Main Products and general characteristics of Carrefour Company
Main Products and general characteristics of the firm
a). Carrefour Company is a French company that is chiefly involved in retailing and operates a network of hypermarkets offering food and non-food products. The company which was started in is the second largest retailer globally was created in 1959 with its headquarters in Boulogne Billancourt, France (Guide2Dubai, 2013).The company operates mainly in Europe, Asia and Latin America with boasting presence in 29 countries and further strong potential for further expansion. The current chairman and the CEO is Georges Plassat and apart from hypermarkets, it also does cash & carry which totaled into revenue of €76.127 billion in and an operating income €1.434 billion in 2012 respectively. The company further made a profit of €1,233 billion, total assets of € 45.844, total equity of € 8.361 billion and a total of 364, 969 employees respectively in 2012 (History of Business, 2013).
b). Carrefour Company successfully partnered with Majid Al Futtaim hypermarkets in the United Arab Emirates as a way of expanding their brands. Some of the Carrefour stores in UAE are Abu Dhabi-Airport Road and Marina Mall, Ajman, Al Ain, Sharjah, Ras Al Khaimah and Al Shindagha in Dubai. Some of the products that Carrefour deals in are cleaning and accessories, Fresh food, electronics, furniture, stationery and groceries. The company is considered to be offering products at cheaper prices making it amongst the cheapest supermarkets in UAE (Broomhall, 2012). The prices of the company vary especially online and therefore there is no much information concerning the prices of the products (Carrefour, 2013).
c). UAE experiences progressive technology use and the internet hence giving the company an edge in the technological market more than any other product. The company also has an opportunity of investing in online sales thus giving it an upper hand in reaching the whole of United Arabs Emirates’ population who are computer literate. There are great opportunities of doing business in UAE especially in Dubai and Abu Dhabi where and the company is striving to access a good market share in the region (Sidhpuria, 2009).
d). One of the scarcity issues the firm has to deal with is the Galaxy S4 and other smartphones. Due to increase in technological advancements, most of the population in UAE tends to embrace latest technology perhaps due to love for fashion. The love for fashion combined with desire for new technologies has increased the demand for the Galaxy S4 and other smartphones thus leading to scarcity. However, the company has curbed the scarcity by allowing pre-booking for those products instead of letting customers turn away with money (Grapeshisha, 2013)..
2. Analysis of Carrefour supply and demand
a). Supply of electronics particularly the mobile phones did not match the high demand in the previous years.
Prices are in US (100) dollars
Equilibrium price and quantity are $25 and 400 respectively
a). This product is a normal product and any changes in consumer income will affect the demand of the product. Higher income would lead to higher demand of the phones while low income would lead to lower demand of the Galaxys4.
b). The competitor of the Galaxy S4 is the HTC Smartphone legend whose prices are slightly lower than the one for Galaxy S4. However, any further change in prices may not affect the demand of Galaxy S 4much since even at higher price, consumers still prefer the Galaxy S4 compared to HTC Smartphone legend (Cherrayil, 2013).
c). Most of the consumers of the Galaxy S4 are the youths earning middle and higher income. The increase in their demography would automatically increase the demand for the phones. The lower the population of the youths, the lower the demand for the Galaxy S4. Furthermore, increase in the consumer incomes will also increase the demand for the products (Waqas, 2013).
d).The change in technology would automatically lead to increase of the supply of the Galaxy S4 to clear the stock and eventual decrease in demand. The demand would shift to the new technology or the improved version therefore reducing the phone’s demand.
e).Some of the competitors is Apple and Nokia companies and HTC Smartphones. There is ease of entry and exit in the industry since the market is very liberal. Any new entry with latest technology or features would automatically reduce the demand of the phone.
f). One of the costs of production is the designing costs of the galaxy S4. An increase in the cost of designing Galaxy S4 would reduce the supply of the phones while a decrease in the designing cost would increase the supply of the product.
g). Expectation is another non-price determinant factor that can change the demand and supply of the Galaxy S4. For instance, if there are speculations and expectation of a better Samsung Galaxy S5 then the demand of the Galaxy S4 will go down from P1 to P2 while the supply will increase from Q1 to Q2 as shown below.
3. Analysis of Price Elasticity of demand
a). The price elasticity of Samsung Galaxy S4 is inelastic demand since a large change in price would result into a slight change in quantity demanded. For instance, change in price from € 0.50 to €1.50 would result into a slight change in quantity demanded from 5 to 3.
b). The following price elasticity demand curve was depicted from the Sparknotes (2013).
Broomhall, Elizabeth. (2012, Jan 8). Revealed: the UAE’s cheapest supermarkets. Arabian Business. Retrieved from http://www.arabianbusiness.com/revealed–uae-s-cheapest-supermarkets-439026.html#.UdfQzdjKrIV
Cherrayil, Naushad.(2013, April 28). UAE retailers face shortage of Galaxy S4 and HTC One smartphones. Gulf News. Retrieved from http://gulfnews.com/business/technology/uae-retailers-face-shortage-of-galaxy-s4-and-htc-one-smartphones-1.1176366
Guide2Dubai. (2013). Carrefour Dubai.
History of Business. (2013).
Sidhpuria, M. V. (2009). Retail Franchising. New Delhi: Tata McGraw-Hill Education.
Spark notes. (2013).
Waqas Muhammad. (2013, April 19). Carrefour targets UAE expansion. Arabian Gazzette. Retrieved from http://arabiangazette.com/carrefour-targets-uae-expansion-20130419/