Company Comparison
Table of Contents
2.1. Marketing and Service Strategies. 3
2.1.2. Physical Distribution and Digitization Techniques. 4
3.1.1. Market strategy and Service. 6
3.1.1. Treatment of Employees. 6
3.2.1. Market Strategy and Service. 7
Companies Comparison
Wal-Mart Stores is an America company multinational company which operates a series of stores large discount department and warehouse stores. Being the biggest company in terms of revenue based on Forbes Global 2000, it was founded by Sam Walton in the 1960s and took part in the financial exchange after 12 years. It has close to 8500 stores in 15 nations with varied names. Its operation in a number of nations has been effective in several nations like China and UK among others. To handle the clients in a friendly manner, accord affordable costs and train the staff has been regularly applied in Wal-Mart (Figure 1). Culture applied in Wal-Mart involves humanity and according the staff excellent training and motivations. The company shares information with the staff on a constant basis as well as according benefits like profit-sharing models to long term staff.
Carrefour is the second biggest retail company after Wal-Mart. The company has grown to have over 700 hypermarkets, close to 2500 supermarkets and 3200 discount stores as well as 2000 convenience stores. These stores were spread in Asia, Europe and America. The strategy applied by Carrefour was in location. The stores were situated on the outskirts of town which is access was made available due to highways and land was affordable (Figure 2). With rise in competition the company opted to differentiate itself with the creation of local goods purchasing center and selling labels (Cai and Zang, 2003). This aimed at acquiring the desires of the clients as it accorded value for money. The company similarly has a decentralized management; the store managers had the autonomy to make decisions which later brought success to the company. The culture applied by Carrefour is the handling of the staff as partners and according the, benefits. In the treatment of the staff, Carrefour looks more into a hand-down company operation. The staff is accorded a management attitude in every store.
2.1. Marketing and Service Strategies
Wal-Mart has created business stores that are meant to meet the needs of varied market sections. They compose supermarket, one-stop shopping store, discount store and small stores the deal in food. Wal-Mart in Asia is mainly on supermarkets in addition to warehouses.
Its success is based on “lowest price everyday” which is based on limitation of costs. This made the company to acquire value for money as well as acquiring the trust of clients. Hence Wal-Mart has the ability to limit what is spends on promotions and elevate turnovers of goods. The company has always operated on the belief that clients are first and deserve best. In Asia every staff applied three management notions: the respect for each and every person, service to clients and focus on excellence so as to be in line with humane service (Lamb, et al, 2008). They observe the eight teeth and ten-foot rules among others which have been the basis for the company in its transaction.
Carrefour acquires a two-form notion in Asia as well as France so as to acquire a steady development. At the first point, to make it possible for the stores to manage its activities quickly and keep a high turnover (Figure 3). On the other hand, there is a decentralization of authority by creating branches to connect with the locality (Cai and Zang, 2003). Carrefour opts to create another store after assessing the area, store space and the purchasing ability of the locality. For instance, she created a green store in an industrial area and retailing store in residential areas in Taiwan. It is through this act the company is able to acquire huge and small accounts at a go and then develop at a quicker rate when compared to the competitors.
Secondly, Carrefour looks into clients, staff training and market media. She develops excellent service delivery, product innovation and insists on staff development. She additionally looks on a strategic union so as to advance private labels goods to distribute increased offerings which will acquire the desires of one-stop shopping. Similarly, making use of the system of automation to centralize the buying processes of the stores, the company is able to manage orders, stock organization and processing of information for efficient management and creation of resolution.
2.1.1. Sourcing
Wal-Mart is not skilled when compared to Carrefour in international market growth. Wal-Mart acquires the activity of localization and centralization. The headquarters joins resources around the world and supply model as well as develops the method of cross docking so as to acquire cheaper costs.
Localization of the sources in China makes it possible for Wal-Mart to acquire the desires of the clients and limit the lead-time and allocation of cost. Wal-Mart similarly creates a global procurement base which offers sourcing data of the retailers in the region and centralizes the sourcing as well as allocation of products to every distribution point.
