家乐福及麦德龙海外扩张策略.docx

Compare and contrast the expansion strategies used by two international supermarket groups and assess the importance of these strategies when operating in a global market.

Since the 1990, the process of globalization of consumer services is speeding up. Commercial enterprises begin to explore the way of global expansion. Viewed from the development trend of world distribution industry, supermarket is one of the most vibrant forms of business organizations in the world through 70 years of exploration and development from its inception in mid-1900s. Mc Clelland, (1962) said that supermarket has advantages of high throughput, open-shelf sales, centralized clearing, convenience, cheap, disposable shopping and so on. In situations of the domestic market saturation, liberalization of international trade, consumer demand for diversification, network information and other factors, commercial retail giants including Carrefour and Metro, have accelerated the pace of overseas expansion. Carrefour Group was established in 1959, which is the pioneer of hypermarket format. It is currently the largest retailer in Europe and the world's second largest international retail chain. In 1963, Carrefour was born in the outskirts of Paris, France. In 1973, Carrefour opened its first overseas branch in Barcelona, Spain, and began its expansion road. Warehouse stores founder, Metro in Germany was born in 1964. With its unique cash and carry transport system, Metro grew rapidly in a short time in Germany and other European countries, and is active in the world. Currently, Metro is the world's largest business chain corporation with system of cash and carry, and ranked third among business groups in the world.

Carrefour and Metro's overseas expansion strategies have similarities, but also have differences.
The similarities of Carrefour and Metro:
First, according to Song et al., (2012) when supermarkets of Carrefour and Metro enter foreign country markets, they commonly used chain business model. Through the chain business model, the supermarkets achieve a unified management companies which can reduce costs and give full play to the advantages of economies of scale. So a greater range of resources are in a reasonable configuration, thereby enhancing the competitiveness of enterprises.
Second, Carrefour and Metro supermarkets procurement type and quantity of goods are huge. To meet customers "one-stop" shopping requirements, usually a moderate type of supermarket has twenty thousand kinds of food and more than thirty thousand other types of goods, from fresh fruits and vegetables, fresh meat, fish, frozen goods, canned food, agricultural products to office supplies, household appliances, hand tools, daily necessities, hotel supplies, shoes, clothing, etc. Meanwhile, the quality of goods is also assured. It needs random checks on the procurement of the old merchandise and the new products need to be individually checked. It is responsible for the customers with the strict product quality.
Third, each supplier of the company headquarters and various branches worldwide contact each other through computer systems. Guo, (2013) pointed out that the suppliers have the same EDI barcode system, the same inventory management system, the same membership management system and the same cash register system. These systems are easy to get information of global stores from one store. Computer systems not only facilitate unified management, but also have brought great convenience to merchandisers, store employees and suppliers.
Forth, according to Sun and Ma, (2009) both Carrefour and Metro concern about the use of localization strategies. They include: personnel localization (the vast majority of employees are talents from the host country), purchasing locally (90% local sourcing of goods are in the host country), operating mode localization (according to the local people's consumption capacity and habits, adjusted sales methods such as big-ticket items delivery) and so on. So they obtain the goodwill and trust of the host country.
Fifth, Carrefour and Metro maintain good relations with suppliers. Kumar, (2005) said that Carrefour and Metro are implementing a mutual cooperation, symbiotic "win-win" relationship to suppliers. On the one hand, Carrefour and Metro relies on suppliers to provide quality, affordable products to meet customer needs. Meanwhile they increase business profits to continually expand the scale of operation. On the other hand, suppliers rely on Carrefour and Metro to sell their stock of goods, in order to free up capital and earn profits for sustainable development.

