Strategic International Business Essay Example | Topics and Well Written Essays - 2500 words

Strategic International Business - Essay Example In order to gain a competitive edge in a new market, the concept of strategies adopted should entail steps that are different from those of rivals (Sekhar 2010, p.6). Currently the retail giant operates in twenty-seven countries across all the continents, but surprisingly missing in the world’s largest economy, the United States, after it pulled out in 1994. Various research findings reveal that retail business market penetration in developed nations such as Singapore and Netherlands range from 85 percent to 51 percent respectively. Additionally research work conducted by Ebeltoft Group and MacMillan reveal the business of consumer retail is fastest in developing nations and more so in south America, and Africa (Loeb, 2013). The research also indicated that the net profit in these regions was also the highest amongst retail firms operating there, compared to other regions. In these economies market penetration is not as saturated as the case in more developed economies but the French retail giant is heavily represented in Latin America. Carrefour’s Current Markets The retail giant operates in four Latin American countries; the Dominican Republic, Colombia, Brazil and Argentina collectively having 284 hypermarket stores, 151 supermarkets, 695 hard discounters, 48 convenience stores and 124 cash and carry stores. The retail giant, on the other hand, is weakly represented in Africa with a total of only sixteen hypermarkets, thirty-seven supermarkets and one cash and carry store spread out in North Africa. Given these scenarios, it would be imperative to for the firm to consider an expansion plan in sub Saharan Africa and particularly South Africa. However, while considering entering into the South African market, Carrefour must learn a lot from its previous market entry strategies that failed in, for instance, Japan where it was unsuccessful in understanding and meeting the needs of Japanese consumers. Carrefour failed to conduct thorough pre-entry m arket research, and thus while carrying out market intelligence, it should consider applying the SWOT analysis; considering each strategy’s strengths, potential weaknesses and how best it can utilize potential opportunities in the South African market. These include first the Strengths it is competitive in prices compared to the rivals, has relatively large stores with a range of non-food items, expansion growth has been impressive and it places emphasis on locally sourced products. Secondly, weaknesses in their home country they are beaten by local rivals, Casino, their own brands are generally underdeveloped and finally it did not study markets in the United States and Japan, which resulted in failure. There is the opportunity in expanding to modest infiltrated market such as South Africa; despite the threat of rivalry from more prevailing Wal-Mart after their entry into the South African market. South Africa It is a middle-income economy and home to bulging number of middl e class citizens, and with the government courting foreign investments into the economy; such moves seemed to have attracted Carrefour’s global retail rivals into the country such as Wal-Mart who are planning to enter the market. The country boasts of well-developed infrastructures and these developments provide a boosts for those firms planning to set up footprints into the country. The country is waking up to the