Carrefour has been keen on competitively of sourcing and turnovers of products. They exploit the ability of economies of scale and acquire local variation of what the client needs. In the case of local sourcing fresh produce aim is to acquire a fast reaction (Lamb, et al, 2008). Even though Carrefour begins to centralize activities, the distributors apply direct connection with the stores. The company has its goods sourced in the vicinity well above 95% in China from 1995 (Cai and Zang, 2003). They have created an international procurement point with the help of Shanghai and Hong-Kong in places that are charged with the headquarters in France. China has grown to be the greatest procurement point in Asia which procures close to $2 billion at present.
2.1.2. Physical Distribution and Digitization Techniques
Wal-Mart has used close to a billion in technological advances tools so as to interface their global stores with their headquarters. At the same time, they opt for their distributors to take up electronic data exchange. It is through this that Wal-Mart is able to send data at fast speeds and has kept charges in stock holding. Moreover, the headquarters may complete stock acquisition for each goods for over 4000 stores internationally in just 60 minutes (Lamb, et al, 2008; Ming-Ling Chuang et al, 2011). Currently, every store transmits information to their distributors using the internet and have goods restocked in two days while their competitors use five days.
I comparison to Carrefour, Wal-Mart has a comprehensive storage control model. Their transit and distribution method, more so in cross docking is well established. This technique makes it possible for Wal-Mart to restock its products two times a week and limit storage and distribution period. Consequently, Wal-Mart is able to limit stock delivery costs and transit hence improves revenue by 3% when likened with the rivals.
Wal-Mart collaborates with NCR to create a fast and working client response model to make a strong supply and restocking of every store. The store size is the biggest globally. The QR/ECR model effectively manages the information interactions with the distributors, Wal-Mart and their stores have a high operational efficiency, client satisfaction and revenue intake. The company has satellites to interact with the stores and show their new goods. It similarly is connected with IBM to create an innovative shopping site on the internet called Walmart.com. This site offers a complete variety of goods from cheaper to higher costs goods. With the delivery of goods, the company works with retailers for clients to acquire what they have bought.
On the other hand, Carrefour has created an international net exchange which is a distribution model. Internationally, over 50, 000 distributors terminate operations using technologies. The company site in France had begun offering food stuff, banking among other services by the second millennium. They are set to invest in the internet activities in the coming years.
2.2. Human Resource
To handle clients in a better way, offering an affordable cost and train the staff on a regular basis is done in Wal-Mart in China and other parts like the US. To handle new clients to the company in the best way, accords the belief of accountability, involvement and effective distribution of information (Alder, 1997). These are undertaken through clarification and inspiration processes which are done through instruction and coaching. It is by this involvement with the top level management for a time period that new employees are able to acquire familiarities and expertise. They have the chance of acquiring courses offered in Wal-Mart Institute and take part in a job cycle chance to make rigid their skills. The company on a constant basis reveals performance, every store has to make public its profit, buying tendency, selling tendency and discount level constantly so as to get the staff up-to-date. The sharing of profit is allocated to the staff that has been in the company for a long period of time. In regards to stock option, the staffs are able to purchase Wal-Mart stocks at 15% from the actual price used. By management of depletion of stocks, the staff is allocated benefits: 200 dollars.
On the other hand, Carrefour looks more into a hand –down technique of company legacy. At the start of the phase of global market entrance, France acquire the position of a top-level control regularly to permeate management thinking of “serve customers” and action based in every store abroad. When on goes into any Carrefour store, one will be able to note a good number of employees replenishing the goods constantly. The manager on the other hand will observe what is taking place after it is open.
The social duties at Carrefour advance physical training tendencies like Marathon and environmental safeguarding (Alder, 1997). They engage enthusiastically with the authorities as well as enterprises to limit pollutions by packaging. Carrefour and Chinese based companies engaged in a “green packaging” practice. The company wanted every store globally to make use of packages which led them to be recognized in the retailing business.
