability to apply original supply chain model
Do you consider aspects such as waste resources and energy when purchasing daily products
Waste Disposal in Japan
Trash categorization
Costly trash disposal procedure
Impact on Walmart
ldquoRetailers effectively represented the interest of the manufacturer rather than that of consumersrdquo (Tsukiizumi 2004)
bull Protection from aboveRetailers are often protected from financial risks by wholesalers and manufacturers through a number of distinctive market practices (such as rebates) bull Price and distribution control
Manufacturers and wholesalers controlled prices by enforcing districting and exclusive dealershipsbull Closed-network impact to government
For foreign retailers Japanrsquos complex retail and distribution system has long been inaccessible so much so that the US government considered it a nontariff barrier and a structural impediment for US-Japan trade
Manufacturers Wholesalers Retailers Customers
Line of governance
Impact for Walmart
SCM strategyWalmart supply chain management system aims for strategic sourcing to find products at best price from suppliers Walmart establishes strategic partnerships with most of their vendors offering potential long-term and high volume purchases in exchange for the lowest possible prices
Small profit marginWalmartrsquos business model is based on a low price strategy and low transportation costs allow it to sell its products at the lowest possible prices EDLP allows Walmart to break even or make small profit per sales while customers also win by saving money buying at low prices
Culture challengeJapan is used to the top-bottom approach while Walmart insists on bottom-up approach Walmart has to challenge the unusually powerful Japanese suppliers and manufacturers to conform with its Walmart model
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Quiz on retail stores and their parent company Pantaloons ndash
Bigbazaar -
Hyper city -
Westside -
Croma -
Lifestyle -
Max -
Planet sports ndash
Landmark -
Piramyd Megastore Megastore -
More -
Future Group
Future Group
k Raheja Group
Tata Group
Tata Group
Landmark Group
Landmark Group
Future Group
Tata Group
Parimal Group
AV Birla Group
Globalizationrsquos lure is almost irresistible With US economy struggling to expand and Europe on brink of recession fast growing markets in the developing world offer the best opportunities for boosting revenues and profits
When we focus on Grocery Retail Industry there are few exceptions globalization benefits had not accrued to retailers International players are almost entirely absent from even the largest retail markets
And every grocery retailer that has ventured overseas has failed as often as it has succeeded
Top 5 Retailers in the world
Walmart
Carrefour
Tesco
Metro
The Kroger company
Why Retailers go Global
Since retailing is low margin business big chains have been forced to move into overseas markets
Quest for greater economies of scale and scope
A need to diversify risk
A desire to attract new talent and create new opportunities for existing leaders
A need to make up for constraints imposed by regulatory agencies when a retailer becomes too big for its home market
Carrefour began to enter international markets after a law was passed in France in 1963 to restrict the development of large stores
Walmart
American multinational retailer corporation
Large discount department stores and warehouse stores
Worlds third largest public corporation (Fortune Global 500 2012)
Largest retailer in the United States and in the world
8500 stores in 15 countries under 55 different names (UK - Asda Japan - Seiyu India - Best Price WOS in Argentina Brazil Canada)
bull Mixed results in investments outside North America
ndash UK South America China are successful
ndash Germany South Korea Japan were unsuccessful
bull Offer broad assortment with even lower prices
bull Meet local needs while leverage global resources
bull Winning in Global eCommerce
Reasons for failure in Japan Japanese tends to prefer quality over low prices which
constrasts with Walmart core value EDLP (Every Day Low Price)
When a nation has a very strong purchasing power such as Japan why settle for cheap stuffs when you can buy high quality expensive products and still have money to spare
Japan is a small country with limited spaces which has several implications for Walmart as below
Small housings and apartment sizes with high rent prices means that Japanese would need to minimize their purchases
Several small purchases
High operating costs especially because of the prices of rent and buildings in general
Inability to apply original supply chain model
Do you consider aspects such as waste resources and energy when purchasing daily products
Waste Disposal in Japan
Trash categorization
Costly trash disposal procedure
Impact on Walmart
ldquoRetailers effectively represented the interest of the manufacturer rather than that of consumersrdquo (Tsukiizumi 2004)
bull Protection from aboveRetailers are often protected from financial risks by wholesalers and manufacturers through a number of distinctive market practices (such as rebates) bull Price and distribution control
Manufacturers and wholesalers controlled prices by enforcing districting and exclusive dealershipsbull Closed-network impact to government
For foreign retailers Japanrsquos complex retail and distribution system has long been inaccessible so much so that the US government considered it a nontariff barrier and a structural impediment for US-Japan trade