The differences of Carrefour and Metro:
First, according to Koc et al., (2010) Carrefour's supermarkets are generally in the bustling commercial district with dense population and high levels of consumption of customers. That provides ample display space for its low price strategy. On the one hand, people's consumption level is high, can afford higher prices, and thus the normal price of most commodities are not too difficult to accept by people. On the other hand, given significantly lower price on some products, that makes consumer feel a significantly different Carrefour. So, Carrefour also ensures its own interests. On the contrary, most addresses of Metro are selected on the outskirts of the motorway where the rent was low.
Second, Carrefour's main business is to do retail, whose main customers are scattered sporadic small-scale consumers. However, Coe and Hess, (2005) indicated that Metro's main customers are small and medium retailers. The business is wholesale and retail. The marketing idea of Metro is only for professional customers such as small businesses, retailers, restaurants, organizations, government departments and so on.
Third, the main markets of Carrefour are overseas and two-thirds of the Carrefour's businesses are in foreign countries. Carrefour focuses on the development of overseas markets. Its overseas branches are mainly in Belgium, Spain, Portugal, Italy, Greece, Turkey of Europe, China (including Taiwan and Hong Kong) of Asia, and American countries such as Brazil and Argentina. For Metro, as Palmer, (2004) has indicated, it has more than three thousand stores which are mostly located in Germany, extending outward to more than 20 countries such as the United Kingdom, France, Poland, and so on.

Forth, the main business form of Carrefour is supermarket and its operating characteristics are implemented cheap supermarket, self-service, low-cost or discounted price. While the overseas business form of Metro is membership of warehouse supermarkets based on the cash and carry system. Wang et al., (2012) said that the so called "cash and carry system" refers to the goods by the supplier delivery, and then Metro pay to suppliers using cash; customers shop in cash and they are responsible for transport by themselves.
Fifth, Carrefour adopted a multi-type of operations strategy. Its profits are mainly through fees charged to suppliers. If companies want to enter Carrefour, they need to pay the cost of six categories, including the characteristics of promotional activities, preferential access rights of in-store strong sales position, the privilege of entering the store, preferential access rights of a good marketing environment, holidays, develop market share and so on. Metro enters other country markets with its main format: cash and carry system. They form their own core competitiveness, and quickly occupy the market in the host country at the lowest cost and in a shortest time.

Conclusion
Carrefour and Metro have many successful points of the expansion strategies, such as advanced management concepts and management; maintaining good relations of cooperation with suppliers; localized operations; variety and excellent quality of goods; information management tools and need consumer demands.

We can get some inspirations from Carrefour and Metro. Firstly, companies must in-depth study the core competence whether it is able to effectively support the enterprises to more vitality to expand into new markets. Secondly, companies must respect for the host culture and differences in consumption habits. Thirdly, their industry forms adjust to local conditions and sustainable sources of earnings. Finally, companies should use the network to seek new development opportunities.

These strategies have great significance for sustaining and rapid development of retail enterprises and have a very important role for improving their competitiveness. Enterprises can better adapt to the new environment in the host country to expand their business. These strategies will be better integrated their own advantages into the local community, which is conducive to production and demand combined, intensive development, and to promote the manufacturer's products quality internationalized. In future, Carrefour and Metro supermarkets will take their successful roads to the global developments with their unique business philosophies, good reputation in the markets and the "constant speed" marketing strategies.

Reference
Coe, NM. and Hess, M. (2005). The internationalization of retailing: implications for supply network restructuring in East Asia and Eastern Europe. Journal of Economic Geography, 5(4), 449-473.
Guo, DN. (2013). U.S. Patent No. 20,130,021,139. Washington, DC: U.S. Patent and Trademark Office.
Koc, AA., Boluk, G. and Kovaci, S. (2010). Concentration of food retailing and anti-competitive practices in Turkey. Food Economics–Acta Agricult Scand C, 7(2-4), 151-162.
Kumar, N. (2005). The global retail challenge. Business Strategy Review, 16(1), 5-13.
Mc Clelland, WG. (1962). The Role of the Supermarket in the Distribution of Agricultural Products. Journal of Agricultural Economics, 15(2), 232-251.
Palmer, M. (2004). International retail restructuring and divestment: the experience of Tesco. Journal of Marketing Management, 20(9-10), 1075-1105.
Sun, J. and Ma, J. (2009). The Study of China Retail Business Development Strategy. International Journal of Marketing Studies, 1(1), P19.
Song, W., Schein, DD. and Ravi, SP. (2012). The development of Chinese supermarket enterprise own brands: the case of Shanghai. International Journal of Management and Enterprise Development, 12(2), 93-105.
Wang, Y., Kong, WW., Wang, Y., Wu, FH. and Wang, LM. (2012). The Strategy of Site Location Based on Business Area Theory: Case Study of Wal-Mart, Carrefour and Metro in Xi’an. Applied Mechanics and Materials, 209, 559-562.

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