Operational failure

Operational failure takes place when domestic retailer is simply not a good international retailer and domestic competencies do not transfer. We believe that this reason has nothing to do with our case because Carrefour is present in many countries (including developing markets) and is successful at most of them, so we do not doubt company’s great experience of transferring its competences abroad.

Problem

On the 18th of June 2009 Carrefour announced the start of business operations in Russia. "We were waiting for the best moment to enter the market," – Thierry Garnier, Carrefour Group’s Executive Director said. "We are in Russia for the long term." A little bit earlier, in May, a preliminary contract was signed: the company was going to buy a land in Penzenskaja oblast aiming to build a hypermarket there. But in June it became clear that plans have changed. The company began with two rented hypermarkets: the first one was opened in June in Moscow, the second one in September in Krasnodar. Also in September Carrefour announced that it changed its strategy from building its own facilities to renting them. Less than in a month in the financial report it was stated that the company decided to leave Russia: «Decision to sell the Group’s activities in Russia and pull out of the market, given the absence of sufficient organic growth prospects and acquisition opportunities in the short-and medium-term that would have allowed Carrefour to attain a position of leadership». [11]What has happened during just 4 month? How could a second-largest retail group in the world commit such a failure? Our research aims to find it out.

Дата добавления: 2015-08-18