This paper presents a comprehensive market entry and expansion plan for Carrefour, the French multinational retailer, targeting the Bangladeshi retail market. Using a PESTLE analysis, the paper evaluates Bangladesh's political, economic, social, technological, legal, and environmental landscape, finding it broadly favorable for foreign retail investment. A SWOT analysis of Carrefour identifies the company's global brand strength and diversified portfolio as key assets, while limited presence in emerging markets and past controversies are noted as weaknesses. The paper recommends a joint-venture entry strategy with a local partner and outlines a detailed marketing mix, including product, pricing, distribution, and promotional strategies tailored to Bangladeshi consumers. The BCG Matrix is applied to evaluate Carrefour's strategic business units, and a projected financial budget and implementation timeline are provided.
Carrefour is a French multinational retail company headquartered in Massy, France. In terms of revenue, it is the eighth largest retailer globally, operating supermarket chains, grocery stores, and convenience stores. As of January 2021, it has 12,225 stores in more than 30 countries (Carrefour, n.d.). Carrefour employs more than 321,000 people worldwide. Its turnover in 2019 was close to 80.7 billion Euros, more than half of which came from regions outside of France (Carrefour, n.d.). Carrefour invented the hypermarket model in 1963, and its subsequent success made it possible for the model to be replicated in several countries.
Carrefour's strategy to become the preferred retailer in Europe is to maintain a customer-oriented culture and ensure transformation and innovation. However, this is insufficient when it comes to global expansion. To be successful in global operations amid the fierce competition caused by market liberalization, companies must execute global marketing strategies to meet the needs of foreign customers (Chinomona and Sibanda, 2013; Day Translations, 2019). Before a product or service is advertised in a foreign country, it is very important to consider the unique political, social, technological, and cultural characteristics of the target population. Ignoring the needs of foreign customers will lead to a decline in the company's reputation and sales. This is why international marketing services are essential. Key questions companies must address include: What is the competitive landscape? What are the legal requirements? Is the government receptive to foreign business? What do consumers want? These are aspects that companies must take into account when adapting the marketing mix — products, prices, promotions, and locations — to the needs and complexities of new customers.
Even though Carrefour has made considerable global expansion, there are still potential markets in which it has not yet established a presence, particularly in emerging markets. One of these is the Bangladeshi market. This document therefore constitutes Carrefour's expansion and entry plan for Bangladesh.
The Bangladeshi market is shaped by factors beyond the company's control that nonetheless directly affect its potential for success. These factors will therefore determine both the suitability and the feasibility of Carrefour expanding into Bangladesh. A PESTLE analysis is best suited to describe this market (Hitt et al., 2016).
Bangladesh has a democratic system with a written constitution. Two large parties dominate politics with progressive agendas. However, elections and regime changes have historically been accompanied by problems. Periodic political violence and strikes can prevent the timely shipment of goods.
Bangladesh's economy is growing rapidly. It was promoted from a low-income country to a lower-middle-income country. After agriculture, the garment industry is the largest sector for both employment and exports (Sodry, 2016). The country has a mixed economy in which some aspects of business are determined by the interaction between buyers and sellers based on supply and demand, while the government controls others.
According to United Nations estimates, Bangladesh has a population of approximately 163 million people. About 87% of Bangladeshis are Muslim, followed by Hinduism (12%), Buddhism (1%), and Christianity (0.5%) (Sodry, 2016). People are generally friendly, enjoy festivals, and are satisfied with their circumstances. Community and social networks are a very important part of life in Bangladesh. Bengali is the official language; however, English is widely spoken and is taught as a second language in schools and universities.
As evidenced by the widespread use of social media, Bangladeshis are generally positive about new technologies. Mobile phone usage is extremely high, and mobile technology is widely applied in sectors such as banking and media. High-speed broadband infrastructure makes the country a promising new destination for e-commerce.
Bangladesh has a reasonably established legal system. However, corruption can pervade various areas of life and distort judgment. The undue political influence over the independent judiciary has long been a problem that has drawn criticism both domestically and internationally.
Hundreds of NGOs are active on environmental issues, and the media shows strong interest in environmental matters (Sodry, 2016). Business organizations must be careful not to violate environmental regulations. All factories are required to obtain permission from the Environment Department before commencing operations.
