Carrefour’s Misadventure in Russia

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2000

This research will begin with the statement that with a move to the globalized era, successful businesses and large corporations are continuously looking for the opportunities of international expansion. The last trends show that emerging economies, especially BRIC (Brazil, Russia, India, and China) become more popular destinations for business development purposes. While there are many examples of successful penetration and business establishment on these markets, there are also examples of failures and misadventures. Entry strategy of the France-based retail giant Carrefour to the Russian market has been unsuccessful, and the company’s sudden exit has raised many different opinions in this respect.&nbsp. Below there is provided an overview of potential factors that might have its impact on the company’s failure continued with the further analysis of the Russian food retail market based on the Porters’ five forces model. While there was not clearly defined the reason of why Carrefour has made a decision to exit suddenly the Russian market, there were mentioned some obvious factors that might have contributed to this decision. These factors include: social and cultural factors. legal factors. late entry decision. absence of sufficient organic-growth prospects and acquisition opportunities, and political factors. Such social and cultural factors that have been identified as the potential barriers to the Carrefour’s expansion in Russia included: bureaucracy, corruption, red tape.

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