Manufacturers Wholesalers Retailers Customers
Line of governance
Impact for Walmart
SCM strategyWalmart supply chain management system aims for strategic sourcing to find products at best price from suppliers Walmart establishes strategic partnerships with most of their vendors offering potential long-term and high volume purchases in exchange for the lowest possible prices
Small profit marginWalmartrsquos business model is based on a low price strategy and low transportation costs allow it to sell its products at the lowest possible prices EDLP allows Walmart to break even or make small profit per sales while customers also win by saving money buying at low prices
Culture challengeJapan is used to the top-bottom approach while Walmart insists on bottom-up approach Walmart has to challenge the unusually powerful Japanese suppliers and manufacturers to conform with its Walmart model
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Globalizationrsquos lure is almost irresistible With US economy struggling to expand and Europe on brink of recession fast growing markets in the developing world offer the best opportunities for boosting revenues and profits
When we focus on Grocery Retail Industry there are few exceptions globalization benefits had not accrued to retailers International players are almost entirely absent from even the largest retail markets
And every grocery retailer that has ventured overseas has failed as often as it has succeeded
Top 5 Retailers in the world
Walmart
Carrefour
Tesco
Metro
The Kroger company
Why Retailers go Global
Since retailing is low margin business big chains have been forced to move into overseas markets
Quest for greater economies of scale and scope
A need to diversify risk
A desire to attract new talent and create new opportunities for existing leaders
A need to make up for constraints imposed by regulatory agencies when a retailer becomes too big for its home market
Carrefour began to enter international markets after a law was passed in France in 1963 to restrict the development of large stores
Walmart
American multinational retailer corporation
Large discount department stores and warehouse stores
Worlds third largest public corporation (Fortune Global 500 2012)
Largest retailer in the United States and in the world
8500 stores in 15 countries under 55 different names (UK - Asda Japan - Seiyu India - Best Price WOS in Argentina Brazil Canada)
bull Mixed results in investments outside North America
ndash UK South America China are successful
ndash Germany South Korea Japan were unsuccessful
bull Offer broad assortment with even lower prices
bull Meet local needs while leverage global resources
bull Winning in Global eCommerce
Reasons for failure in Japan Japanese tends to prefer quality over low prices which
constrasts with Walmart core value EDLP (Every Day Low Price)
When a nation has a very strong purchasing power such as Japan why settle for cheap stuffs when you can buy high quality expensive products and still have money to spare
Japan is a small country with limited spaces which has several implications for Walmart as below
Small housings and apartment sizes with high rent prices means that Japanese would need to minimize their purchases
Several small purchases
High operating costs especially because of the prices of rent and buildings in general
Inability to apply original supply chain model
Do you consider aspects such as waste resources and energy when purchasing daily products
Waste Disposal in Japan
Trash categorization
Costly trash disposal procedure
Impact on Walmart
ldquoRetailers effectively represented the interest of the manufacturer rather than that of consumersrdquo (Tsukiizumi 2004)
bull Protection from aboveRetailers are often protected from financial risks by wholesalers and manufacturers through a number of distinctive market practices (such as rebates) bull Price and distribution control
Manufacturers and wholesalers controlled prices by enforcing districting and exclusive dealershipsbull Closed-network impact to government
For foreign retailers Japanrsquos complex retail and distribution system has long been inaccessible so much so that the US government considered it a nontariff barrier and a structural impediment for US-Japan trade
Manufacturers Wholesalers Retailers Customers
Line of governance
Impact for Walmart
SCM strategyWalmart supply chain management system aims for strategic sourcing to find products at best price from suppliers Walmart establishes strategic partnerships with most of their vendors offering potential long-term and high volume purchases in exchange for the lowest possible prices
Small profit marginWalmartrsquos business model is based on a low price strategy and low transportation costs allow it to sell its products at the lowest possible prices EDLP allows Walmart to break even or make small profit per sales while customers also win by saving money buying at low prices
Culture challengeJapan is used to the top-bottom approach while Walmart insists on bottom-up approach Walmart has to challenge the unusually powerful Japanese suppliers and manufacturers to conform with its Walmart model
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Top 5 Retailers in the world
Walmart
Carrefour
Tesco
Metro
The Kroger company
Why Retailers go Global
