The China game between "Roman phalanx" and "Nomadic Corps" in France, Carrefour, whose profits are declining, is rising in China, while Wal-Mart, which is still the world leader in the United States, is not satisfactory in China. At first, people thought that this was the difference between European culture and American culture, such as Adidas and Nike. However, only by taking a look at the popularity of GM in China, which suffered a terrible defeat in the American market, and the humiliation of Mitsubishi in China, which performed well in the world market, can we truly realize the strangeness of the China market. China Game between "Roman Square" and "Nomadic Corps" Recently, Carrefour has been dirty. In February 2006, Du Bohua, who had just been transferred from Japan to the general manager of China in February last year, announced that he had left Carrefour's second "top spot" in China just one year after taking office. At the same time, the champion supermarket under Carrefour Group lost tens of millions of yuan last year due to poor management. In June this year, China Xiyou Group will take over the management rights of several champion supermarkets under Carrefour Group in Beijing. In 2005, due to the decline in global profits, Carrefour's former CEO Bei Heneng left school. In August of the same year, the British "Mail on Sunday" once again reported that Wal-Mart and Carrefour, the two world retail giants, were negotiating to buy again. It even said in the report that in June this year, Li Scott, CEO of Wal-Mart, visited several stores in Carrefour, and Scott also met with Luke Van der Vader, chairman of Carrefour in July. As early as March 2004, there were media reports that Wal-Mart might acquire Carrefour. At that time, Carrefour was suspected of a decline in its performance in Europe. There have been such eloquent reports twice, which makes the industry really doubt, what happened to Carrefour? Carrefour's long-term operation in China seems that all multinational giants have a process of acclimatization, but there is also a dramatic law, that is, the more powerful foreign companies encounter the greater resistance in the soft quagmire in China, while the more China-oriented enterprises live in China, the more comfortable they are. Carrefour and Wal-Mart also repeat this fate. According to the sales ranking of retail enterprises published by the Min istry of Commerce of China in the first half of 2005, see the following table: Carrefour's development in China market is far higher than its competitor Wal-Mart in terms of the total number of stores, sales volume and profitability of a single store. Carrefour ranks fifth and is the largest foreign retail enterprise in China's retail industry, while Wal-Mart ranks 19, a far cry from it. According to other data, Carrefour is the only profitable foreign retail enterprise in China. As early as 1960s, when Sam Wharton was still groping in Arkansas, Carrefour had already established the first supermarket in the world. Subsequently, Carrefour took advantage of the huge profits in the French market to establish a retail empire with more than 654.38+0 million stores in 30 countries and regions around the world. On the contrary, Wal-Mart only operates in 10 countries and regions. However, why are there rumors that Wal-Mart will acquire Carrefour? In 2005, Wal-Mart's sales amounted to nearly $286 billion, of which 89% came from the United States. It has chain operations in 44 countries around the world, with 2, 276 branches outside the United States. A recent article in Forbes magazine entitled "Wal-Mart Conquers the World" shows that in 2005, Wal-Mart's international business increased by 65,438+08.3% compared with 2004, and its profit reached nearly $3 billion. In the 2004 performance report released by Carrefour, the net profit decreased from 654.38+0.63 billion euros in 2003 to 654.38+0.39 billion euros (US$ 654.38+0.86 billion), a decrease of 654.38+05%. As for the French business, which contributed more than half of the profits, the revenue declined by 8.3% ... In the first half of 2005, it can be seen from the above table that only the Asian and Latin American markets performed well in Carrefour's four regions, and the local growth rate was only 0.6%. It can be seen that Carrefour, which is strong in China, has declined in French and other regions. Wal-Mart, besides its poor performance in China, has strong momentum in other markets. Recently, the American Retail Federation (NRF) published the latest list of the top 200 retailers in the world, among which Wal-Mart, Carrefour and Tesco ranked first, second and sixth respectively. Then, from the perspective of market value, sales ability and profitability, Wal-Mart is on the list of retail enterprises. Wal-Mart's acquisition of Carrefour with a market value of about $263 billion, with a market value of only ￡ 654.38+08 billion, should be said to have no problem at all. It seems that Wal-Mart's acquisition of Carrefour is not just groundless. In July 2005, some media reported that PepsiCo joined forces with Morgan Stanley and UBS as its acquisition consultants, and planned to acquire Danone in France with a total value of 25 to 30 billion euros. As soon as the news came out, it immediately aroused the opposition of the French government. French Labor Minister Pollu said on the radio that there are a large number of farmers and small and medium-sized enterprises in France who depend on supplying Danone with primary products. Therefore, Danone's significance to France is "more precious than jewelry". The government will do its utmost to oppose all hostile takeovers against Danone. Why is there such a big contrast between Carrefour's mixed model and Wal-Mart's single profit? Is it really the difference of localization as advertised by many media? What are the differences and opposites between localization and internationalization? In this regard, it is necessary to look for the core differences of enterprise development from the development origins of the two giants in China! The direct purpose of an enterprise is to make profits, and only by realizing the growth and accumulation of profits can the enterprise develop and expand. Different enterprises carry out all their activiti es around how to achieve profitability, and constantly improve them, thus forming different competitive advantages. We can say that the core of the differences between enterprises is the external appearance of the diffe rences in profit