Does Carrefour create value for all its stakeholders - Free Essay Example

The triple bottom line: Does Carrefour create value  for all its stakeholders? Glossary Abstract à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦. 2 Chapter 2 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Research Objectives à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦. 6 Chapter 3 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Literature Review à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬  ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦ 7 Chapter 4 Findings à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦.. 8 Chapter 5 Analysis à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦..à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦.à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦.à ¢Ã¢â€š ¬Ã‚ ¦ 22 Chapter 6 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Conclusions à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦..à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦.. 30 Chapter 7 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Recommendations à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦.. 33 Appendices à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦ 36 Bibliography à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦. 37 Abstract The highly competitive nature of the food retailing market in Europe and a reverse of economic conditions has put French g iant Carrefour on the ropes. Inroads by competitors has eroded market share and profits and has left the company more vulnerable than it has ever been. The question as to whether Carrefour is creating value for its stakeholders thus comes under fire as a result of the aforementioned. This examination will seek to answer this query. 1962 marked a turning point in retailing history when the French company Carrefour introduced the hypermarket format in Sainte-Genevi just outside of Paris (Jones, 2006). The concept represent an outlet that is a combination of a supermarket with a full line discount store to result in a retail facility that is gigantic in terms of size as well as the number and types of products it offers under one roof (Axapata Retail, 2005). The concept represents both of these operations in a space that ranges between 200,000 to 3000,000 square feet which was successful in Europe as a result of the relatively small store framework in most urban centers and rural ar eas whereby shopping entailed visiting several small stores, unlike the United States which embraced shopping malls in these settings (Faculty.Inverhills, 2004). The success of the hypermarket concept in France created the fear that smaller stores would be forced to close and the country enacted a series of laws which made the building of these types of outlets more difficult as well as restricting the economic leverage these chains could utilize on suppliers, however these retailers still managed to continue their growth as a result of loopholes that existed in the legislation (Wikipedia, 2006). The underpinnings of said law, termed à ¢Ã¢â€š ¬Ã‹Å"Loi Gallandà ¢Ã¢â€š ¬Ã¢â€ž ¢, have become under fire recently to have amendments closing the means via which hypermarket retailers have been circumventing it (Wikipedia, 2006). As the second largest retailer in the world after Wal-Mart, and as the largest retailer in Europe, Carrefour is an international operation with 10,778 outlets in 21 countries (Carrefour, 2006): Table 1 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Carrefour Stores in Europe (Carrefour, 2006) Country First Store Number of Stores Hypermarkets Supermarkets Hard Discounters Conv. Stores Cash Carry Belgium 2000 505 56 261 188 France 1960 3704 216 1024 650 1650 156 Greece 1991 631 16 135 337 143 Italy 1993 1277 41 405 813 18 Poland 1997 100 31 69 Portugal 1992 387 7 380 Romania 2000 6 6 Spain 1973 3010 137 176 2668 29 Switzerland 2001 11 11 Turkey 1993 307 12 7 288 Europe 1960 9947 542 2077 4323 2794 203 Table 2 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Carrefour Stores in Asia (Carrefour, 2006) Country First Store Number of Stores Hypermarkets Supermarkets Hard Discounters China 1995 270 64 8 212 Taiwan 1989 36 36 South Korea 1996 31 31 Indonesia 1998 18 18 Malaysia 1994 8 8 Singapore 1997 2 2 Thailand 1996 22 22 Table 3 