Since retailing is low margin business big chains have been forced to move into overseas markets
Quest for greater economies of scale and scope
A need to diversify risk
A desire to attract new talent and create new opportunities for existing leaders
A need to make up for constraints imposed by regulatory agencies when a retailer becomes too big for its home market
Carrefour began to enter international markets after a law was passed in France in 1963 to restrict the development of large stores
Walmart
American multinational retailer corporation
Large discount department stores and warehouse stores
Worlds third largest public corporation (Fortune Global 500 2012)
Largest retailer in the United States and in the world
8500 stores in 15 countries under 55 different names (UK - Asda Japan - Seiyu India - Best Price WOS in Argentina Brazil Canada)
bull Mixed results in investments outside North America
ndash UK South America China are successful
ndash Germany South Korea Japan were unsuccessful
bull Offer broad assortment with even lower prices
bull Meet local needs while leverage global resources
bull Winning in Global eCommerce
Reasons for failure in Japan Japanese tends to prefer quality over low prices which
constrasts with Walmart core value EDLP (Every Day Low Price)
When a nation has a very strong purchasing power such as Japan why settle for cheap stuffs when you can buy high quality expensive products and still have money to spare
Japan is a small country with limited spaces which has several implications for Walmart as below
Small housings and apartment sizes with high rent prices means that Japanese would need to minimize their purchases
Several small purchases
High operating costs especially because of the prices of rent and buildings in general
Inability to apply original supply chain model
Do you consider aspects such as waste resources and energy when purchasing daily products
Waste Disposal in Japan
Trash categorization
Costly trash disposal procedure
Impact on Walmart
ldquoRetailers effectively represented the interest of the manufacturer rather than that of consumersrdquo (Tsukiizumi 2004)
bull Protection from aboveRetailers are often protected from financial risks by wholesalers and manufacturers through a number of distinctive market practices (such as rebates) bull Price and distribution control
Manufacturers and wholesalers controlled prices by enforcing districting and exclusive dealershipsbull Closed-network impact to government
For foreign retailers Japanrsquos complex retail and distribution system has long been inaccessible so much so that the US government considered it a nontariff barrier and a structural impediment for US-Japan trade
Manufacturers Wholesalers Retailers Customers
Line of governance
Impact for Walmart
SCM strategyWalmart supply chain management system aims for strategic sourcing to find products at best price from suppliers Walmart establishes strategic partnerships with most of their vendors offering potential long-term and high volume purchases in exchange for the lowest possible prices
Small profit marginWalmartrsquos business model is based on a low price strategy and low transportation costs allow it to sell its products at the lowest possible prices EDLP allows Walmart to break even or make small profit per sales while customers also win by saving money buying at low prices
Culture challengeJapan is used to the top-bottom approach while Walmart insists on bottom-up approach Walmart has to challenge the unusually powerful Japanese suppliers and manufacturers to conform with its Walmart model
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Why Retailers go Global
Since retailing is low margin business big chains have been forced to move into overseas markets
Quest for greater economies of scale and scope
A need to diversify risk
A desire to attract new talent and create new opportunities for existing leaders
A need to make up for constraints imposed by regulatory agencies when a retailer becomes too big for its home market
Carrefour began to enter international markets after a law was passed in France in 1963 to restrict the development of large stores
Walmart
American multinational retailer corporation
Large discount department stores and warehouse stores
Worlds third largest public corporation (Fortune Global 500 2012)
Largest retailer in the United States and in the world
8500 stores in 15 countries under 55 different names (UK - Asda Japan - Seiyu India - Best Price WOS in Argentina Brazil Canada)
bull Mixed results in investments outside North America
ndash UK South America China are successful
ndash Germany South Korea Japan were unsuccessful
bull Offer broad assortment with even lower prices
bull Meet local needs while leverage global resources
bull Winning in Global eCommerce
Reasons for failure in Japan Japanese tends to prefer quality over low prices which
constrasts with Walmart core value EDLP (Every Day Low Price)
When a nation has a very strong purchasing power such as Japan why settle for cheap stuffs when you can buy high quality expensive products and still have money to spare
Japan is a small country with limited spaces which has several implications for Walmart as below
Small housings and apartment sizes with high rent prices means that Japanese would need to minimize their purchases
Several small purchases
High operating costs especially because of the prices of rent and buildings in general
Inability to apply original supply chain model
