Sun Tzu’s Art of War and Business Strategy
The concepts from Sun Zi’ a Art of War and Business Strategies applied by Carrefour is sufficient and effective, so just keep up with those concepts and Carrefour will do fine in the future. Otherwise, they could also apply some of other concepts from Sun Zi to even strengthen their business and to even secure a more stable success from future uncertainties. Carrefour should open more famous restaurant inside such as famous retailer shop to attract more customer traffic.
Besides, they should be discovering more sales promotions to attract customers, such as rebates, premium and so on. This can be done by increasing advertisement in TV to attract more customers. By that, attract workers that they have many languages to communicate with customer in dealing with customer with different religious view. One of those concepts from Sun Zi that Carrefour could apply is the “To Dictate and Not to Be Dictated” concept. The company needs to create online supply platform, which will have Sears and Oracle.
This will allow the company’s retailers and suppliers exchange innovative information through the internet system and maximize the flow of products, hence minimizing their administrative costs. Carrefour also needs to embrace technological advances, which will allow the company venture into new markets where it can increase its customer base. The marketing strategies, which the company can embrace, include online, viral marketing, and sourcing strategies (Nina, 2008). The company needs to streamline its legal aspects to allow its expanding in Asian markets without any hurdles.
Carrefour gains of the utilization of emerging technologies can also come in the form of lowered tear and wear on equipment and facilities, which will decrease the maintenance needed for equipment and facilities (Gehlen & Lasserre, 2005). Carrefour has to show an exceptional capacity to adapt its concept to local business environment across the globe. By internalizing the achievement or failure of definite initiatives in one business design, Carrefour is capable to transmit the knowledge of this failure or success transversely in all business departments at little cost to the firm.
The company is competent to spread the expertise, which its human capital has gained by sending experts to work side-by-side with local managerial team. This structure enables the spreading of understanding within the firm both downstream and upstream, therefore, creating value for the whole company (Hoskisson, 2008). Besides that, Carrefour could also apply the “Knowing the Battleground and Engagement Time” concept. Whereby Carrefour could conduct a survey beforehand to determine what are the most suitable tactics and strategies to implement in a certain market. This will bring greater result and a swift success could be obtained.
Carrefour should seize the opportunity for expansion to other parts of China, especially the second-tier cities, which have a high growth potential. Since the eastern coastal cities where Carrefour has the majority of the market share are already saturated, there is little value in investing more money in the area. Moreover, it is timely for Carrefour to expand especially when personal income in China has seen a rising trend. This shows that the Chinese consumer market has a high potential for growth, and consumption and demand is likely to increase as disposable income rises.
While Carrefour’s main challenge is increased competition as its major competitors also have plans to expand and seize market share, its resources do give it a competitive advantage. Firstly, its one-stop shopping concept is one-of-a-kind. It recognizes consumers’ need for convenience and provides for it. Hence, Carrefour should continue to position itself as a company that delivers superior value offering to customers, as well as the place where one can satisfy most of one’s needs for products, entertainment and other services. Secondly, its management capabilities also give it a competitive advantage over other competitors.
Having a decentralized management gives the store managers flexibility to adjust the strategies to meet different local demands and needs in different locations. This allows Carrefour to increase customer value as it narrows down and customizes its strategy to meet the local customers’ needs. Thirdly, Carrefour’s low employee turnover rate gives it a cost advantage over its competitors and also raises overall confidence level of the company. Our recommendations are relative to the market development and are based on an evaluation of the forecast return within the coming 12 months.
The forecast return is the difference between the current price and our 12-month price target which includes the projected dividend. The equity market has historically yielded a return of around 10%. When we determine the recommendation for a share we use the 10% as an estimate of the return in the equity market. Since our recommendations are relative and risk-adjusted, it is possible to compare our recommendations across sectors and risk categories. In addition, the potential is stated in absolute terms via our price target. It should be borne in mind, however, that the recommendation is the anchor.
A buy recommendation will remain a buy recommendation until changed, even if price increases have taken the price ‘too close’ to the price target. The future and historical returns estimated in the research report are stated as returns before costs since returns after costs depend on a number of factors relating to individual customer relations, custodian charges, volume of trade as well as market, currency and product-specific factors. It is not certain that the share will yield the stated expected future returns. The stated expected future returns exclusively express our best assessment.