Introduction
The present report delves into the expansion of Carrefour, a leading multinational retailer in the world, into the United Kingdom retail market. The first part of the report describes both the micro and macro environmental factors, which this multinational retailer ought to take into consideration to reduce its risk of failure in the UK market. The second section explains how the UK government policies on mergers and acquisitions can have an impact on Carrefour’s growth strategies in the United Kingdom. The third part elucidates how Carrefour’s management can utilize Kurt Lewin change model of unfreezing, change, and Refreezing to prepare their staff for the envisaged UK venture. The last two sections evaluate Carrefour and its planning strategy and provides the recommendations on how Carrefour can carry out their planning respectively.
Micro and Macro-Environmental Factors that Carrefour Should Take Into Consideration to Reduce their Risk of Failure in the United Kingdom Market
The United Kingdom is one of the most vibrant retail destinations in the world. As a matter of fact, the retail sector is in this country is diverse and large and, therefore, provides the multinational retail corporations with numerous business opportunities. Consequently, Carrefour’s has made a wise decision to expand its operations in the United Kingdom market. Nonetheless, the success of Carrefour in this very promising market will depend on how it will handle different macro and micro-environmental factors. It is important to note that the micro-environmental factors are those factors, which do not affect all the players in the industry.
One of the micro-environmental factors that Carrefour ought to take into consideration in the United Kingdom market so as to reduce their risk of failure is the competition. The United Kingdom benefits from an innovative, diverse, and very competitive retail sector. Consequently, the retail market in this country is highly competitive. Carrefour ought to understand that there are numerous retailers operating in this market. For this reason, the company needs to formulate the strategies to help it beat the competition and reduce its risk of failure.
The other micro-environmental factor that Carrefour ought to take into consideration before entering the United Kingdom market is the nature of the consumers. In particular, the company should endeavor to understand the characteristics of the consumers in the United Kingdom retail market. They need to understand that ethical consumption and convenience shopping are top consumer trends in the United Kingdom market. Consequently, a good understanding of the nature of the UK customers will help Carrefour know how to satisfy their needs and, thus, reduce the risk of failure.
The other micro-environmental factor that Carrefour should take into consideration to reduce their risk of failure in the United Kingdom is the retail market structure. According to Burt, Sparks, and Teller (2010), the retail sector in the United Kingdom is operated through numerous mobile shops, a variety of single shops, and virtual shops. It is also operated through the chain stores. The understanding of this and other factors of the UK market structure will help Carrefour formulate the best business strategies so to minimize the risk of failure.
Unlike the micro-environmental factors, which do not affect all the players in the industry, the macro environmental factors affect all the competitors in the industry. These factors are common to all the players in the industry and are beyond their control. Carrefour should take into consideration all the macro environmental factors in the United Kingdom so as to minimize its risk of failure. These include the economic, political and legal, social and cultural, and technological factors. A good grasp of all these factors will help Carrefour know how to deal with the challenges they might bring and minimize the risk of failure in the UK retail market.
Some of the examples of the economic factors that they should consider to succeed in reducing the risk of failure in the United Kingdom market include the country’s economic growth and trends, economic situation, inflation rate, and interest rate, among others. As a matter of fact, the United Kingdom boasts of a high per capita Gross Domestic product. In other words, the United Kingdom is a highly developed economy, which is suitable for business. Besides, the United Kingdom boasts of an auspicious investment climate. However, the UK has a high debt. Carrefour should, thus, understand these economic factors to succeed in reducing the risk of failure in the UK retail market.
The political and legal factors that Carrefour ought to take into account so as to minimize the risk of failure in the United Kingdom market include the political climate, government’s economic policy, employment law, discrimination law, taxation, antitrust law, among others. It will be important for them to understand that there are numerous laws pertaining to the consumer protection in the United Kingdom. They also need to understand that the political climate in the UK is favorable.
Carrefour should also take into account the social and cultural factors such as the lifestyle of the UK people, trends, population growth, fashion, consumer buying patterns, and demographics, among others to succeed in decreasing the risk of failure in the UK retail market. It will be imperative also for the company to understand the technological factors such as research and development, information technology, the rate of technological revolution, and rate of innovation, among others to reduce its risk of failure.
How UK Government Policies on Mergers and Acquisitions can affect Carrefour’s Growth Strategies in the UK
The United Kingdom government supports the retail industry a great deal due to its value to the country’s economy. Carrefour will be required to adhere to the regulations on mergers and acquisitions in the United Kingdom when expanding its operations into this market. As a matter of fact, the United Kingdom government regulates acquisitions and mergers by utilizing some policies. The aim of regulating these mergers and acquisitions is to prevent the decline of competition in the market as well as ensure fair markets. One of the regulations that this government uses to ensure fair markets is the 1998 Competition Act. In essence, this Act prohibits the creation as well as the operation of cartels. For this reason, the management of Carrefour needs to understand that this regulation/policy will forbid the use of growth strategies that might lead to the establishment of cartels. Besides, the same Act prohibits the collusion of firms and abuse of dominant position. Consequently, Carrefour’s management ought to understand that this policy on mergers and acquisitions will bar the implementation of growth strategies, which might make the company collude with another company and abuse their dominant position in the retail market.