Do you consider aspects such as waste resources and energy when purchasing daily products
Waste Disposal in Japan
Trash categorization
Costly trash disposal procedure
Impact on Walmart
ldquoRetailers effectively represented the interest of the manufacturer rather than that of consumersrdquo (Tsukiizumi 2004)
bull Protection from aboveRetailers are often protected from financial risks by wholesalers and manufacturers through a number of distinctive market practices (such as rebates) bull Price and distribution control
Manufacturers and wholesalers controlled prices by enforcing districting and exclusive dealershipsbull Closed-network impact to government
For foreign retailers Japanrsquos complex retail and distribution system has long been inaccessible so much so that the US government considered it a nontariff barrier and a structural impediment for US-Japan trade
Manufacturers Wholesalers Retailers Customers
Line of governance
Impact for Walmart
SCM strategyWalmart supply chain management system aims for strategic sourcing to find products at best price from suppliers Walmart establishes strategic partnerships with most of their vendors offering potential long-term and high volume purchases in exchange for the lowest possible prices
Small profit marginWalmartrsquos business model is based on a low price strategy and low transportation costs allow it to sell its products at the lowest possible prices EDLP allows Walmart to break even or make small profit per sales while customers also win by saving money buying at low prices
Culture challengeJapan is used to the top-bottom approach while Walmart insists on bottom-up approach Walmart has to challenge the unusually powerful Japanese suppliers and manufacturers to conform with its Walmart model
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Walmart
American multinational retailer corporation
Large discount department stores and warehouse stores
Worlds third largest public corporation (Fortune Global 500 2012)
Largest retailer in the United States and in the world
8500 stores in 15 countries under 55 different names (UK - Asda Japan - Seiyu India - Best Price WOS in Argentina Brazil Canada)
bull Mixed results in investments outside North America
ndash UK South America China are successful
ndash Germany South Korea Japan were unsuccessful
bull Offer broad assortment with even lower prices
bull Meet local needs while leverage global resources
bull Winning in Global eCommerce
Reasons for failure in Japan Japanese tends to prefer quality over low prices which
constrasts with Walmart core value EDLP (Every Day Low Price)
When a nation has a very strong purchasing power such as Japan why settle for cheap stuffs when you can buy high quality expensive products and still have money to spare
Japan is a small country with limited spaces which has several implications for Walmart as below
Small housings and apartment sizes with high rent prices means that Japanese would need to minimize their purchases
Several small purchases
High operating costs especially because of the prices of rent and buildings in general
Inability to apply original supply chain model
Do you consider aspects such as waste resources and energy when purchasing daily products
Waste Disposal in Japan
Trash categorization
Costly trash disposal procedure
Impact on Walmart
ldquoRetailers effectively represented the interest of the manufacturer rather than that of consumersrdquo (Tsukiizumi 2004)
bull Protection from aboveRetailers are often protected from financial risks by wholesalers and manufacturers through a number of distinctive market practices (such as rebates) bull Price and distribution control
Manufacturers and wholesalers controlled prices by enforcing districting and exclusive dealershipsbull Closed-network impact to government
For foreign retailers Japanrsquos complex retail and distribution system has long been inaccessible so much so that the US government considered it a nontariff barrier and a structural impediment for US-Japan trade
Manufacturers Wholesalers Retailers Customers
Line of governance
Impact for Walmart
SCM strategyWalmart supply chain management system aims for strategic sourcing to find products at best price from suppliers Walmart establishes strategic partnerships with most of their vendors offering potential long-term and high volume purchases in exchange for the lowest possible prices
Small profit marginWalmartrsquos business model is based on a low price strategy and low transportation costs allow it to sell its products at the lowest possible prices EDLP allows Walmart to break even or make small profit per sales while customers also win by saving money buying at low prices
Culture challengeJapan is used to the top-bottom approach while Walmart insists on bottom-up approach Walmart has to challenge the unusually powerful Japanese suppliers and manufacturers to conform with its Walmart model
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
bull Mixed results in investments outside North America
ndash UK South America China are successful
ndash Germany South Korea Japan were unsuccessful
bull Offer broad assortment with even lower prices
bull Meet local needs while leverage global resources
bull Winning in Global eCommerce
Reasons for failure in Japan Japanese tends to prefer quality over low prices which
constrasts with Walmart core value EDLP (Every Day Low Price)