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Carrefour Stores in South America (Carrefour, 2006) Country First Store Number of Stores Hypermarkets Supermarkets Hard Discounters Argentina 1982 461 28 114 319 Brazil 1975 336 100 35 201 Colombia 1998 21 21 Dominican Republic 1999 1 1 Carrefourà ¢Ã¢â€š ¬Ã¢â€ž ¢s stakeholders include its (Carrefour, 2002): Customers, Suppliers, Service Providers, The governments, local authorities and communities in the countries and locales it operates, Employees, Franchisees, Shareholders, Banks, and Financial Markets All of the preceding are important and essential aspects of the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s operations and a part of the à ¢Ã¢â€š ¬Ã‹Å"triple bottom lineà ¢Ã¢â€š ¬Ã¢â€ž ¢, which represents a spectrum of criteria as well as values that reflects a measurement of a companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s organizational as well as societal success (Norman et al, 2005): Economic Environmental Social In some quarters, à ¢Ã¢â€š ¬Ã‹Å"triple bottom lineà ¢Ã¢â€š ¬Ã¢â€ž ¢ is analogous to à ¢Ã¢â€š ¬Ã‹Å"Corporate Social Responsibility (CSR) which calls for companies to utilize à ¢Ã¢â€š ¬Ã‹Å"triple bottom lineà ¢Ã¢â€š ¬Ã¢â€ž ¢ in their reporting. In accounting this discipline generally calls for an expansion of the manner in which the company reports take into account financial as well as environmental and social performance. Elkington (1998, p. 43) is credited with the development of this phrase, triple bottom line, when he asked if the holding of corporations to this maxim constituted progress in utilizing a phrase credited to Polish poet Stanislaw Jerzy Lec à ¢Ã¢â€š ¬Ã…“Is it progress if a cannibal uses a fork?à ¢Ã¢â€š ¬Ã‚  (quotationsbook.com, 2006). Elkington (1998, p. 44) states that à ¢Ã¢â€š ¬Ã…“à ¢Ã¢â€š ¬Ã‚ ¦ business people are waking up to the fact that key markets are on the verge of rapid change driven by new environmental standards and related customer requir ementsà ¢Ã¢â€š ¬Ã‚ . He adds (Elkington, 1998, p. 44) as a result of the foregoing à ¢Ã¢â€š ¬Ã…“à ¢Ã¢â€š ¬Ã‚ ¦ new bottom lines are being drawn alongside the old profit-and-loss statements.à ¢Ã¢â€š ¬Ã‚  The aim of the research is to delve deep beneath the retailing surface to uncover the advantages in Carrefourà ¢Ã¢â€š ¬Ã¢â€ž ¢s operations as well as its weaknesses. The retailing sector also holds considerable information and insights as to the trends, temper and salient points in the market, as do competitors. This information is both historical as well as contemporary and also calls for the utilization of proven theory and analysis techniques to evaluate and equate the market and competitive situation to provide a clear focus on what is right, and what is not so right in Carrefourà ¢Ã¢â€š ¬Ã¢â€ž ¢s operations to derive a potential fix. The research aim is to determine if the company is creating value for all its stakeholders under the triple bottom line variable, thus the examination must take into account the (Norman, et al, 2005): Economic Environmental Social aspects in order to determine the answer. Chapter 2 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Research Objectives The foundational premise as well as argument for the social responsibility of corporations is that the Earthà ¢Ã¢â€š ¬Ã¢â€ž ¢s resources are limited and at risk and that the delicate balance that is the ecosystem requires our understanding and attention to the fact that rampant use and destruction of the natural balance of nature through deforestation, fossil fuels, depletion of water tables and global warming carry with them the real potential for a catastrophic climate or nature breakdown (Waring, 1977). Her views of oil spills, wars, and other economic processes arising out of the concept of GDP, Gross Domestic Product, as a means to measure economic performance without taking into account the full scorecard that includes the effects of resource depletion continually gained in acceptance to the point where we now have Corporate Social Responsibility as a measure. The Kyoto Protocol represents an agreement under the U.N. Framework Convention on Climate Change is an outgrowth of the understanding of the preceding, and seeks to stabilize the greenhouse effect through the reduction of carbon dioxide and related greenhouse gases to stem the global warming trend (UNFCCC, 