Entry strategy for Carrefour for entry into the UK market

It has more than 480,000 employees, and according to reports it has generated sales that are worth more than 93 billion to date. The company has expanded beyond France, by establishing stores in other countries such as Switzerland, Italy, and Belgium (Carrefour,pg1). Recently the company is considering to expand more by entering the UK market. United Kingdom is a state that comprises of four countries such as Wales, Northern Ireland, Scotland and Britain. It also has one of the most sophisticated and successful market in the world. Since the starting of the 21st century to this day, Carrefour is the second largest retail company (Palepu,pg 241). Analysis of the Current Situation of Carrefour Using the Porter’s Five Forces Porter’s five force is a business model that was formulated by Michael Porter in 1979, it evaluates and analyses the strengths and threats of a company or organization within an industry.

It evaluates the structure of the organization and its strategy. It also helps to describe how different industries are able to maintain differing levels of profits. Therefore in order to effectively analyze the current situation and environment of Carrefour, I will incorporate the porter’s five forces analysis of the company. Therefore for a new entrant to be in the level of Walmart and Carrefour, it has to produce products and services of high quality at a lower prices, so as to familiarize itself in the retail market. Other barriers to new entrants is the complicated legal procedures that a company has to follow before its establishment. Therefore baring this in mind, there is a low possibility of new entrant and this means that no new competitor.

Wide Range of the Substitute Products and Services There is a low possibility of emergence of substitutes in the retail market and industry. In the retail market, the substitute of the main and major retailers are the small convenience stores and mini supermarkets. PEST Analysis of United Kingdom’s Retail Market The PESTE framework below evaluates and analyzes the uncertain and dynamic environment of the retail market and industry in the United Kingdom. Political Factors Political factors controlling and dominating the UK’s retail industry and market are issue that are the outcomes of real politics. This factors include government regulations, policies, taxation, trade agreements and political stability. Political environment usually has a great impact on many things such as the economy of the nation and it also interferes with the international supply chains.

Political stability results to thriving and good businesses, while political instability destroys and hinders successful business operations. UK’s decision to leave the EU, has affected a lot of things including the United Kingdom’s economy, this is because it has resulted to great future uncertainties in the UK’s market and also the potential investors. Social Factors Social trends, changes in consumer preferences and demographic changes have a great impact on the retail industry in the UK. The current generation’s preference is very different from the previous generations, and it is set to change with time for the coming one. The beliefs, wants, experiences and expectations of consumers based in the United Kingdom has greatly changed, and this is because consumers have been exposed and experienced different products and types of customer services of the international market.

This has also made UK to be more diverse, therefore this means that any retail company and stores should be able to cater for all the needs of people from different cultures and ethnicity. Bearing in mind that Carrefour has been able to thrive in other diversified countries with different cultural preferences, this is prove that Carrefour is the best retail store that can cater for all the different preferences of UK consumers. The technological environment as discussed above presents a great opportunity that Carrefour can take advantage of so as to enter in the UK market. Therefore this factor helps any retail store including Carrefour to expand its operations to UK. For example in their consideration to enter the UK market, Carrefour can first establish online store.