When a nation has a very strong purchasing power such as Japan why settle for cheap stuffs when you can buy high quality expensive products and still have money to spare
Japan is a small country with limited spaces which has several implications for Walmart as below
Small housings and apartment sizes with high rent prices means that Japanese would need to minimize their purchases
Several small purchases
High operating costs especially because of the prices of rent and buildings in general
Inability to apply original supply chain model
Do you consider aspects such as waste resources and energy when purchasing daily products
Waste Disposal in Japan
Trash categorization
Costly trash disposal procedure
Impact on Walmart
ldquoRetailers effectively represented the interest of the manufacturer rather than that of consumersrdquo (Tsukiizumi 2004)
bull Protection from aboveRetailers are often protected from financial risks by wholesalers and manufacturers through a number of distinctive market practices (such as rebates) bull Price and distribution control
Manufacturers and wholesalers controlled prices by enforcing districting and exclusive dealershipsbull Closed-network impact to government
For foreign retailers Japanrsquos complex retail and distribution system has long been inaccessible so much so that the US government considered it a nontariff barrier and a structural impediment for US-Japan trade
Manufacturers Wholesalers Retailers Customers
Line of governance
Impact for Walmart
SCM strategyWalmart supply chain management system aims for strategic sourcing to find products at best price from suppliers Walmart establishes strategic partnerships with most of their vendors offering potential long-term and high volume purchases in exchange for the lowest possible prices
Small profit marginWalmartrsquos business model is based on a low price strategy and low transportation costs allow it to sell its products at the lowest possible prices EDLP allows Walmart to break even or make small profit per sales while customers also win by saving money buying at low prices
Culture challengeJapan is used to the top-bottom approach while Walmart insists on bottom-up approach Walmart has to challenge the unusually powerful Japanese suppliers and manufacturers to conform with its Walmart model
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Reasons for failure in Japan Japanese tends to prefer quality over low prices which
constrasts with Walmart core value EDLP (Every Day Low Price)
When a nation has a very strong purchasing power such as Japan why settle for cheap stuffs when you can buy high quality expensive products and still have money to spare
Japan is a small country with limited spaces which has several implications for Walmart as below
Small housings and apartment sizes with high rent prices means that Japanese would need to minimize their purchases
Several small purchases
High operating costs especially because of the prices of rent and buildings in general
Inability to apply original supply chain model
Do you consider aspects such as waste resources and energy when purchasing daily products
Waste Disposal in Japan
Trash categorization
Costly trash disposal procedure
Impact on Walmart
ldquoRetailers effectively represented the interest of the manufacturer rather than that of consumersrdquo (Tsukiizumi 2004)
bull Protection from aboveRetailers are often protected from financial risks by wholesalers and manufacturers through a number of distinctive market practices (such as rebates) bull Price and distribution control
Manufacturers and wholesalers controlled prices by enforcing districting and exclusive dealershipsbull Closed-network impact to government
For foreign retailers Japanrsquos complex retail and distribution system has long been inaccessible so much so that the US government considered it a nontariff barrier and a structural impediment for US-Japan trade
Manufacturers Wholesalers Retailers Customers
Line of governance
Impact for Walmart
SCM strategyWalmart supply chain management system aims for strategic sourcing to find products at best price from suppliers Walmart establishes strategic partnerships with most of their vendors offering potential long-term and high volume purchases in exchange for the lowest possible prices
Small profit marginWalmartrsquos business model is based on a low price strategy and low transportation costs allow it to sell its products at the lowest possible prices EDLP allows Walmart to break even or make small profit per sales while customers also win by saving money buying at low prices
Culture challengeJapan is used to the top-bottom approach while Walmart insists on bottom-up approach Walmart has to challenge the unusually powerful Japanese suppliers and manufacturers to conform with its Walmart model
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Japan is a small country with limited spaces which has several implications for Walmart as below
Small housings and apartment sizes with high rent prices means that Japanese would need to minimize their purchases
Several small purchases
High operating costs especially because of the prices of rent and buildings in general
Inability to apply original supply chain model
Do you consider aspects such as waste resources and energy when purchasing daily products
Waste Disposal in Japan
Trash categorization
Costly trash disposal procedure
Impact on Walmart