2006). With the preceding as an understanding of the changed corporate and social climate of the new age, this examination shall seek to examine the à ¢Ã¢â€š ¬Ã‹Å"triple bottom lineà ¢Ã¢â€š ¬Ã¢â€ž ¢ in equating if Carrefour creates value for all of its stakeholders. Chapter 3 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Literature Review The utilization of Michael Porterà ¢Ã¢â€š ¬Ã¢â€ž ¢s à ¢Ã¢â€š ¬Ã‹Å"Five Forces Modelà ¢Ã¢â€š ¬Ã¢â€ž ¢ (QuickMBA.com, 2004) along with a PESTLE Analysis (Renewal.ed.com, 2004), Industry Life Cycle Analysis and Resource Audit summarized and condensed the wealth of data, facts and information found in the contemporary research that was utilized to provide the foundation for underst anding the operations of the industry sector, competitors and Carrefour. The organizationà ¢Ã¢â€š ¬Ã¢â€ž ¢s strategies, competitive environment, industry sector, and internal factors were researched and analyzed utilizing contemporary sources to equate the foregoing from a number of differing angles and approaches in order to ensure the data base rested on a factual foundation from which to draw conclusions. Jonesà ¢Ã¢â€š ¬Ã¢â€ž ¢ (2006) à ¢Ã¢â€š ¬Ã…“How France is readying for a hypermarket free-for-allà ¢Ã¢â€š ¬Ã‚  provided background as well as relevant present day information which combined with industry sources such as Axapta Retail (2005), Carrefour, Business Week (2004), PriceWaterHouseCoopers (2000) and Ernest Young (2005) gave insights on the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s market and operational aspects. Norman et al (2005) explanation of triple bottom line in conjunction with Eklington (1998) explored that issue and provided the contextual underpinnings whereby data from Market Research (2004), McCrackenà ¢Ã¢â€š ¬Ã¢â€ž ¢s (1986) à ¢Ã¢â€š ¬Ã…“Culture and Consumption: A Theoretical Account of the Structure and Movement of the Cultural Meaning of Consumer Goodsà ¢Ã¢â€š ¬Ã‚ , and Bole et al (1991) à ¢Ã¢â€š ¬Ã…“Organic Foods in the UK à ¢Ã¢â€š ¬Ã¢â‚¬Å" Niche or Mainstream Opportunity?à ¢Ã¢â€š ¬Ã‚  could be evaluated in terms of subject relevance. The preceding also included research gleaned from statistical data as supplied by Food Drink Europe.com (2004), NutraIngredients.com (2003), International Retailing (2003) and Table data from Organic-Europe (2005). The research sources represented a broad look at all facets of the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s operations and aided in the correlation of recommendations as well as conclusions that provided a clear analysis of the problems facing a retailer in a highly prized and competitive market that is mature and seeking expansion as the next round of growth. Chapter 4 Findings 4.1 The Supermarket Retail Industry An examination of the retail industry, in spite of Carrefourà ¢Ã¢â€š ¬Ã¢â€ž ¢s invention of the hypermarket, today begins with Wal-Mart. Its impact on the worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s retailers as a result of its size and financial clout can be measured by the fact that its sales exceed the combined totals of the worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s second through fourth largest retailers (PriceWaterhouseCoopers, 2000). And this still holds true today (Ernest Young, 2005): Table 4 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Largest Retailers in the World Ranked by Sales (Ernest Young, 2005) 2005 Rank Company Sales USD (in millions) HQ Country 1 Wal-Mart $285,222 United States 2 Carrefour SA 90,297 France 3 Home Depot 73,094 United States 4 Mtro AG 70,093 Germany 5 Royal Ahold NV 64,615 Netherlands 6 Tesco PLC 62,284 United Kingdom 7 Kroger Co. 56,434 United States 8 Sears Holdings Corp. 55,800 United States 9 REWE Handelsgruppe 50,698 Germany 10 Costco Wholesale Corp. 48,107 United States 11 ITM Enterprises SA 47,218 France 12 Target Corp. 45,682 United States 13 Groupe Casino 45,155 France The dominance as well as threat of Wal-Mart has influenced other global retailers to find ways in which to grow in order to be able to resist an anticipated advance by Wal-Mart into its market(s). On of the particularities of the European market is that it is difficult for Carrefour to grow within their its market as a result of regulatory hurdles limiting large store growth. As a result the company had to look to global