MPK732: Marketing Management- Deakin Business School- Leclerc- The Expansion Challenge- Case Study- Nursing Assignment Help

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Case:

Michel-Edouard Leclerc, co-chairman of the private cooperative group E. Leclerc, France’s second largest retailer, leaned back in his chair and frowned at his executive team. It was late 2012, and Michel-Edouard was able to look back with pride on Leclerc’s stellar performance that year. However, now that he was meeting with his team to discuss plans for next year, he could see the difficulties that lay ahead. “While this year’s results have been reasonable, we need even more growth,” he said. “I would like to see profits up at least 6 percent in 2014. Even though the French market is the core of our company, international expansion is critical for our strategic growth. Let’s get back together in a week to review your proposed
marketing plan for the Australia market.”

Leclerc
Leclerc was founded in 1949 by Edouard Leclerc. It was initially a private company, but in 1962 it became a cooperative. By 2003 Leclerc had a rather complex organizational structure with three different divisions: stores, a central governing association, and a buying group. Leclerc stores were individually owned and operated. Each store had an owner who invested in the store, managed the operations, and enjoyed the profit. In most cases, store owners controlled several different stores. Nonetheless, store ownership was very fragmented; no owner controlled more than 10 percent of
the total number of stores.

The Leclerc stores were largely controlled by Association of E. Leclerc distribution centers (ACDLec). This organization was responsible for strategy, communication, and international development of the Leclerc brand. It was run by Edouard Leclerc and his son Michel Edouard. Independent store owners paid a fee to the association in exchange for the right to use the Leclerc brand. In return, retailers had to comply with the rules set by the association. For example, every Leclerc store had to have a price index equal to or below any other competitor in a given area. An independent store owner who would not comply with those rules could lose the right to use the Leclerc brand.

The Leclerc purchasing group (Galec) was responsible for buying and general agreement negotiations with the largest suppliers. In addition, there were sixteen local purchasing groups, operating with a high degree of autonomy, responsible for buying local products.

Leclerc was primarily a hypermarket operator; the company had a network of large retail stores across France. Leclerc had more than 500 stores in France in 2012.

Leclerc was beginning to expand into other countries, but the vast majority of sales were in France. Its international operations were basically break-even. Management was optimistic, however, that the international division would be profitable in five years.

The French Economy

In 2012 France was one of the world’s largest countries, with a population of more than 65 million. The French economy was the fifth largest in the world, behind the United States, China, Japan, and Germany. The French government had long played a major role in the nation’s economy, characterized by the term dirigisme. Following World War II, the French government decided to exert strong directive influence over the economy in order to accelerate rebuilding. The French government owned the national railway company SNCF, the national electric utility EDF, the gas utility GDF, the airline Air France, and the phone and postal services PTT.

Dirigisme delivered strong results for the French. Between 1945 and 1975 the French economy grew at an unprecedented average rate of 4.5 percent per year. The three post-war decades became known as “the Thirty Glorious.” As a result, the French population came to firmly believe in the power of the government to solve the country’s economic issues.

The socialist François Mitterrand, elected president in 1981, promised even more government intervention in the economy. He nationalized industrial companies such as Thomson, SaintGobain, Rhône-Poulenc, and Pechiney, as well as financial institutions such as Paribas, Suez, CIC, Crédit du Nord, CCF, and Rothschild. Unfortunately the economic success did not continue; the French economy slowed in the 1980s and 1990s.

As the economy struggled, subsequent governments began to shift away from dirigisme. Despite this shift, the government continued to have a major say in the French economy. Indeed, government spending, which in 2001 was 53 percent of GDP, was the highest among industrialized nations. In addition, despite a series of high-profile privatizations, the government held major stakes in companies in a wide range of industries, including banking, energy production and distribution, automobiles, transportation, and telecommunications.

The French economy strengthened in the late 1990s, with GDP growth of more than 3 percent in real terms.

However, GDP growth slowed sharply in 2001, and had mixed outcomes since then.

Considering the slow economic growth in the domestic market, Leclerc would like to enter the Australian market as part of their expansion strategy. Before making any decision, Leclerc would like to know more about the Australia market.

Case study problems:

1. Conduct a 5Cs and SWOT analyses with regard to the Australia market for Leclerc.

2. Develop segmentation, targeting and positioning strategies for the Australia market, based on your 5Cs and SWOT analyses.

 

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Posted on : April 17th, 2018
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