The United Kingdom - A Sophisticated Retail Sector

Question: Demonstrate the influence of environmental and behavioural factors on corporate size, structure and strategy. Understand the processes of business planning and policy making and the reason for change over time. Appreciate the effects of government policies towards monopolies and restrictive practices. Answer: Introduction Carrefour founded in 1959 by Marcel Fournier and Louis Defforey now operates as a multinational retailer based on the food and grocery sector. The company recorded current annual revenue of 75.86 billion Euro during 2014 based on operating along its 10,101 locations based along different countries. The paper reflects on the international expansion plans of the French retailer in the foreign market of United Kingdom. Macro and Micro Environmental Factors in UK Market Analysis of Macro Environment Political Impacts The current government of United Kingdom focuses on enhancing the buyer potential of the residents through the generation of larger income opportunities for the different households. Increased flow of money to the hands of the UK households would help in encouraging the consumers to continue their buying spree from the retail outlets. The analysis of the political impacts thus reflects a positive impact on the food retail sector in United Kingdom(Retail Economics , 2015). Economic Impacts The productivity of the retail and wholesale food chains is observed to counter a decline during the 2013 and 2014 periods owing to increase in the level of inputs compared to the amount of outputs generated by the wholesale and retail units. The growth in the amount of labour by around 2.3 percent during 2013 affected the productivity of the food and drink based retail sector by around 3.1 percent. The food wholesale sector also reflected a decline in productivity by around 1.6 percent compared to 2013 owing to the continual increase in input volumes(Department for Environment Food and Rural Affairs , 2016). The same is reflected in the following graphs. (Department for Environment Food and Rural Affairs , 2016) (Department for Environment Food and Rural Affairs , 2016) Social Impacts The consumers associated with the food and grocery retail and wholesale sector in United Kingdom are observed to reflect increased interest for an attractive store appearance along with the existence of needed customer service and also generation of potential service quality. The retail and wholesale companies are thus required for generating increased amount of investments for contributing in store expansion, enhancing store appearances and also in generating needed training to the customer service and operational staffs such that the retail staffs gain the needed potential for effectively servicing the diversified needs of customers to generate needed customer satisfaction(Wood McCarthy, 2013). The growth in the number of store outlets relating to the grocery retail sector along the period ranging from 2002 to 2013 is reflected as under. (Wood McCarthy, 2013) Technological Impacts The food retail and wholesale sector in United Kingdom reflects the incorporation of effective technologies like the multichannel marketing paradigm and also the use of agile supply chain. Both the multichannel marketing and agile supply chain technology incorporated by the retail and wholesale food and grocery retail chains require the use of different information technology gadgets and also different programs and software in that the same helps in integrating the different stakeholders like customers, suppliers, operational staffs and managers for meeting the objectives of retail productivity and performance. The incorporation of the multichannel platform contributes in effectively promoting and also in generating needed awareness about the retail and wholesale brand in the larger consumer market and also in helping customers gain a seamless shopping experience(Bevis, 2014). Legal Impacts The wholesale and retail organisations based in United Kingdom are required to strictly abide by regulation and policies regarding trading of organic food products. The trading of organic food products requires the certification to be gained from an approved organic control body (OCB). The food retail and wholesale firms face inspection from the concerned authority regarding the following of European Union (EU) standards for organic food before labelling and trading the products as organic foods(GOV.UK, 2013). Environmental Impacts Firms operating in the United Kingdom based food retail and wholesale sector are required to fulfil environmental objectives based on meeting the objectives of carbon footprint. The retail companies are required to reduce the emission levels of greenhouse gases like carbon dioxide and carbon monoxide from its distribution and transport operations and also from its retail and supply chain operations. Further, the food retail and wholesale companies are also required to potentially reduce the amount the amount of food wastage and also potentially reduce the level of usage of plastic packets in that the same would help in protecting the natural environment(Agriculture and Agri-Food Canada, 2011). Analysis of Micro Environment Consumer Bargaining Power The availability of internet enabled gadgets like laptops, tablets, Smartphones and computers and also its enhanced use by consumers in United Kingdom has helped the latter to continually interact with the different food retail and wholesale companies for gaining an effective understanding of the offers and promotions generated by the retail firms. Similarly, the food and grocery retail and wholesale firms based on the use of internet enabled gadgets also communicate with the customers regarding new product and service offerings. The above activity helps the consumers get armed with necessary information for generating effective decisions regarding purchases of the food products(OECD, 2013). Supplier Bargaining Power The grocery and food retail and wholesale companies based in United Kingdom are required to continually interact with the suppliers and vendor firms such that the same helps in monitoring the practices of suppliers and vendors in generating ethical and organic food products(Custance et al., 2012). Existence of Substitutes The firms operating in the food and grocery retail sector in United Kingdom face potential competition from the existence of several small firms and stores operating as substitutes. The substitute units generate products at reduced rates to the consumers. Internal Rivalry Food and grocery retailers like Tesco, Morrisons, Asda and also Sainsbury tend to intensely compete with each other in the United Kingdom market. The entries of discount retailers like Aldi and Lidl have further increased the level of internal rivalry in the market(The Guardian , 2014). Entry Barriers The entry for foreign food and grocery retailers in the UK market is restricted such that the foreign firms