Group 5 - Carrefour China, building a greener store

1. As Monaco, how would you size up the situation? What are the major issues for Carrefour China? What are your key concerns about the green store project?
Carrefour is the biggest foreign retailer in China and is in the middle of a rapid expansion phase and plan to open 100 new stores in 2006-2007. One of the reasons why Carrefour was successful in the earlier parts of their Chinese expansion was that they had experience from similar local culture in Taiwan, giving Carrefour the ability to transfer existing competitive capabilities from Taiwan to China in accordance to the theory of Global firms’ competitive advantages (Lasserre, 2012). Another factor that helped the entry to the Chinese market was that due to the foreign restrictions they partnered with local firms and building owners, thus avoiding these regulations. Carrefour employed local store managers to the run the stores, however the tenure of the store managers was usually between one or two years. The short tenure lead to myopia thinking regarding the stores constructions and operations. Underinvestments in areas which the store managers deemed to be of no importance but in reality were very important for a well-functioning store followed, such as under-sized air conditioning units and refrigerators. The short-term thinking was largely ignored by the senior management who focused solely on the current expansion. The major issue for Carrefour would later be to get all the store managers to shift the company towards the same direction and eliminating the short-term thinking in order to increase efficiency, minimizing operating costs and combat the newly increased competition due to the regulatory changes from the government.
The asset and construction director, an expatriate (Breslin, 2014) who had previously worked at Wal-Mart, David Monaco was