The present study is an analysis as to how the hypermarket chain-Carrefour has been utilizing the product/market enlargement grid in the market. The tool used to determine the same is Ansoff Matrix where the current and the new merchandises are correlated with the current and the new markets. The ground for utilizing the matrix is that it establishes the standards required for increase in gross revenues therefore maximising net incomes of the company. It helps the company analyze the alterations it has made in recent times and the effectual net incomes that it has made as a consequence of the same. As per the effects it would be able to make up one’s mind whether it should follow the same scheme or follow it up with alterations. It has been found that Carrefour-UAE has been using the schemes formulated by this Matrix to big extents but there are certain drawbacks which are at present hidden under the trade name image that the company boasts of. We will therefore see what strategies that the company has used are and how much it has been benefited by the same.
Introduction
Carrefour is an international hypermarket concatenation that originated in the Gallic district in the twelvemonth 1957. Right from the clip of its foundation, the company has been on an enlargement fling and today has its range throughout the universe. The company has a net one-year gross aggregation of 85.96 billion Euros and a net income of 385 million Euros yearly as per 200 figures. It holds the differentiation of using 495,000 employees across the Earth. Equally far as its range in UAE is concerned, the company has its mercantile establishments throughout the state. Some of the major metropoliss which hold Carrefour mercantile establishments have been mentioned as follows: ( Carrefour-UAE, 2010 )
Dubai
Abu Dhabi
Fujairah
Ajman
Al Ain
Ras Al Khaimah
Sharjah
Presently, the hypermarket concatenation is being managed by the Majid Al Futtaim ( MAF ) Group. Besides, on history of this ownership, much of the Carrefour hypermarkets are located in the shopping promenades of MAF. Apart from the usual Carrefour shops, there are besides UAE Carrefour Express shops which have got limited scope of merchandises and changing monetary values as compared to the other hypermarkets of Carrefour.
Ansoff Matrix
The merchandise enlargement grid which is used by companies for obtaining a bigger portion in the market has been given by Ansoff. The undermentioned diagram gives an illustration of the same. ( Ansoff ‘s merchandise / market matrix, 2010 )
img006 pollex Intensive Growth Schemes: Ansoffs Product Market Expansion Grid
Here, the horizontal axis consists of the merchandises which could either be current or new whereas the perpendicular axis consists of the markets which could either be current or new. Depending on the type of merchandise and the type of market, one can invent a growing scheme as per the vicinity in context. Equally far as Carrefour in UAE is concerned, we can see the application of Ansoff ‘s Matrix in the undermentioned mode.
Market Penetration
The first of the schemes is market incursion scheme. Under the scheme, Carrefour looks to continuously increase its gross revenues and net incomes. The most efficient manner of making is this by enticing rivals ‘ clients and doing them loyal to Carrefour. The company has been utilizing this scheme efficaciously by set uping itself as the lowest monetary value hypermarket. It is an intangible plus that the company has sing the fact that there are other shops like Spinneys and Waitrose in UAE which offer certain merchandises at lower monetary values than that offered by Carrefour, yet the company attracts more clients under the ticket of lower monetary values. Besides, the company has been able to keep market incursion by spread outing the kingdom of clients by holding a nucleus competence in supplying everything at a individual topographic point at a sensible monetary value. So, even if the clients have to pay somewhat more for the merchandises that they get, this 2nd property goes great guns in pulling more and more clients. This is more common in countries like Fujairah and Ras Al Khaimah. The ground for the same is that these topographic points are smaller in size as compared to Dubai and Abu Dhabi where there is copiousness of shops. So, with Carrefour runing in a individual vicinity about supersedes the demands of any other. Another thing that Carrefour is really popular for making is its stigmatization. None of the other rivals in the market have a better trade name image than Carrefour. As a consequence of this client satisfaction becomes a major issue in increasing the figure of clients. All the other rivals of Carrefour are still fighting for keeping that trade name image. This has given Carrefour a important advantage of increasing its net incomes at regular intervals. Then marketing techniques like word-to oral cavity and viral selling semen into drama where the company does non even necessitate to set in any signifier of excess outgo to temptingness clients. Besides, the company keeps traveling on different strategies where the mark is to acquire the old stock out at monetary values lower than their MRPs. This has besides caused both the company and its rivals to profit enormously. ( Intensive Growth Strategies: Ansoff ‘s Product-Market Expansion Grid, 2010 )
The undermentioned diagram depicts market incursion scheme:
605rad15_fig1
Here, we can see the thought behind market incursion. It is about taking the portion of the rivals and utilizing it to increase the gross revenues and therefore net incomes of one ‘s ain company. We have besides seen the assorted grounds which have guided Carrefour to success in this subdivision.
