Carrefour's failure in Singapore Essay

2805 Words Mar 23rd, 2014 12 Pages
NUS Business School
MNO3303 Organizational Effectiveness
Individual Assignment, March 2014

By Ho Sue Yuin

Case Study on Carrefour’s failure in Singapore

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Introduction

In November 2012, France-based Carrefour SA (Carrefour), the second largest retailer in the world and the pioneer of the hypermarket concept in Singapore, closed down its two megastores in Suntec and Plaza Singapura, marking Carrefour's exit from the Singapore retail market. According to the company’s statement, Carrefour
Singapore had decided to quit, as “expansion and growth perspectives do not allow reaching a leadership position in the medium and long term”.

Ho Sue Yuin A0088564N

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Complications faced by Carrefour in Singapore
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Carrefour's competitors were spread across the country with hundreds of stores.
While the product assortment was similar to other retailers’, Carrefour did not offer any distinct exclusivity in the products and services it offered. The prices were also slightly higher than the local rivals. Carrefour tried to tap onto the existing consumer phenomenon, whereby foreign brands were perceived as of the higher quality products and were previously more preferred by the locals due to rising affluence and brand awareness. However, local rivals could easily copy this approach with the ease of accessible resources and network distributions available due to globalization.

To overcome this issue, Carrefour should recognize the existence of threat posed by the local competitors who had more competitive advantages such as better understanding of the local markets, extensive network of suppliers and partners, etc.
Carrefour had to find a way to stand out and be different, by gaining a good reputation in a specific area or due to qualities possessed, to be perceived as the unique and outstanding hypermarket where customers would prefer over the other retailers. For example, the ability to provide high quality products, to offer low prices, to deliver excellent and personalized customer

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