ldquoRetailers effectively represented the interest of the manufacturer rather than that of consumersrdquo (Tsukiizumi 2004)
bull Protection from aboveRetailers are often protected from financial risks by wholesalers and manufacturers through a number of distinctive market practices (such as rebates) bull Price and distribution control
Manufacturers and wholesalers controlled prices by enforcing districting and exclusive dealershipsbull Closed-network impact to government
For foreign retailers Japanrsquos complex retail and distribution system has long been inaccessible so much so that the US government considered it a nontariff barrier and a structural impediment for US-Japan trade
Manufacturers Wholesalers Retailers Customers
Line of governance
Impact for Walmart
SCM strategyWalmart supply chain management system aims for strategic sourcing to find products at best price from suppliers Walmart establishes strategic partnerships with most of their vendors offering potential long-term and high volume purchases in exchange for the lowest possible prices
Small profit marginWalmartrsquos business model is based on a low price strategy and low transportation costs allow it to sell its products at the lowest possible prices EDLP allows Walmart to break even or make small profit per sales while customers also win by saving money buying at low prices
Culture challengeJapan is used to the top-bottom approach while Walmart insists on bottom-up approach Walmart has to challenge the unusually powerful Japanese suppliers and manufacturers to conform with its Walmart model
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Do you consider aspects such as waste resources and energy when purchasing daily products
Waste Disposal in Japan
Trash categorization
Costly trash disposal procedure
Impact on Walmart
ldquoRetailers effectively represented the interest of the manufacturer rather than that of consumersrdquo (Tsukiizumi 2004)
bull Protection from aboveRetailers are often protected from financial risks by wholesalers and manufacturers through a number of distinctive market practices (such as rebates) bull Price and distribution control
Manufacturers and wholesalers controlled prices by enforcing districting and exclusive dealershipsbull Closed-network impact to government
For foreign retailers Japanrsquos complex retail and distribution system has long been inaccessible so much so that the US government considered it a nontariff barrier and a structural impediment for US-Japan trade
Manufacturers Wholesalers Retailers Customers
Line of governance
Impact for Walmart
SCM strategyWalmart supply chain management system aims for strategic sourcing to find products at best price from suppliers Walmart establishes strategic partnerships with most of their vendors offering potential long-term and high volume purchases in exchange for the lowest possible prices
Small profit marginWalmartrsquos business model is based on a low price strategy and low transportation costs allow it to sell its products at the lowest possible prices EDLP allows Walmart to break even or make small profit per sales while customers also win by saving money buying at low prices
Culture challengeJapan is used to the top-bottom approach while Walmart insists on bottom-up approach Walmart has to challenge the unusually powerful Japanese suppliers and manufacturers to conform with its Walmart model
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
ldquoRetailers effectively represented the interest of the manufacturer rather than that of consumersrdquo (Tsukiizumi 2004)
bull Protection from aboveRetailers are often protected from financial risks by wholesalers and manufacturers through a number of distinctive market practices (such as rebates) bull Price and distribution control
Manufacturers and wholesalers controlled prices by enforcing districting and exclusive dealershipsbull Closed-network impact to government
For foreign retailers Japanrsquos complex retail and distribution system has long been inaccessible so much so that the US government considered it a nontariff barrier and a structural impediment for US-Japan trade
Manufacturers Wholesalers Retailers Customers
Line of governance
Impact for Walmart
SCM strategyWalmart supply chain management system aims for strategic sourcing to find products at best price from suppliers Walmart establishes strategic partnerships with most of their vendors offering potential long-term and high volume purchases in exchange for the lowest possible prices
Small profit marginWalmartrsquos business model is based on a low price strategy and low transportation costs allow it to sell its products at the lowest possible prices EDLP allows Walmart to break even or make small profit per sales while customers also win by saving money buying at low prices
Culture challengeJapan is used to the top-bottom approach while Walmart insists on bottom-up approach Walmart has to challenge the unusually powerful Japanese suppliers and manufacturers to conform with its Walmart model
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Impact for Walmart
SCM strategyWalmart supply chain management system aims for strategic sourcing to find products at best price from suppliers Walmart establishes strategic partnerships with most of their vendors offering potential long-term and high volume purchases in exchange for the lowest possible prices
