Industry Analysis
Transcript: Wide variety of products instead of specializing in specific products. Most of the products available in one retailer are available in other retailers as well. Retailers differentiate in terms of attractive prices, location convenience, promotions, online shopping, and customer service. Retailers offering private label products and unique products have competitive advantage and more power over consumers. Depending on differentiation, threats of substitutes ranges from low to medium. Technology Strong competition on the international level Other retailers are more established in emerging markets Europe's economic conditions Dependent on emerging markets for sales Retail Industry Analysis Asia More expansion in emerging markets Acquisitions Improve sales through new product development Cater consumers' needs through better E-commerce development and innovation Sales increased by 0.5% as a result of strong food sales. SG&A were reduced reflecting a 3.5% increase in recurring operating income. New Trends Carrefour Company Analysis Time Series There is a large number of suppliers who deal with retailers. High competition between suppliers to offer best quality and price. Retailers demand standardized products, thus low switching costs. Retailers can change suppliers if they are not content with their performance. Suppliers can be extremely hurt if a large retailer, with great market share, end their contract. Suppliers have a weak power over retailers. Main Revenue Streams Availability of Substitutes Contribution to the world economy Strengths The retail industry distributes finished goods to consumers. The largest sector of the industry in terms of revenues is the FMCG. Technological advances and online shopping have created multichannel. The industry is dependent on consumer's demand driven by personal income and interest rates. Success is factor of an efficient supply chain management. Global Sales From independent retailers to more chain stores. Chains are superior to independent retailers as a result of centralized buying. Barriers to entrance such as : Creating favorable supply contracts Establishing leases Economies of scale Competing with mature retailer chains Thus, weak threat of new entrants. With the increase ownership of smartphones, consumers don't differentiate between online and offline shopping means. Online shopping is even perceived to be more convenient. Due to the indifference among both channels, consumers expect the same service, including customer service. Online retailing in the US grew by 13% compared to only 2% growth in the retail industry. Retailers shouldn't perceive E-commerce as a threat, however they should consider it an opportunity to foster growth and increase their customer base. Ensure profitable sales growth Strengthen the financial structure Target increase in capital expenditure Simplify operating methods Carry on with the expansion plans Being a responsible retailer Domestic markets' slow growth. Growth opportunities in global expansion. In 2011, 23.8% from the top 250 retail's revenue was generated in foreign markets. 40% of the French and German retails' revenues were generated internationally. Threats Fast sales' growth with a 12% increase in 2012. Higher sales and expansion in Argentina and Brazil Profitability improvement in Brazil led to a 22.9% increase in recurring operating income 12 hypermarkets, 18 supermarkets, 157 convenience stores were added Bottomline Porter Five Forces Analysis The retail industry is a main player in the world economy as a provider of employment. Variety of employees needed, from skilled to unskilled, minors, and part time workers. In 2007, the retail industry had 32 million employees in the U.S. and Europe. Country Segmental Analysis Ratio Analysis In 2011, the total retail revenue from the top 250 retailers was $4.271 trillion. The industry realized a 3.8% profit margin and a 5.9% ROA. Latin America Private label products are purchased by retailers from manufacturers but are sold under the retailer's name. Today, they are considered a priority for retailers. Although they used to be perceived as lower quality, private label products are now competing with existing major national brands. Retailers acknowledge the fact that they need private label products to attract customers and ensure loyalty. Private label products result in unique personalized products that help differentiate against competitors. These products provide retailers with control over pricing and production. Second largest retailer worldwide Different types of stores Environmental conscience Trained, empowered, and diversified employees Private "own" brands Presence in emerging markets Little room for differentiation Underdeveloped E-commerce Private Label Products Net Sales Company Overview Globalization In China and Taiwan, Sales grew by 10.3%. Expansion in China resulted in 17 new hypermarkets as well as 2 cash & carry stores in India. Recurring operating income
Prezi Present
Prezi Video
Prezi Design
