Strategic Decision For The Global Market Essay
In today’s global market business has to make an important strategic decision where to locate their operations because location greatly impact both fixed and variable costs. The global market has enable outsourcing which has become a prominent strategic for many companies to enter new markets, extent to different consumers and increase profit margins. The case “Carrefour Misadventure in Russia” makes it clear that companies seeking to expand outside of the home country need to invest a great deal of time and resources exploring both the opportunities and challenges which provides the business successful strategy to gain market shares in foreign markets. An enormous amount of such opportunities and challenges are explained in this case with Russia’s emerging market, which poses great risks as well as rewards for outside companies willing to take their chances.
Market and Company Analysis
Carrefour is the second largest retail store in the world and the first one in Europe with goals to expand in the emerging market such as Brazil, China and Russia. Carrefour primary reasons to expand into Russia was the tremendous growth Russia has seen throughout the mid-2000s and the economists’ predictions for the growth surge to remain steady into the future. The Economist Intelligent Unit forecasted that Russia’s retail market was to grow from $480 billion in 2008 to $745 billion by 2011 (Deresky, 2014). Selecting the correct location can make or break a company’s…