Small profit marginWalmartrsquos business model is based on a low price strategy and low transportation costs allow it to sell its products at the lowest possible prices EDLP allows Walmart to break even or make small profit per sales while customers also win by saving money buying at low prices
Culture challengeJapan is used to the top-bottom approach while Walmart insists on bottom-up approach Walmart has to challenge the unusually powerful Japanese suppliers and manufacturers to conform with its Walmart model
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Japan-US Geert-Hofstede comparison
Power Dominance Index
bull Relatively equal
bull Japan is more hierarchical than US
Individualism Index
bull Contrastingbull Collectivism of
supply chain and relation to customer is difficult for US
Masculinity Index
bull Contrastingbull Japan strives
for quality and perfection While Walmart enters market with value-goods approach
Uncertainty Avoidance Index
bull Contrastingbull Japan may
have numerous restriction and laws which may be viewed as unnecessary by US
Long Term Outcome Index
bull Contrastingbull Japan may
plan ahead and more punctual and strict contrast to US
PDI IDV MAS UAI LTO
5446
95 9280
40
91
62
46
29JapanUnited States
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
First changes brought by Walmart is by successfully persuading Seiyu to dismiss 25 of their HQ staff including 1500 employees and managers
Japan never have anything like this mass layoffs because this kind of action would create too much embarrassment for a typical Japanese company
Walmart a US corporation is seen as the outsider who meddle too much in Japanrsquos community (Communitarianism)
Walmart viewed it as a companyrsquos priority to cut cost in order to implement EDLP (individualism)
This created a climate of resistance for policies that Walmart is trying to implement
Introducing cheap products from China doesnrsquot help especially with bad relations between Japan and China
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
High communitarianism high peer pressure need peer approval to make decisions
High uncertainty avoidance tried and true is better something new is to be avoided
Variety offered by Walmart is not attractive to Japanese who tends to choose a small selection of tried and tested product
Not to mention they are wary of the ldquonewrdquo products offered by Walmart
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Walmart failure in Germany
Wal-Mart entered the German market at the end of 1997 with the purchase of 21 stores from Wertkauf and added to this in 1998 with the purchase of 74 Interspar stores from the French company Intermarcheacute After only 4 years of operation in Germany it was clear that Wal- Mart was struggling with estimated accumulated losses at around 1 billion Euro although only estimates were available as the company published no accounts
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Reasons
The nature of the German market
The acquisitions
The senior managers
Corporate culture
Supply chain issues
products
Employee relations issues
Pricing issues
Customer relations issues
Image and publicity
Financial reporting
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
By 2006 Wal-Mart had 85 stores remaining in Germany In July that year these were sold to a rival company Metro In typical fashion no financial details were disclosed but the deal is estimated to have been concluded at less than the value of the assets at a loss to Wal-Mart of US$ 1 billion Just after the conclusion of the deal in Germany Wal-Mart sold all its stores in South Korea and by 2007 operates in only 13 countries Its international rival Carrefour operates in 29 countries Historically Wal-Mart has always done best in markets closest to the USA namely Mexico and Canada Asda in the UK is a rare success contributing 43 of Wal-Martrsquos international revenue
The failure in Germany is summed up by two academics thus ldquoWal-Martrsquos attempts to apply the companyrsquos proven US success formula in an unmodified manner to the German market
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
CAREFFOUR
As of 31 Dec 2012 Carrefour group operates over 9994 stores in 33 countries
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Carrefour is closing up shop in much of South-East Asia Its 44 stores in Thailand 23 in Malaysia and two in Singapore are for sale(2010)
Carrefour was one of the first foreign grocers to open shops in South-East Asia in the 1990s But the later-arriving Tesco proved cannier in figuring out what consumers wanted When the firm found out that Thai shoppers travelled for miles by bus to its ldquobig-boxrdquo stores it opened smaller stores in rural towns Carrefour focused on Bangkoks higher spenders and stuck to its hypermarket format
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
On April 28 2006 Carrefour the second largest retailer in the world sold its 32 hypermarkets in South Korea to ELand Corporation6 (ELand) for 175 trillion Won7 The sale marked the exit of Carrefour from the South Korean organized retail market Then agreed to 148 trillion in september
As a part of the plan Carrefour exited several markets including Japan Mexico Czech Republic and Slovakia and began concentrating on the markets where it had a strong position including Brazil Poland Turkey and China
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Failure in South East Asia South Korea
Choice of going alone(no local partners)