can only take resort of importing products to the UK retailers as a means to gain an entry in the retail sector. US retail firms work with UK based importers for supplying of food and grocery products for enabling market entry in the region(Vasquez, 2016). Impact of UK Governments Policy of Merger and Acquisition The UK Governments policy on merger and acquisition is evaluated to potentially affect the profit margins of the food and grocery retail firms operating in United Kingdom. The policy on mergers of food and grocery retail firms in UK requires the food and grocery retailers to largely reduce their prices for the different products and services. The same acts as an effective incentive for the consumers at the cost of the productivity and efficiency levels of the food and grocery retailers. The UK Government encourages the event of mergers for discouraging the actions of retail and wholesale companies of charging increased prices from the consumers(Hosken et al., 2012). Further, the expansion regime of large grocery retail companies like Tesco and Sainsbury are argued by the Office of Fair Trade (OFT) and like government authorities in that the expansion activities of the large retail corporations are being conducted based on the use of mergers and acquisitions. The convenience stores and supermarkets in their bid to expand and gain a larger market share in the UK grocery and food retail market are continually absorbing small and medium retailers in the region. The same is observed to affect the business potential of these small retail units and shops. Owing to the above reason, the United Kingdom government has generated policy measures for monitoring and deterring the expansion drives of the grocery and food retailers where the same is focused on acquiring small retail firms and shops conducting business in the region. The UK Governments merger and acquisition policy regarding grocery and food retailing largely focuses on generating equal chances for the local and small retailers to compete with the large retail corporations. The government also requires greater number of shopping alternatives to be available for the local consumers other than the big supermarkets. The above view of the UK Government regarding the merger and acquisition activities of the retail firms in United Kingdom for generating needed expansions affects the growth strategy of the retail corporations(Seely, 2012). The discussion reflects that the view taken by the UK Government regarding growth strategy of retail firms based on mergers and acquisitions is taken to affect the growth strategy of Carrefour where the wholesale retailer focuses on aggressive mergers and acquisition activities to expand its market share in the global marketplace. Application of the Kurt Lewins Change Model The Change management model envisaged by Kurt Lewin is carried out along three main stages like Unfreezing, Change and thereby Freezing. The Unfreezing aspect of the model requires the business institution focusing on generating change to motivate based on identifying the different opportunities that would be gained by the retail institution while expanding in the international market. The second aspect reflects on the Changes needed to be brought about in the existing organisational culture in that the same would help in adequately making the business institution to effectively adapt the culture of the foreign market. The same requires the organisational managers to communicate the changes required of the staffs based on operational and policy changes. Finally, Refreezing activities are required to be carried out based on the generation of norms and rules that would help the business institution to operate in the changed scenario(Cummings Worley, 2014). Reflecting on the Unfreezing approach, Carrefours management ideally reflects that its venture of expanding in the international market of United Kingdom would generate potential opportunities associated with its existent online marketing paradigm and also different types of formats like discount stores, hyper and supermarkets, and convenience stores. Carrefour operating based on a large number of diversified formats is taken to counter the competition in the UK grocery and food retail sector. Moreover, Carrefour also reflects needed potential of meeting consumer expectations for UK consumers regarding gaining of quality products from large stores at affordable rates(Schroeder, 2012). Reflecting on the Change aspect, the staffs and managers of Carrefour need to potentially understand the need for longer working hours and meeting tasks within strict deadlines. Further, the British working culture also reflects the need to conduct frequent meetings based on an unplanned fashion in major cases. However, planned meetings are also generated based on generating notifications to the staffs based on writing. The British operating culture also reflect the need for making effective presentations based on use of British accent. The same requires Carrefour for training its staffs to speak based on British accent. Carrefour to conduct its business operations in United Kingdom also requires understanding the need for teamwork and requires its managers for working in a collaborative fashion while taking decisions(Nanquette, 2013). Finally, reflecting on the aspect of Refreezing Carrefours managers need to enforce rules as long working hours, information sharing, working based on a team culture and collaborative framework to achieve organisational goals. Further, the staffs are also required to focus on developing British accent and also work to make effective presentations for sharing of potential information and decisions. Conclusion The analysis of the macro and micro environmental factors regarding Carrefours entry into United Kingdom reflects a mixture of motivators and challenges that are required to be identified by the retail institution as opportunities and threats while endeavouring to gain an entry into the foreign UK food retail market. Challenges are also reflected based on the UK governments stand regarding merger and acquisition based expansion strategy used by Carrefour. The Kurt Lewin model is also incorporated that would help Carrefour for effectively expanding in the UK retail market. Recommendations Carrefour is required to form effective partnership and ties with importing firms in United Kingdom in that the same helps the food wholesaler for developing an effective presence in the foreign territory. The French wholesaler is further required to form effective relationship with potential suppliers and vendors for gaining access to quality products and marketing them to consumers at affordable rates. Use of online marketing paradigm on an effective scale would help Carrefour in gaining needed penetration in the foreign market. References Agriculture and Agri-Food Canada, 2011. The United Kingdom - A Sophisticated Retail Sector. 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