markets to expand, a fact borne out by just two of the U.S. based retailers having an international stance as opposed to the top European companies (PriceWaterhouseCoopers, 2000). The importance of including Wal-Mart in a discussion of European based hypermarkets and full discount retail operations is a result of the impact this retailer has had thus far in the market. Wal-Martà ¢Ã¢â€š ¬Ã¢â€ž ¢s entry into Germany, although it started off on the wrong foot, is still strong and its acquisition of ASDA in the United Kingdom has shown that its new strategy of à ¢Ã¢â €š ¬Ã‹Å"buying intoà ¢Ã¢â€š ¬Ã¢â€ž ¢ new markets through the take over of established operations, outlets, customer base, personnel and lines of suppliers. This has put the European retailers on notice. The highly competitive nature of the European as well as global retailing landscape which can not be either forgotten or discounted as growth strategies create low margins, and difficulties in opening new outlets. The fast way to rapid growth, states Dr. Ira Kalish, Los Angeles Director of PriceWaterhouseCoopersà ¢Ã¢â€š ¬Ã¢â€ž ¢ Global Retail Intelligence Unit is via à ¢Ã¢â€š ¬Ã…“Rapid entry and expansion into new countriesà ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ , which Kalish adds à ¢Ã¢â€š ¬Ã…“à ¢Ã¢â€š ¬Ã‚ ¦ is often best accomplished via strategic acquisitionà ¢Ã¢â€š ¬Ã‚  (PriceWaterhouseCoopers, 2000). Carrefourà ¢Ã¢â€š ¬Ã¢â€ž ¢s top competitors in the European market represent (BBC News, 2001): ASDA/Wal-Mart Tesco Intermarche Aldi Rewe Metro Group Schwartz Group (Lidl) E. Leclerc, and the highly competitive climate is marked in Europe by acquisitions as well as foreign expansion as they jockey for position (MeatNews.com, 2006). The à ¢Ã¢â€š ¬Ã‹Å"hard discountersà ¢Ã¢â€š ¬Ã¢â€ž ¢ are making the biggest sales gains in the European market, lead by ASDA/Wal-Mart, Aldi and Lidl, a subsidiary of the Schwartz Group. ASDA/Wal-Mart has continued to strengthen its United Kingdom market position through the acquisition of William Morrison/Safeway, and Aldi, which stands for Albrecht-Discount (Wikipedia, 2006), and its acquisition of Edeka, which was the largest food retailer in Germany and whose own strategy for growth was via acquisition (MarketResearch.com, 2004). The intra European battles for increased sales and market share will also be fueled by international activities on the part of Europeà ¢Ã¢â€š ¬Ã¢â€ž ¢s retailers. They are more active on the international stage than their American counterparts, with the exception of Wal-Mart and the former Safeway acquir ed in Europe by Wal-Mart which has garnered the reputation as à ¢Ã¢â€š ¬Ã‹Å"Public Enemy No. 1à ¢Ã¢â€š ¬Ã¢â€ž ¢ inside as well as outside the United States as a result of community groups, environmentalists and competitors (About.com, 2004). The lack of American food retailerà ¢Ã¢â€š ¬Ã¢â€ž ¢s international focus and the fact that they are reaching market saturation in their home market means that they will be seeking expansion in other locales. Europe is expected to be a target, however the sophistication of European food retailers in the complex European market is likely to stem any real inroads from American based food retailers who are likely to look to the higher growth markets of China, India, South America and other parts of Asia (About.com, 2001). Coincidently, the aforementioned markets are likely to represent the new battleground for European retailers as well, as a result of the limited growth opportunities in Europe where expansion through acquisition is the number one methodology (About.com, 2001). Carrefour is taking this same route as its 2000 acquisition of Promodes indicates (BBC News, 2001). According to Richard Parks of Retail Intelligence, major mergers among European retailers is the key growth and expansion strategy because of Wal-Martà ¢Ã¢â€š ¬Ã¢â€ž ¢s entrees, thus they will have to think more in terms of international expansion to counter Wal-Martà ¢Ã¢â€š ¬Ã¢â€ž ¢s financial clout and size (BBC News, 2001). Parks continued that Retail Intelligence sees two or three major European retailers emerging that will then battle U.S. based food retailers internationally (BBC News, 2001). Thus, the European food retailing sector is one with decidedly international designs to fuel growth, stability and self preservation in an acquisition hungry market. 