models. Retail enterprises generally have two sources of profit, namely traditional commodity gross profit (surplus gross profit) and backstage gross profit. Commodity gross profit is also called surplus gross profit, that is, to obtain the difference between commodity wholesale and retail; The backstage gross profit is the first of Carrefour, including commission refund at the end of the year, shelf expenses, promotion expenses and so on. It can be said that a large part of Carrefour's profit comes from the background gross profit. The backstage gross profi t, such as admission fee, is the new profit source of China supermarket created and driven by Carrefour (which has affected the profit source structure of domestic retail enter prises, and domestic retail enterprises that had no concept of charging have also learned to charge various fees), and the charging mode has been dubbed "Carrefour mode" by peers in the industry. If an enterprise wants to enter Carrefour, it generally needs to include six categories of expenses, such as special promotional activities, priority access to popular locations in the store, privilege to enter the store, priority access to a good marketing environment, holidays, and market share development. The maximum entry expenses can reach about 30-40% of the turnover realized by suppliers in Carrefour stores, and the maximum can reach more than half. Wal-Mart, on the other hand, has many rules. In Wal-Mart, purchasing and operation are completely separated, and the profits of this multinational giant basically come from the gross profit of goods (Wal-Mart also has expenses, which are only reflected in the form of goods, for example, it will not ask the manufacturer to pay cash or checks, but deduct them from the payment, that is, reduce the value of the goods of the manufacturer). In 2003, it was rated as the best supermarket chain with suppliers by the Ministry of Commerce. Not only does he not charge the entrance fee of suppliers, but he also posted warning signs in the procurement office that "it is forbidden to pay bribes to procurement personnel" and "it is forbidden for proc urement personnel to ask for bribes from suppliers". In order to maximize profits, Carrefour and Wal-Mart adopt different profit combinations: Carrefour's profit model is a combination of commodity gross profit and background gross p rofit, while Wal-Mart adopts a pure commodity gross profit approach. At the same time, as a process support to realize profits, Carrefour adopts the management mode of integrating marketing and mining, while Wal-Mart adopts the mode of separating marketing and mining. In retail enterprises, these two methods have their own advantages and disadvantages. The biggest feature of the integration of operation and mining is flexibility, which can be adjusted at any time according to regional differences. It is this that has contributed to the great success of Carrefour in China. Howev er, the disadvantage is that the internal management cost is high, and this management cost is generally not directly reflected in the direct expenses, but through the operating activities in the market. China News Service once reported that a kind of bread in Wuhan Carrefour has three layers of label s, and the shelf life of each layer is different. After the "fake Maotai" incident, consumers' doubts about Carrefour expanded to more categories, which is obviously not explained by management negligence and accidental events. At the same time, because of the excessive concentration and liberalization of rights, it will breed corruption, encourage the speculative psychology of rights holders, increase the difficulty of monitoring, and also damage the interests that originally belonged to the company. The integration of operation and mining will lead to overlapping and vague area s between organizational structure and functions, which will increase internal friction and reduce operational efficiency in practical work. Compared with the integration of operation and procurement, the complete separation of procurement and operation is obviously more in line with the principle of industrial control: they are completely insulated internally, which not only makes commercial bribery impossible, but also promotes the efficiency and specificity of various functional departments. In Wal-Mart, all merchandise displays are standardized, including placing shelves and stacking heads according to the drawings of unified procurement planning. And in response to the needs of consumers, Wal-Mart has also adopted an equal attitude-pursuing the low price of overall quality rather than the absolute low price of individual products. In or der to make its business data run faster, Wal-Mart even promoted EDI at any cost. However, the disadvantages of this standard are also obvious. First of all, Wal-Mart's business strategy is obviously more suitable for fully mature developed countries, such as the United States. Almost all industries have developed to the stage of industrialization. The highly developed supply chain and large-scale s tandardization of enterprises provide a solid foundation platform for Wal-Mart's standardization. In the face of regional differences and consumer diff erences in China, this standard will inevitably have the meaning of drawing the land as a prison. On the other hand, because the manufacturer's standards in China are not uniform, and the logistics system is also very different, it is naturally difficult to combine the standardized operation with the national conditions. At the same time, China's suppliers are mainly concentrated in the stage of individual dealers. Most of them have developed from old businessmen, and there is still a great distance between them and modern retail enterprises, especially international giants like Wal-Mart, in terms of system, business form and ideas. It is not a link or a day or two to adapt. The difference between Wal-Mart's strict standardization and the actual level of s uppliers in China at present also sets a barrier for Wal-Mart to choose local suppliers. Differences in operating processes Any organization or enterpr ise that chooses a way to realize profits will inevitably be strengthened and solidified in actual operation through processes, thus forming differences among different organizations. It's like everyone is climbing a mountain. Some people like to travel in twists and turns, while others like to climb rocks in adventure. Different ways are adopted, and the