Market Development
The market development as a scheme is used when a company wishes to increase or add on a new market with the bing merchandises that it has. In other words, the cleavage that it has done is further widened in this regard. This is one of the more hazardous of the schemes among those given by Ansoff. This is because, before implementing this scheme, Carrefour needs to cover some really important inquiries. They have been mentioned as follows:
Would it be profitable to aim a new market?
Would it necessitate the company to increase the figure of its merchandises?
Has the company done adequate research of the channels and the clients?
Besides, has the company given adequate focal point on its rivals ‘ range in the new market, the non-buying people in the current section and the new section as a whole?
Equally far as the analysis of Carrefour is concerned, the company has answered the first two inquiries by presenting the system of on-line handiness of merchandises which reaches a bigger market sing the fact that most of the consumers have been acquainted with engineering and are fervent users of on-line buying in UAE. Besides, the company offers free bringing in a figure of parts for orders that range above 500 AED. Besides, for orders less than 500 AED they charge a nominal sum of 12 AED. The company besides keeps records of the gross revenues of its rivals and so focuses extremely on the non-buying in the current section. Carrefour besides considers regular market research to cognize their topographic point in the market and therefore do necessary betterments wherever necessary.
The undermentioned diagram illustrates the market development scheme followed by Intersection:
market_expan
Here, we can see that a computing machine is being used to cover the full universe which is an indicant of on-line gross revenues that Carrefour has really late started to utilize.
Merchandise Development
The 3rd scheme that is worked out under the Ansoff Matriz correlates new merchandises in the current market. This is a signifier of experimentation where companies use their existing trade name image to come in into a new merchandise line hence increasing their entire gross. In this regard Carrefour has undergone a thorough market research so as to come up with either new merchandises or present certain alterations so that they could be used in conformity with the desires of the clients on the broader forepart. The consequence of the research had to be such that it is executable for the company to implement such alterations or new merchandise debut. Once once more with the current trade name image that Carrefour has, it has introduced some new merchandises into the market so that it could carry through this aim. These merchandises have been priced at different degrees as per the shop within the state. The merchandises that are now sold at Carrefour UAE have been mentioned as follows:
Baby Care
Beauty and Personal Care
Car and Automotive Accessories
Cleaning and Detergent
Clothing and Fashion Accessories
Computers and IT Equipment
Do-it-yourself merchandises ( DIY )
Electronicss and Electrical Goods
Fresh Fruit and Vegetables and other Food Merchandises
Frozen Food Merchandises
Garden and Outdoor Furniture and Accessories
Grocery stores – the usual scope although non every bit good as in France. Some differences compared to Spinneys, Choithrams, Park n Shop, or Waitrose – fewer western merchandises. No porc merchandises.
Home Appliances – electric refrigerators, rinsing machines, ranges / cookers, kitchen contraptions etc
Home Furniture and Accessories
Healthcare and Pharmacy ( some )
Mobile Phones and Accessories
Office Merchandises
Kitchen and Dining Ware
Television and Audio Merchandises
Toys and Children ‘s Entertainment
Travel and Outdoor Goods
This covers a immense diverseness and is systematically bettered in footings of assortment at the bing shops itself as per the demands of the people of the state. Besides, the state is a large tourer hub which accounts for the fact that Carrefour introduces or modifies its current scope of merchandises as per the season and the type of tourers that are expected to be a portion of the UAE touristry slot. This contains much of the merchandise development that Carrefour undergoes.
