Carrefour in Russia What Went Wrong

3092 Words Dec 29th, 2012 13 Pages
Introduction
The first part of this assignment based around the case study of Carrefour in Russia is to analyse the macro environment in Russia at the time of the case. Opportunities and challenges associated with that environment will also be considered. The best way to understand the macro environment in Russia is to carry out a PEST analysis. PEST stands for the political, economic, social and technological environments. This type of analysis can be considered an external appraisal of the business. The aim of this framework is to supply a reasonable overview of the different macro-environmental factors that affect a business’s strategy.
Political
To begin with I will consider the political environment in Russia which affects
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Technological
Changes in technology have become particularly significant in the post-millennium world. This is particularly true in terms of modern communication technologies. The creation of databases and electronic communications have enabled vast quantities of information to be shared and quickly distributed in a modern company enabling vast cost reductions, and often improvements in service. Carrefour didn't come across any problems when setting up operations in Russia as they already had well established information systems in their outlets all over the world so it was just a matter of bringing them to Russia and implementing them in the new outlets.
Industry Analysis:
Threat of New Entry:
Carrefour got it wrong from the start as they got the timing of entry all wrong, they made a delayed entry into the country, with their C.E.O. Thierry Garnier stating “We were waiting for the best moment to enter the market”, this is after other similar companies that Carrefour would be competing against like Auchan SA, X5 Retail Group and Metro AG had established a significant presence in the country. Carrefour then tried to gain some local along with specialist knowledge in having an association with local grocery chain Seventh Continent. In February of 2009 Carrefour made a non-bidding offer to buy Seventh

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