4.1.1 Social Enterprise Analysis Corporate Social Responsibility is a term that describes a corporationà ¢Ã¢â€š ¬Ã¢â€ž ¢s obligation to understand the needs of its stakeholders in it s business operations and to be sensitive to the ramifications arising from it. The foregoing, stakeholders, represents those that are either influenced by and or those that can influence the decisions and actions of a company in local and or global terms. Corporate Social responsibility is linked to principles represented by à ¢Ã¢â€š ¬Ã‹Å"Sustainable Developmentà ¢Ã¢â€š ¬Ã¢â€ž ¢, which proposes that companies are obligated to make decisions that are not just based upon economic and financial factors, but includes the social as well as environmental consequences of activities as well (Wikipedia, 2006). The concept of à ¢Ã¢â€š ¬Ã‹Å"sustainable developmentà ¢Ã¢â€š ¬Ã¢â€ž ¢ represents the understanding that the process of meeting todayà ¢Ã¢â€š ¬Ã¢â€ž ¢s needs in the development of business opportunities, land, cities, communities and other facets must be considered from the standpoint of the impact on future generations as well. The preceding recognizes the finite resources of the planet and the need to limit as well as overcome environmental degradation in consort with economic development and social equity. Corporate Social responsibility is in excess of any charitable operations and or support or donations of a company. It requires a corporation to take into full account the representative impact its decisions have upon all stakeholders: Customers, Suppliers, Service Providers, The governments, local authorities and communities in the countries and locales it operates, Employees, Franchisees, Shareholders, Banks, and Financial Markets The precept of corporate social responsibility means that the company balance the needs concerning all of its stakeholders and the pragmatic aspects of generating a profit along with the rewarding of stakeholders in an adequate manner. The preceding sounds and is a complex balancing act that proposes that companies are in an implied partnership with the environment as well as society at large and thus the narrow approach of business interests for its own sake is no longer applicable (Wikipedia, 2006). Carrefourà ¢Ã¢â€š ¬Ã¢â€ž ¢s suppliers are between 4,000 to 15,000 depending upon the country in question with the main issues in this area are (Carrefour, 2002): The traceability of products Supplier relationships The quality as well as safety of the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s food and non-food lines The social conditions relating to how products are manufactured Carrefour was listed on the Dow Jones Sustainability Index for the first time in 2002, with the following comments from Gabriela Grab, the Sustainability Asset Managementà ¢Ã¢â€š ¬Ã¢â€ž ¢s retailing analyst à ¢Ã¢â€š ¬Ã…“à ¢Ã¢â€š ¬Ã‚ ¦ the Group provided evidence in 2002 of greater organizational transparency à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚  (Carrefour, 2002) which Ms. Grab indicated was a result of the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s first Sustainability Report. Ms. Grab (Carrefour, 20002) added that the foregoing came from a company in an industry sector à ¢Ã¢â€š ¬Ã…“à ¢Ã¢â€š ¬Ã‚ ¦ where trading practices commonly lack clarity.à ¢Ã¢â€š ¬Ã‚  The assessment went on to indicate that the company à ¢Ã¢â€š ¬Ã…“à ¢Ã¢â€š ¬Ã‚ ¦ is still below the sectorà ¢Ã¢â€š ¬Ã¢â€ž ¢s average on economic criteriaà ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚  (Carrefour, 2002), which consist of corporate governance, risk management as well as supply chain management, and code of conduct, but added that Carrefou rà ¢Ã¢â€š ¬Ã¢â€ž ¢s à ¢Ã¢â€š ¬Ã…“à ¢Ã¢â€š ¬Ã‚ ¦ environmental and social ratings outperform those for the sectorà ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚  (Carrefour, 2002) in respect to how the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s suppliers impact upon the environment as well as Carrefourà ¢Ã¢â€š ¬Ã¢â€ž ¢s à ¢Ã¢â€š ¬Ã…“à ¢Ã¢â€š ¬Ã‚ ¦ strict requirements on working conditionsà ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚  (Carrefour, 2002). The mixed comments contained in Ms. Grabà ¢Ã¢â€š ¬Ã¢â€ž ¢s (Carrefour, 2002) statements were included in the companyà ¢Ã¢â€š ¬Ã¢â€ž ¢s own report thus indicating