Carrefour's main products and services span supermarkets, supercenters, hypermarkets, discount stores, warehouse clubs, cash-and-carry outlets, and grocery and convenience stores. According to estimates, Carrefour's revenue in 2020 was 69,857 million Euros, a year-on-year decrease of 0.75%. The net profit of the retail store brand was 620 million Euros, a year-on-year decrease of 42.09%. The company employs more than 321,383 people to manage its global operations. Carrefour's main global competitors include Costco Wholesale, IKEA, Home Depot, eBay, Amazon, Target Corporation, Kroger, Coles Group, Tesco, Woolworths, Alibaba, LIDL, and Walmart. For the Bangladeshi market specifically, local competitors include Shwapno, Agora, Meena Bazar, Unimart, Lavender Super Stores Ltd., Khulshi Mar, Pick & Pay, Almas Supermarket, Prince Bazar Ltd., and Saad Musa City Center (Maria, 2014).
Global brand: Carrefour is the eighth largest retail store in the world. It operates in an estimated 33 countries, including Tunisia, Morocco, Kenya, Egypt, Georgia, Armenia, Albania, Turkey, Spain, Romania, Poland, Italy, Belgium, the United Arab Emirates, Saudi Arabia, Pakistan, Oman, Lebanon, Kuwait, Jordan, Iraq, Iran, Bahrain, Taiwan, Indonesia, and China. The retail company has a network of approximately 12,225 chain stores (Carrefour, n.d.).
Awards: Over the years, Carrefour has won numerous awards, including Best Retailer of the Year as selected by suppliers in 2020 and the 2017 Open Innovation Award. These awards reflect the company's commitment to growth and productivity.
Quality service: Carrefour has consistently maintained its position of providing quality services to clients, which is why customers return to its stores repeatedly.
Training and development: Carrefour has invested heavily in employee training and development, resulting in a proactive and well-trained workforce (Shaw, 2021). The company recognizes the value of professionally skilled retail employees.
Diverse portfolio: Carrefour has a diversified business portfolio encompassing hypermarkets, discount stores, cash-and-carry stores, convenience stores, and grocery stores. Its broad product portfolio allows it to target different types of customers across various categories.
Brand value: According to Forbes (2021), Carrefour's market value in 2020 was $14.7 billion, placing it at rank 451 on the 2020 Global 2000 list.
Controversies: Carrefour has faced numerous controversies over the years, including misleading advertising in France, a carbon monoxide incident in Indonesia, boycotts in China due to its French origin, a building collapse in Bangladesh, a slave supply chain in Thailand, and killings by security guards in Brazil and other locations (Shaw, 2021). Such incidents have damaged the company's reputation.
Exiting China: Carrefour has been closing its stores in China and selling them to local retailers. Withdrawing from the world's largest consumer market is widely viewed as an unwise business decision.
Limited presence in emerging markets: Carrefour's footprint in Africa and Asian countries is very limited. Developing countries hold extraordinary growth potential, and some of the company's products have not performed well in the Asian market.
Partnerships and alliances: Carrefour should actively pursue partnerships and strategic alliances with other retail stores and brands in different regions. Such relationships can reduce costs, develop networks, and increase revenue. The alliance with Tesco that began in 2018 (BBC, 2018) was a positive initiative, though it ended on December 31, 2021 (Makortoff, 2021).
E-commerce: The COVID-19 pandemic accelerated the growth of online retail shopping. Carrefour has an excellent opportunity to expand its business in the e-commerce sector and capitalize on this growth trend. Most importantly, the retail brand should use creative digital marketing techniques to promote online shopping.
Emerging markets: Having exited the Chinese market and faced various controversies in developing countries, Carrefour has a limited presence in the developing world. For sustained growth and to secure a larger share of the global retail supermarket market, the company must capitalize on opportunities in emerging markets across Asia, Latin America, Africa, and parts of the Middle East (Shaw, 2021).
Competition: Carrefour faces competition on two fronts — internationally and locally within Bangladesh. Kroger, Publix, Aldi, Costco, Walmart, Amazon, Lidl, and Tesco are its main international competitors. Locally in Bangladesh, significant competitors include Shwapno, Agora, Meena Bazar, Unimart, and Lavender Super Stores Ltd.
Changing customer preferences: The COVID-19 pandemic and global lockdown measures shifted consumer buying habits toward online shopping and home delivery services. Carrefour's large network of physical stores has meant that store closures have significantly reduced its revenue.
Legal requirements: Government regulations on labor laws, exchange rates, and other business regulations have increased costs and affected the profitability of retail brands. When Carrefour raises the prices of its products or services, its customer market share tends to decrease (Shaw, 2021).
Based on the SWOT analysis, it is evident that Carrefour has a strong market and product base guaranteed to support the company even in its expansion quest. The company's strengths provide the required foundation for the expansion process, its weaknesses can be managed, the available opportunities can be leveraged for increased profitability, and the identified threats can be mitigated and converted into opportunities for the company.
"Key barriers and challenges to market entry"
"Joint venture approach and STP framework for Bangladesh"
"Product, price, place, promotion, people, process, evidence"
"BCG Matrix assessment, budget, and implementation timeline"
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