Activist shareholders to reverse the firms global expansion and focus on Europe
The company failed to localize its stores and the products sold according to the needs and preferences of Korean consumers
All top managements from France this was not viewed favorably by the local employees and Carrefour too often faced problems from local labor unions
Localization of products
A pleasant shopping environment and friendly service are crucial to satisfy the tastes of South Korean customers
South Korean customers tend to shop more frequently and buy less each trip than in other countries because of their desire for fresh food such as high-quality meats and vegetables
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
System
Due to Carrefourrsquos extreme level of store decentralization support areas
that were not directly under store responsibility such as IT and
logistics were normally treated as vendors Over time this led to
under investment and the companyrsquos support services
generally lagged behind the market leaders in terms of efficiency
Culture Dint Understand the culture of South Korea and applied global
strategies
EthicsNegative attitudes toward foreign
discount chain stores Carrefour has been criticized for the treatment of its workers throughout the world
LeadershipCarrefour filed a court case against
the local union demanding damages for alleged losses caused by trade union members coming to
work in their union jackets
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
On the departure of Carrefour (and the subsequent departure of Wal-Mart) from Korea the South Korean media reported that Native Korean retailers won a battle with the worlds retail Goliaths
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
TESCO
Tesco is the worlds third largest retailer with a turnover of pound72 billion ($115 billion) a presence in 12 countries with a market leader position in 6 of them With over half a million employees 6600 stores and a strong online business Tesco is dedicated to bringing best value choice and service to millions of customers each week
What drives us is our Core Purpose which is WE MAKE WHAT MATTERS BETTER TOGETHER
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Global Presence
1 UK
2 China
3 India
4 Malaysia
5 South Korea
6 Thailand
7 Czech Republic
8 Hungary
9 Ireland
10 Poland
11 Slovakia
12 Turkey
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Failure in USA
The stores had only self-checkouts
European model
Treat the US as one country
Unfortunate timing- Recession
Failure to understand that the US retail landscape is different from the UKs
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
METRO
Is a German global diversified retail and wholesalecash and carry group based in Duumlsseldorf It has the largest market share in its home market and is one of the most globalized retail and wholesale corporations
It is the fifth-largest retailer in the world measured by revenues (after Wal-Mart Carrefour Tesco and Kroger)
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Global Presence
Austria
Belgium
Bulgaria
China
Croatia
Czech Rep
Denmark
Egypt
France
Germany
Greece
Hungary
India
Italy
Japan
Kazakhstan
Luxembourg
Moldova
Netherlands
Pakistan
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Spain
Sweden
Switzerland
Turkey
Ukraine
Vietnam
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Kroger
The Kroger Co (NYSEKR) is one of the worlds largest grocery retailers with fiscal 2012 sales of $968 billion Krogerrsquos Family of Stores spans many states with store formats that include grocery and multi-department stores discount convenience stores and jewelry stores We operate under nearly two dozen banners all of which share the same belief in building strong local ties and brand loyalty with our customers
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Manufacturing Plants
Kroger operates 40 manufacturing plants and packages and sells items for other retailers under the Inter-American Products Company name
Dairies
BakeriesDelis
Meat Plants
Grocery Items
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Private Brands
Kroger Value
Banner Brands
Private Selection
Simple Truth Organic
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
Alabama KrogerAlaska Fred MeyerArizona Frys Smiths Frys Marketplace
Arkansas Kroger Kroger MarketplaceCalifornia Ralphs Food 4 Less Foods Co
Colorado King Soopers City Market King Soopers Marketplace
Georgia Kroger Kroger MarketplaceIdaho Fred Meyer SmithsIllinois Kroger Food 4 LessIndiana Kroger Kroger Marketplace Jay C Ruler
Foods Pay Less Owens Food 4 Less Scotts
Kansas Dillons Dillons MarketplaceKentucky Kroger Kroger MarketplaceLouisiana KrogerMichigan KrogerMississippi KrogerMissouri Kroger Dillons GerbesMontana SmithsNebraska Bakers Food 4 LessNevada Smiths Food 4 LessNew Mexico Smiths City Market Price Rite
North Carolina KrogerOhio Kroger Kroger MarketplaceOregon Fred Meyer QFCSouth Carolina KrogerTennessee Kroger Kroger MarketplaceTexas Kroger Kroger MarketplaceUtah Smiths Smiths Marketplace City Market
Virginia KrogerWashington QFC Fred MeyerWest Virginia KrogerWyoming Smiths King Soopers City Market
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
The Retailers Golden Rules of Globalization
RULE 1The home market is the linchpin of globalization
RULE 2Always bring something new to the market
RULE 3Differentiation is more important than synergies
RULE 4Timing is critical