In the United Kingdom, the merger policy is essentially controlled under the 2002 Enterprise Act (Reid, Johnson, Browne, Drayson, and Michael, 2005). In other words, the Enterprise Act of 2002 governs the United Kingdom merger control. It is important to note that this act reinforced the regulators’ powers, particularly in terms of discovering and punishing the cartel-like behavior and market dominance. Thus, the management of Carrefour needs to understand that the regulators will have the power to penalize the company for implementing the growth strategies that make them behave like a cartel. The mergers and acquisitions, which involve the public companies in the United Kingdom are currently regulated by the Takeover Code. Ideally, this code calls for the equal treatment of all the shareholders of a company Carrefour’s managers should, thus, acquaint themselves with this code.
The United Kingdom government policies on mergers and acquisitions will significantly affect Carrefour’s growth strategies. Carrefour will be required to choose growth strategies that will not lessen the market competition. The company’s mergers and acquisitions will essentially be evaluated to determine whether there will be a considerable lessening of the competition. The United Kingdom government through its policies on mergers and acquisitions will, thus, make sure that Carrefour will not utilize the growth strategies that will result in the reduction of competition in the retail market. The aim of doing this will be to raise the economic growth as well as maximize the consumer welfare. Carrefour’s management should ensure that the growth strategies that they will choose will not affect the welfare of the consumers in the United Kingdom retail market. The management of Carrefour should not choose the growth strategies that will lead to price control. The United Kingdom government policies on mergers and acquisitions will disallow the growth strategies that will make Carrefour and its business partners control the price in the market.
How Carrefour’s Management Can Use the Kurt Lewin Change Model of Unfreeze, Change, and Refreeze to prepare their Staff for the Envisaged UK Venture
Kurt Lewin Change Model of Unfreeze, Change, and Refreeze essentially gives the business managers an idea of what implementing change entails when managing the employees. The expansion of Carrefour Retail into the United Kingdom market will involve some changes. The company will be required to relocate the employees from Greece to the United Kingdom. Ideally, some these employees might resist this change as expected. Consequently, Carrefour’s management will experience the problem of change resistance, and this might hinder the company’s expansion into the United Kingdom market. In an attempt to succeed in preparing their workforces for the envisaged United Kingdom venture, the Carrefour’s management can make use of the Kurt Lewin Change Model of Unfreeze, Change, and Refreeze. It is vital to note that these three stages can guide the Carrefour’s management on the way to prepare their staff for the envisaged UK venture.
The first stage, unfreeze, involves decreasing the forces, which maintain the status quo. According to Kritsonis (2005), unfreezing is essential to overcome the strains of personal resistance as well as group conformity. Consequently, this phase of Lewin change model will help Carrefour’s management in overcoming the opposition of their staff to change. Under this phase, the Carrefour’s management can prepare the staff to accept that the change is required. They can break down the existing state of affairs by dismantling the staffs’ current mindset about the envisaged United Kingdom venture. In particular, Carrefour’s management can in this stage develop a compelling message that demonstrates why the company needs to expand into the United Kingdom. They can succeed in persuading the staff why the company has to expand into the United Kingdom market after checking out of Greece by citing its poor performance due to the political upheaval and deepening crisis in Greece. In fact, this can show the staff why the company has to expand its operations in the United Kingdom.
Carrefour’s management can use the second phase, change, to prepare the staff to look for the new methods to do things. Burnes (2004) suggests that the group routines and norms must change to achieve successful change. In this phase, they can start leading the staff through the process of change. In other words, they can utilize this phase to make the staff start believing that Carrefour is expanding into the United Kingdom market and acting in ways, which support the expansion of the company. For instance, the staff can start familiarizing themselves with the Britain culture so as to know how they will associate with them once the company starts operating in the United Kingdom.
The aim of the third phase Lewin Change Model, refreezing, is to stabilize the equilibrium caused by the change through balancing the restraining and balancing forces (Kritsonis, 2005). Carrefour’s management can, thus, wait for the start of their operation in the United Kingdom market and then help the staff internalize the changes. For instance, they can start training them on the way to relate with the Britain employees. With time, the staff will feel comfortable in their new areas of operation.
Conclusion
Carrefour Company is one of the leading multinational retailers in the world. It has already succeeded in the other international markets. For this reason, its probability of success in the new market, the United Kingdom is high. The company’s success essentially originates from its unrelenting quest for localizing its service and product offerings to meet the needs of the consumers. The company’s combination of the global and multi-domestic strategies will make it succeed in the United Kingdom market. In expanding its business operations in foreign markets, Carrefour Company enters into strategic alliances. As a result, this helps it overcome both the macro and micro environmental factors.
Recommendations
In an attempt to succeed in expanding its operations in the United Kingdom market, Carrefour should form strategic alliances with the most recognized retailers. Ideally, this will help the company establish itself in the United Kingdom easily. Carrefour should also understand all the factors that might affect its business operations. In essence, this will help the company formulate the best strategies to overcome different business challenges. The company should also be familiar with the United Kingdom government policies on mergers and acquisitions so as to succeed in its strategic alliances. It is also important for the Carrefour to adequately prepare its employees for change.
Reference List
Burnes, B., 2004. Kurt Lewin and the planned approach to change: a re‐appraisal. Journal of Management studies, 41(6), pp.977-1002.
Burt, S., Sparks, L. and Teller, C., 2010. Retailing in the United Kingdom-a synopsis. In European Retail Research (pp. 173-194). Gabler Verlag.
Kritsonis, A., 2005. Comparison of change theories. International journal of scholarly academic intellectual diversity, 8(1), pp.1-7.
Reid, J., Johnson, A., Browne, D., Drayson, L. and Michael, A., 2005. Defence Industrial Strategy Defence White Paper.