2.3. Company structure
Wal-Mart operates a chain of stores and warehouses and was recognized as having the biggest corporate revenue according to Forbes. The company’s governing body is the shareholders meeting that are held annually. It is responsible for choosing directors to the Board, approval of appointments of auditors from other companies, voting process on shareholder offers and modification of the articles of incorporation. The top-level management is composed of the Board of Directors. By 2007 the board was composed of 14 posts where 4 were dependent and the other not. The board is in charge of advancing plans and guidelines for the company. Backing it are five committees; there is the audit, executive, governance, compensation and stock option as well as the strategic and finance committee. The duties undertaken by the chairmen and chief officer are contrasted.
Carrefour on the other hand is distributed into two levels; there is the headquarters and the stores. The main office is found in Paris which is office by the Director of all operations. He is mainly concerned with lasting plans and policy formulation, financial and technical issues and offered advice when called upon. It is also charged with a basis of intellectual capital in regards to information and involvements. The headquarters is charged with the task of choosing new stores and where they are to be based. The headquarters are distributed in the sense that there is a national, regional and an overall head composing of European Officer (Cai and Zang, 2003). The EO in addition to the CEO would make up the executive committee which was charged with managing Carrefour’s activities.
Carrefour makes use of the decentralization form of management where duties are distributed from the top level to the bottom. The financial management is undertaken at the regional level, the managers of the stores are accorded the autonomy to make decisions regarding the stores as well as formulating projections. The projections are organized at the department level and are composed of sales and margins. The forecasts are negotiated with the manager and directed to the headquarters.
The store manager and department heads is the main people in charge of the stores. The manager was placed in charge in sharing out of the store, promotion and decoration plans. With the help of the department heads they would resolve on the product mix and ensure that every department offered logical placement. Every department was a profit base with targets and records on profit. The head had responsibility over buying, advertisement, cost of goods and coaching the staff.
3. Marketing Strategy Comparison in China
3.1. Wal-Mart
3.1.1. Market strategy and Service
The “Everyday Low Price” is a technique applied by Wal-Mart to its clients. This is an effective method to Chinese clients as the mean income of the population is quite small. Hence Wal-Mart has to make its costs be smaller so that it’s diminished price competitive benefit may be acquired. Hence Wal-Mart in 2002 stated that it would not offer pricing to suppliers’ control charges for goods that go into the stores (Ming-Ling Chuang et al, 2011). The main objective is to reduce the cost of suppliers and make it possible to limit costs to Wal-Mart. This is useful Wal-Mart moreover in the advancement of an excellent connection with suppliers.
Moreover, Wal-Mart makes use of an information model which makes it possible to limit stock-holding prices. Wal-Mart opts for suppliers to acquire electronic information exchange system which has the ability to send data fats and save on good holding charges. Every store directs data and orders to distributors with the help of the internet and has its goods reloaded in a short period of time (two precisely) while five days for the competitors (Dawson and Lee, 2005; Lamb, et al, 2008). The storage management model makes it possible for Wal-Mart to restock its good two times in a week as compared to its rivals which is done one time and diminish the space used for storing and time for allocation. Lastly, Wal-Mart has the capability to limit stock delivery and delivery charges leading to high revenue by approximately 3% when associated with its rivals.
3.1.1. Treatment of Employees
The success to Wal-Mart as a whole as well as in China may be tracked to the rigid faith in respect to every person. The staff is looked at like associates and not hands that re applied to ensure the job is done, they are seen as a source of ideas for the company. The employees have created a great difference to the company. The company accords focus to staff coaching lessons. Joe Hatfield the overall head and CEO of Asia Wal-Mart states that coaching lessons happen daily in the stores. The company places its staff in the US to go for Walton Institute, while those that know English are accorded with additional lessons like computers and management activities. Moreover, Wal-Mart China is attributed to 17% staff turnover which is quite small when compared to other stores in the world more so in regions where skills are limited in allocation and there work poaching (Dawson and Lee, 2005). In 2005, Wal-Mart called close to 120 staff members whose contract was a decade and meet at Shenzhen and have a good time. Wal-Mart has offered financial support reaching $3.5 million to charities and welfare companies. The company’s social responsibility programs in environment safeguarding, learning, child well-being, community enhancement and tragedy respite.