a seeming propensity to be transparent in its disclosures and thus also representing the intention of providing honest informational content. Further evidence of Carrefourà ¢Ã¢â€š ¬Ã¢â€ž ¢s social responsibility is provided by the ODE, which assesses French companies concerning the potential for being represented on the FTSE4GoodIndex. Pierre Naudot, an analyst with ODE stated that à ¢Ã¢â€š ¬Ã…“Decent worki ng conditions and a ban on child labour have been (ODE) priorities in recent yearsà ¢Ã¢â€š ¬Ã‚  (Carrefour, 2002), and that Carrefour has been in partnership with the INFANS Association à ¢Ã¢â€š ¬Ã…“à ¢Ã¢â€š ¬Ã‚ ¦ in supervising suppliersà ¢Ã¢â€š ¬Ã‚  (Carrefour, 2002). Naudot (Carrefour, 2002) continued that à ¢Ã¢â€š ¬Ã…“à ¢Ã¢â€š ¬Ã‚ ¦ Carrefour products are manufactured in accordance with basic human rights and ILO requirementsà ¢Ã¢â€š ¬Ã‚ . Naudot (Carrefour, 2002) added that in order to à ¢Ã¢â€š ¬Ã…“à ¢Ã¢â€š ¬Ã‚ ¦ strengthen its sustainable development policyà ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚  that the company needed to add clarity to its strategy in the environmental area through the utilization of a framework as well as standards and an action plan representing present initiatives. Further information representing a clarification on this area found that in 2004 Carrefour had met the stringent standards established by the FTSE4Good Index (CSRwire, 2004). 4.1.2 E nvironmental Analysis The responsibility for ensuring that the highest standards of food safety are maintained within the European Union is a critical policy area for the EU Commission. Consumer and environmental concerns over the use of biodegradable as well as non-polluting products including air and water quality in conjunction with uniform food standards and the elimination of pesticides and other growth by products represent health related factors that have come to the forefront. These environmental factors represent: Cultural McCracken (1986, p. 71-84) indicates that cultural context are variables in the environmental aspect in that the manner in which individual dietary preferences have been shaped represent a link to their buying behavior as well as concerns or lack of concerns regarding organically grown foods verses foods utilizing growth hormones and other additives and pesticide controls. Increased consumer awareness in markets means that they influence supplier demands in providing the types of foods grown and processed under the public consciousness culture. The more consumers demand and seek organically grown foods the better the impact upon the environment and such buying behavior forces food suppliers to meet these demands in the marketplace. The foregoing also represents a better utilization of natural resources in keeping with the sustainability factor. The differences in food consumption patterns resulting from societies that consume more organically grown foods has a bearing upon the envi ronmental processes linked to its use, such as the reduction of pesticide components that seep into rivers and water tables as well as crop dusting, hormone additives and other chemicals that affect the ecosystem. Economic The cost of food in general also has an environmental bearing in that lower income families will tend to consume foods that are not of an organically grown nature due to the higher price. As the total consumption pattern of the lower and middle income groups constitutes a higher percentage of the market this inhibits a greater use of organically grown foods which impacts or keeps its price higher under the supply and demand theory. Thus, food processors and suppliers will need to take the first steps to make organic foods more plentiful, therefore helping to drive down costs which will have the effect of increasing consumption causing the organic foods to represent an increasing percentage of products sold, and having a more positive environmental impact. Since the lower and middle income segment of the market consumes more food, a factor of higher demographic numbers, and the preceding means that a shift in food retailer emphasis will help to drive the aforementioned. Organic food s are defined as à ¢Ã¢â€š ¬Ã…“à ¢Ã¢â€š ¬Ã‚ ¦ the product of a farming system which avoids the use of man-made fertilizers, pesticides, growth regulators and livestock feed additives.