Carrefour China, Building a greener store

Submitted by:Sachin singhMustahid aliTeam-13

Case Synopsis

▪ Enter in Beijing, china in 1995.

▪ By June 2006 company was operating 73 hypermarket 29 Chinese cities.

▪ Number 1 retailer in china.

Why green store?

▪ As competition is going to stepped up.

▪ Lack of centralized construction group.

▪ Wasting and consumption of energy which becomes very costly.

▪ To attract the potential customer

▪ To decrease the maintenance and operation cost

What is Green Store

▪ A new concept

▪ Built and operated with most advanced environmental technologies

▪ Reduce the consumption of non-renewable resources.

▪ Establishing a green store will provide sustainability through waste reduction and decrease cost of company and will increase sales by 35%.

▪ David monacco was hired with a clear mandate to centralize and standardize all asset expansion and construction activities.

▪ After realizing potential benefits of energy conservation, company has opted to open new green store in beijing before 2008 olympic games.

Problem Definition

▪ Lack of strategy for effectuating the green project.

▪ Unable to define the scope of project as it was complex.

▪ Sub problems

▪ Electricity consumption was so high.

▪ Maintenance was so high.

▪ All operational cost becomes 15 to 20% of total budget.

Problems cont.…..

▪ Climate was another problem.

▪ Frequent power shortage.

▪ Chinese law and legislation.

▪ Green certificate

▪ Compititior tesco, walmart, espicially local like: cv vanguard, rainbow.

Situation Analysis

▪ Carrefour provides western stores with local preference for freshness local strategies.

▪ 45ooo visitors visit each day making 20000-25000 sales transaction.

▪ China expected growth is 30% for next couple years.

▪ Climate problem, maintenance problem and operational problem letting them down.

▪ Since Olympic is going to began china was seeking foreign investment and environmental issues.

▪ Laws and legislation of china was harsh

▪ Green concept can save 30% of energy consumption hence increase sales.

▪ Initial outcomes was promising result in reduction of construction cost by 40%.

Power reduction comparison

Opportunities

▪ Reduce capital expenditures

▪ Land costs

▪ Labor costs

▪ Increase trade efficiency

Competition

• Aldi - European discount chain

• Tesco - Britain’s largest retailer of grocery and general merchandise

• Wal-Mart - world's number one retailer

Recommendation

▪ Strategic alternatives 1: Open a green store in Beijing before the 2008 Olympic and implement “Green Practices” throughout all stores in future.

▪ Strategic alternatives 2: Do not open a green store and rather only implement “Green” Practices throughout all the stores .

▪ Strategic alternatives 3: Do not go green focus on other issues such as operation and ownership issues.

Recommendation cont…

▪ Should make contract with electronic savings bigger companies such as GE, SCHNEIDER

▪ Use latest green technologies hcf3 refrigerators, energy management system, free cooling system, solar chiller air conditioner.

▪ Use recycling technologies.

Conclusion

As, Competitors are increasing, atmospheric, internal and external situation are not in favor, in fact the government policies regarding to the new construction project was very tough first they should implement the “Green Strategy” troughout of there stores and then think about the making of new stores