3.2. Carrefour
3.2.1. Market Strategy and Service
Carrefour manages three stores in China; hypermarkets, supermarkets and convenience stores. The hypermarkets are appropriate to China that is growing at a fast rate because of its small charges of goods. They are a threat to big department stores through small charges and small chain stores. China has a small income and therefore normal power of intake as seen in huge cities (Dawson and Lee, 2005). The company hence creates stores in the first tier places and in successful regions. The strategy of store locality makes it possible for its top level aspect. The selection of Shanghai as the base makes it possible for the company to grow in the country when one looks at the source setting, transit aspects and marketing growth when one compares it to Shenzhen where the base was.
The company makes use of a fresh-market style for farm and sea goods and to show the high goods at cheaper prices in better settings. This accords the company a better picture that the community is used to. Carrefour is of the belief that client’s clusters for the stores are varied and special; hence the company manages every store contrastingly so as to get to be acquainted with the desires of the clients (Cai and Zang, 2003). The company looks to be fifteen minutes ahead clients, holding the belief that goods are not advance or late. It is however involved in charging suppliers administration cost and looking for financial backing from suppliers. This led to some suppliers terminating the distribution to Carrefour.
The company buys its products in China just as Wal-Mart; however, every store has approximately 86% of its goods procured in the region and has them supplied to every store. The company is of the thought that being dynamic in buying goods in addition to meeting the desires of the clients of the area; it will limit the buying price (Lamb, et al, 2008). The company has acquired 11 locations for sourcing hence proving it being dynamic in organization. The company has a strong buying right to some sourcing places: Beijing, Shanghai among others in China.
3.2.2. Employee treatment
Carrefour set up an institute in Asia so as to meet its objective of coaching Chinese employees to acquire positions with obligations. The coaching involves the staff, supervisors, managers and offers general and specialized skills for the purpose of advancing their profession. Moreover, so as to keep coached and skilled individuals, Carrefour requires them to engage in a contract signing where each employee who is in engaged in transaction with a rival will refund the amount used in teaching them, while if they are with them they are accorded incentives (Dawson and Lee, 2005). Carrefour has strict policies on the training of its staff which makes it be able to maintain its skilled staff while losing a small number.
This paper has assessed the strategies applied by Wal-Mart and Carrefour, and offered a detailed analysis of the techniques used in terms of the structure of the company, management, human resource issues, culture and marketing methods applied. The paper has gone on to focus more specifically on China in terms of the strategies applied to its staff and the marketing techniques. Faced with an intensive competition in the China market, international retailers look to strategies and apply their techniques keenly in regards to the market settings and the company resources.
Alder, N.J. (1997). International Dimensions of Organizational Behaviour. 4th ed, Kent Publishing Co., Boston, MA.
Cai, Y. C. and Zang, Q. Z. (2003). “Carrefour China Strategies.” Hebei Daily.
Dawson, J. and Lee, J., (2005).International Retailing Plans and Strategies in Asia. New York: Routledge
Lamb, C., et al (2008).Essentials of Marketing. Mason OH: Cengage Learning.
Miller, D. (2011). Wal-Mart and Carrefour in China. Retrieved from: http://bear.warrington.ufl.edu/oh/IRET/Cases/Wal- mart%20and%20Carrefour%20CaseEdits.pdf
Ming-Ling Chuang, James J. Donegan, Michele W. Ganon, Kan Wei, (2011) “Wal-Mart and Carrefour experiences in China: resolving the structural paradox”, Cross Cultural Management: An International Journal, Vol. 18 Iss: 4, pp.443 – 463.
Figure 1: Stores Opened by Carrefour
Source: (Miller, 2011)
Figure 2: Stores Opened by Wal-Mart
Source: (Miller, 2011)
Figure 3: Comparison of Stores Opened by Wal-Mart and Carrefour
Source: (Miller, 2011)
Jermaine Byrant
Nicole Johnson
OVER
RATING
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