In short, the resource-based view provides a framework for management strategy development. So could it explain why different firms adopted different strategies even in the same environmental context.

Question

To analyze the strategies of Carrefour and how these strategies interact with
Chinese government policies and local market conditions?

CARREFOUR
The Carrefour Company was created by the Fournier and Defforey families in 1959 in
France, with the meaning of its name— “crossroads” expressing convenience.

Today, Carrefour has reached 30 countries in Europe, Latin American and
Asia. Currently, Carrefour has opened over 12,500 stores all over the world, with sales in 2006 of $114.9 billion and 456,000 employees.

Store Formats. Carrefour operates three store formats in China: Carrefour hypermarkets, Champion supermarkets, and Dia discounted convenience stores. Since Carrefour entered China in 1995, hypermarkets were the principal format for Carrefour expansion. Carrefour opened 150 Dia discounted convenience stores in Shanghai and 100 in
Beijing in 2003 (www.carrefour.com.cn), but faces fierce competition from 7-Eleven stores from Taiwan. Carrefour would more likely to learn from and follow 7-Eleven in the convenience store niche .

Store Location.
China is still a country with a relative low income level and hence the mainstream power of consumption remains in large and prosperous cities and city centers. Therefore, Carrefour establishes their stores in first tier cities and also in more prosperous and business areas . Yan (2003) argues that Carrefour’s strategy of store location enables its leading position among foreign retailers. He continued to argue that the decision of selecting Shanghai as the headquarter location enabled Carrefour’s rapid strategic expansion in China, due to a better sourcing environment, transportation conditions and marketing expansion capabilities in Shanghai .

Carrefour’s Positioning in China
The slogan of Carrefour China is “Happy Shopping in Carrefour” and the mission is
1995 Carrefour opened first hypermarket in Beijing.
1996 Carrefour entered Shanghai and Shenzhen.
1997 Carrefour opened stores in Tianjin.
1998 Carrefour entered Chongqing, Zhuhai, Wuhan, and Dongwan.
2000 Carrefour opened 5 hypermarkets to speed up its expansion.
2002 Carrefour opened 35 hypermarkets in 20 cities.
2003 Carrefour opened store in Hangzhou, and Dia Discounted convenience store entered Shanghai and Beijing
2004 The first Champion supermarkets opened in Beijing
2005 Carrefour opened its 60th store in Chongqing. to fulfill customers’ needs with full effort and provide the best prices to customers in every country, in every retailing format, and in the range of the best goods
(www.carrefour.com.cn). Therefore, Carrefour positions itself as providing both good shopping environment and low prices. In terms of low prices, Li (2004) suggests that the prices of goods in Carrefour are low, especially the prices of living necessities such as rice, food, oil and so on. This lower prices strategy provides Carrefour a competitive advantage in the retail market competition and leads more and more competitors to imitate. The lower prices come from lower costs of purchasing goods. It is suggested that Carrefour adopted various and rather flexible sourcing methods, such as local stores can purchase their own goods as long as the prices of purchased are low, and this leads to famous fake white wine affairs in Carrefour China (Qin, 2004).
However, according to Qin (2004), the actual shopping environment contradicts with its “Happy Shopping in Carrefour”. In Shanghai, there are many complaints on the difference between the prices on shelf and actually paid.
Furthermore, as most of Carrefour hypermarkets are in city centers, the limited car parking spaces bring inconvenience to customers.

Satisfying Customers’ Needs. Gaining valuable experiences in Taiwan has made
Carrefour understand the buying behavior and habits of customers in Mainland China.

Therefore, since their first entry in Chinese market, Carrefour decided to adopt fresh-market style for vegetables, fishes and other seafood, and to display the above products at lower prices in a better and cleaner environment (Child, 2006). This undoubtedly provides a fresh market image that Chinese customers are accustomed to.
In addition, Carrefour also believes that customers group for each store are different and unique, so Carrefour organize each store differently to adapt the needs of their local customer group.

Carrefour’s Sourcing in China Carrefour also purchases most of its goods within China.
However, each store of Carrefour has around 85% of its stock procured locally and has them distributed directly to each store. Carrefour believes that this flexibility of purchasing strategy does not only cater the needs of local customers, but also can lower the purchasing costs (www.supplychainer.com). Carrefour was reported already established 11 sourcing bases in big cities in China since 1995 and plans its 12th sourcing base in Yiwu, Zhejiang Province.

Carrefour entered in 1995
This early entry also provides Carrefour first-mover advantages by earlier establishing strong brand reputation and stable customer groups its stores to be located in big cities and city centers or prosperous areas.
The Chinese name of Carrefour is Jia Le
Fu, in which Jia means family, Le means joy, and Fu means happiness. It expresses the shopping environment in Carrefour will bring joy and happiness to families shop there.
Carrefour adjust their selling models especially for foods, to cater the buying habits of Chinese customers. On its first day of entry, Carrefour adopted fresh-market style for vegetables, fishes and seafood.
Therefore, when entering and developing in China, foreign firms need to understand, respect and follow the government regulations. Carrefour is adapted to Chinese market environment and hence expands and develops faster.
This may be attributed to Carrefour’s experiences in Taiwan. Through six years’ operation in Taiwan, Carrefour undoubtedly gained great knowledge on customers’ needs, preferences, and buying habits as well as Chinese social cultures, communication cultures and business cultures.