The undermentioned figure depicts the merchandise development scheme followed by Intersection:
product_development_funnel_copy_gn07
Here we can see that as per the market demands, the merchandises are filtered and eventually the most suited merchandises are made available to the market.
Diversification Scheme
This scheme is amongst the riskiest of the schemes that a company could of all time undergo. The ground for the same is that it talks about come ining a new market with the new merchandises. It is about a combination of the two schemes of merchandise development and market development which we have seen already. This scheme by and large comes into drama whenever there is a impregnation of the market and a company is non acquiring the types of net incomes or grosss that it ought to be acquiring. There are a figure of companies that follow this scheme but the instance has been a small different for Carrefour. The company has non had much of a manus in this scheme except for the fact that when it went with the online market debut of gross revenues, it besides started some modified merchandise bringing so that the clients could hold a customized experience of the merchandises that Carrefour follows. The company has besides followed this scheme in the yesteryear when it went with opening its shops at topographic points like Fujairah. The ground for the same is that the market was a small more rural than the bigger metropoliss like Abu Dhabi or Dubai. So, the company entered this new market with merchandises that were more suited to the urban metropoliss. But, because of the colossal success that the company has received at its terminals, it besides plans to open new shops now at the other topographic points which seem more distant than the others. The undermentioned diagram depicts the execution of the diverseness scheme:
Ansoff_diversification
Decisions
As per the analysis of the Ansoff Matrix that we can see from the above accounts, one can see that Carrefour has made an effort to increase its grosss hence the net incomes in all the possible manners whether with current or new merchandises or within current or in new markets. This has made the company grow to the degree that it is at present. The following table depicts the schemes that the company follows in all the four different ways:
Market Penetration
Low-price hypermarket.
One-stop topographic point for trade goods.
Use of Brand Image.
Bundled pricing.
Word-to-mouth selling.
Viral selling.
Merchandise Development
Introduction of new merchandises.
Alteration of bing merchandises.
Customization at regular intervals.
Increasing diversenesss of merchandises.
Market Development
Online merchandise handiness.
Free Delivery of Products.
Consistent research to picture current market conditions.
Diversification
Introduction of customized merchandises in the rural market.
Increased range of the shops.
Targeting tourers as per demands.
So, we can see that the company has been doing exceeding advancement in the market incursion scheme which calls for increasing the gross revenues and therefore net incomes within the bing market. The other schemes have been followed by Carrefour as and when the demand for the same has been. This includes alterations on history of season which invites a better grade of touristry to the customization as per the demands of the people of the state. Carrefour holds a differentiation in exposing its merchandises as per the expatriate population of UAE which goes over 80 % grade such that people from all nationalities are able to happen things that are suited to them. The company uses imports and exports as and when required so as to supply all that it finds the clients would desire. ( Merecer, 1995 )
Recommendations
We have seen that the Carrefour has been undergoing a big grade of promotions when it comes to execution of the market incursion scheme. The company needs to do certain that it besides proceeds likewise or on similar lines of advancement to follow the other schemes. The ground for the same is that today is a fast and invariably altering environment. So, it would hold to do even more alterations or present greater diversenesss in its merchandise scope. For illustration Carrefour lacks in the apparels section. The company should do it a portion of the merchandise development scheme so as to instill it in its line of concern. There are a figure of trade names which do non necessitate much of gross revenues scheme, but merely a mere show to play the fast one for the company. Once, this is done, Carrefour would be better off in footings of its gross aggregation. This would go more utile in the rural countries where the construct of one-stop shopping will come into drama.
Another facet where Carrefour needs to revise its scheme is in its pricing theoretical account. There are a figure of merchandises as mentioned in the hypermarkets which are sold at a monetary value higher than that elsewhere. The company uses its repute or trade name image to do it effectual but there are possibilities that the people might non be ready to pay the monetary value. This can be a hinderance in the market incursion scheme where the company looks frontward to increase the figure of clients. By and large, the new clients would non be able to pay a higher monetary value for the same merchandise that they would hold it cheaper at topographic points they were ab initio buying from. This needs to be checked so as to be productive in the long tally. Other than this, the company merely needs to go on its market research at changeless intervals so as to happen the new tendencies in the market and alteration consequently.