à ¢Ã¢â€š ¬Ã‚  (Boyle et al, 1991). Boyle et al (1991) continues that à ¢Ã¢â€š ¬Ã…“Instead, the system replies on crop rotation, animal and plant manures, some hand weeding and biological pest controlà ¢Ã¢â€š ¬Ã‚ . Sullivan and Frost (Ministry for the Environment, 2004) Report Number 3365 on à ¢Ã¢â€š ¬Ã…“The European Market for Organic Vegetablesà ¢Ã¢â€š ¬Ã‚  estimated that the organic food market in Europe would grow from $200 million in 1996 to $510 million in 2003. Interest by consumers in organic foods among the moderate and upper level middle income brackets is on the increase with Germany leading the European Union in consumption as represented by the fact that 18% of the overall volume in the vegetable and fruit segment of the market is organic (Wright, 2003). Denmarkà ¢Ã¢â€š ¬Ã ¢â€ž ¢s market for organic vegetables and fruits stands at 16%, followed by the United Kingdom at 14% (Wright, 2003). The UK represents one of Europeà ¢Ã¢â€š ¬Ã¢â€ž ¢s fastest growing markets with projected consumption estimated to increase to 15.1%, and Franceà ¢Ã¢â€š ¬Ã¢â€ž ¢s projections indicate an increase to 15.9% (Wright, 2003). Growth in the United Kingdom has been a result of the high degree of consumer interest and demand which supermarket chain Safeway reported that organic food represented 2% of the fruit and vegetable purchases in their outlets, however they represented 80% of the calls they received thus prompting them to increase their offerings in response to market demand (Wright, 2003). UK market demand has seen Tesco reduce the prices on its organic fruit and vegetable products so that they match the prices of conventional fruits and vegetables and the marketing move was evidenced by a 500% increase in organic sales. Table 5 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Organic Agricul tural Land and Farms in the E.U. 2004 (Organic-Europe, 2005) Country Organic Hectares % organic area Organic Farms % organic farms Austria 344916.00 13.53% 19826 11.30% Belgium 23728.00 1.70% 693 1.26% Cyprus 1017.96 0.71% 225 . Czech Rep. 263299.00 6.16% 836 2.20% Denmark 154921.00 5.76% 3166 5.50% Estonia 46016.00 5.17% 810 2.00% Finland 162024.00 7.31% 4887 6.00% France 534037.00 1.80% 11059 1.71% Germany 767891.00 4.52% 16603 4.10% Greece 249488.00 2.72% 8427 0.71% Hungary 128690.02 2.19% 1583 4.10% Ireland 30670.00 0.70% 897 0.60% Italy 954361.00 6.22% 36639 1.70% Latvia 43901.99 1.77% 1043 . Lithuania 42000.00 1.21% 1811 2.70% Luxemburg 3158.03 2.49% 66 2.24% Malta 13.00 0.13% 1 . Netherlands 48152.00 2.49% 1469 1.40% Poland 82730.00 0.49% 3760 0.20% Portugal 169892.00 4.46% 1302 0.30% Slovak Republic 53901.00 2.41% 117 1.56% Slovenia 23032.00 4.55% 1590 2.04% Spain 733182.37 2.87% 16013 1.40% Sweden 222044.00 7.31% 3138 3.90% UK 690270.00 4.39% 4010 1.70% Totals 5773335.37 3.37% 139971 1.54% Table 6 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Year Organic Land Conversion in the European Union 1985 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 1990 (UK Statistics, 2001) Year end 85 86 87 88 89 90 European Union Austria 5880 7000 8400 12320 16674 21546 Belgium 500 700 972 1000 1200 1300 Denmark 4500 4800 5035 5881 9553 11581 Finland 1000 1200 1400 1500 2300 6726 France 45000 50000 55000 60000 65000 72000 Germany-cert 24940 27160 33047 42393 54295 90021 Germany-other 0 0 0 0 0 15000 Greece 0 0 0 50 100 150 Ireland 1000 1100 1300 1500 3700 3800 Italy 5000 5500 6000 9000 11000 13218 Luxembourg 350 400 412 450 550 600 Netherlands 2450 2724 3384 5000 6544 7469 Portugal 50 200 320 420 550 1000 Spain 2140 2500 2714 3000 3300 3650 Sweden-cert 1500 2500 4870 8598 23600 28500 Sweden-other 0 0 0 0 5092 4890 U. Kingdom 6000 7000 8500 11000 18500 31000 EU 15 100310 112784 131354 162112 221958 312451 EU 15 % change 12% 16% 23% 37% 41% Table 6 à ¢Ã¢â€š ¬Ã¢â‚¬Å" Year Organic Land Conversion in the European Union 1991 à ¢Ã¢â€š ¬Ã¢â‚¬Å" 1996 (UK Statistics, 2001) Year end 91 92 93 94 95 96 European Union Austria 27580 84000 135982 192337 335865 309089 Belgium 1400 1700 2179 2683 3385 4261 Denmark 17963 18653 20090 21145 40884 46171 Finland 13281 15859 20340 25822 44695 84556 France 81225 85000 87829 94806 118393 137084 Germany-cert 158477 202379 246458 272139 309487 354171 Germany-other 30000 96742 126385 173128 152062 121575 Greece 200 250 591 1188 2401 5269 Ireland 3823 5101 5460 5390 12634 20496