Introduction. Failure of Carrefour internationalization strategy in Russia

Failure of Carrefour internationalization strategy in Russia

Anna Chernishova

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Polina Khromtsova

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Victoria Shuba

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Ekaterina Kozhevnikova

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Instructor:

Andrei Yu. PANIBRATOV

Associate Professor

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Saint Petersburg

Contents

Introduction. 3

Chapter 1. Background. 4

1. 1. Company Overview.. 4

1. 2. History of the company. 6

1. 3. Internationalization. 7

1. 4. Russian Retail Sector 8

Chapter 2. Theory and Problem 11

Chapter 3. Methodology. 15

3. 1. PEST. 15

3. 2. SWOT. 24

Chapter 4. Company figures. 27

Chapter 5. Recommendations. 30

Introduction

While the Russian economy suffered a setback in 2009 due to slumping oil export sales and the effects of the global economic crisis, the retail sector remains a growth leader.

Main purpose of the paper is to define internal and external reasons of failures and possible alternatives for the company’s actions. While Carrefour's withdrawal is a setback for its goal to gain a presence in all of the BRIC countries (Brazil, Russia, India and China), the company maintains a presence only in two countries, Brazil and China. Carrefour is also reportedly in talks with a local partner in India, which could further boost its presence in strong growth markets. In the year 2009, in the framework of its internationalization strategy, Carrefour envisioned Russia as a high potential market for expanding its globally known brand. Despite its penetration to the market and beginning of operations, the company eventually failed and withdrew in winter 2010. Carrefour's exit from Russia undoubtedly affected other international retailers contemplating market entry.

The objective of this group project is to identify the mistakes that caused the failure of Carrefour in Russia, understand how it happened and if it could have been improved. The structure of the paper is therefore structured into three main parts. First, we started with the introduction of the company, its history. Further on, we describe situation on Russian retail market.

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