matching of natural quality and ability is obviously different. Obviously, the differences between Wal-Mart and Carrefour in their respective operations are naturally the external manifestations of their core. Carrefour's pro fit model is more flexible and less dependent on the supply chain, while Wal-Mart is the opposite. However, in order to maximize their own profits, both of them constantly strengthen their competitive position in all aspects of business activities, and realize their mutual matching with the profit model through the process design of each node. I. Location and Sales Carrefour prefers the location of new stores to commercial centers or residential centers, emphasizing its dependence on business districts. There is a mature store site evaluation system in the industry, and the investigation conclusion of business circle is even comparable to that of professional reports (government or third-party consulting agencies) . This is also one of the main factors for Carrefour's successful operation in China. However, Wal-Mart doesn't seem to think so. Generally, Wal-Mart prefers the urban-rural fringe to hypermarkets, and pays more attention to the advantages of land price and transportation there. Its awareness of cost saving and requirements for logistics are obvi ous. Carrefour advocates everyday low price, but it is actually a Hi-Low (combination of high and low) price strategy. The goods that customers often buy and compare prices are priced at low prices, while the normal prices of other goods are generally higher than those of Wal-Mart, which really adopts everyday low price. In order to emphasize consumers' feeling of superficial low price, they do everything they can at the technical level: the deep discount price offered during promotion is often significantly lower than that offered by rivals in everyday low price; Inside and outside the store, the purchase newsletter, the advertisement at the door of the store, the hanging flag in the store and the shelf label are all reminding you which goods are being promoted with eye-catching red letters; In the store, the pile head and end shelf display are vivid and attractive, and the new products, promotional goods and recommended goods are clearly marked; The checkout receipt reminds the customer how much you saved today; Before going out, the gifts that are often refurbished are redeemed and sweepstakes, which once again increases the customer's sense of gain. Through these methods, consumers have a price illusion, which attracts a large number of tourists, so as to drive the increase of turnover and ensure the comprehensive profit level. If Carrefour is attracting experiential customers, then Wal-Mart attaches importance to striving for rationality. Unlike Carrefour, the display in the store is not elaborately arranged and constantly changed, and there is less lively store promotion. Customers can easily find goods in familiar locations, and the characteristics of marketing activities are reflected in the choice of goods and the implementation of everyday low price. Wal-Mart selects th e best category combination for customers. "If you can't find her in Wal-Mart, maybe you don't need her at all", which meets the daily needs of most customers, facilitates customers' "one-stop shopping", and insists that all categories of goods are kept at a long-term and stable low price, so that customers can reduce their overall consumption expenditure without worrying about studying the price. This strategy reduces the store's manpow er demand for tally, price change and coping with demand fluctuation, which is helpful to realize high flow and stability of goods flow and economies of scale in procurement. On the other hand, from the layout of the store, Carrefour, whether it is a red light full of joy or a knot of hearts, embodies a strong sense of China, which can be said to have penetrated the consumer mentality of domestic consumers who like to join in the fun and tried their best to adapt to the dif ferent needs of different consumer groups. At present, other hypermarkets are unparalleled in the display layout and refinement of hypermarkets. On the contrary, Wal-Mart applied the American business philosophy in the China market, believing that more and more shoppers' preferences and habits are similar. It is not difficult to find that most of the goods in Wal-Mart stores are s tandardized. For Wal-Mart, in fact, its success in the world lies in its extreme application of standardization technology, and the standardization of store layout obviously has advantages over Carrefour in management cost and labor cost. Because of the lack of integration with regional culture, there is no personalized difference, but it will lose to Carrefour in terms of customer acceptance and comfort. Second, the performance of the supply chain is poor. In the United States, Wal-Mart's efficient information system and highly automated logistics system help it minimize the inventory and transit time of goods and effectively reduce operating costs. Through this network, more than 4,000 stores around the world can make an inventory of the inventory, shelves and sales volume of each commodity within 65, 438+0 hours. The close connection between internal and external information systems enables Wal-Mart to exchange daily information on commodity sales, transportation and ordering with suppliers, so as to keep the store's sales, ordering and distribution synchronized. It takes only 2 days for its distribution center to receive the order from the store to purchase and deliver t he goods to the manufacturer. During the ten years from 1989 to 1998, the sales of Wal-Mart jumped from $25.8 billion to $ 1376 billion, an increase of 433%, while the real-time inventory value in the same period only increased from $4.7 million to $ 175 million, an increase of only 272%. Carrefour, on the other hand, has played a flexible role in the integration of business and procurement. Since entering China, it has set up five procurement centers in Greater China to implement centralized procurement of goods with little regional difference. But at the same time, each store has been granted certain purchasing authority, which can be freely combined according to local cultural characteristics. Corresponding to this is the strict profit index, layer-by-layer target control and performance appraisal for each executor to restrain the illegal behavior of procurement personnel. Under this high-p ressure assessment system, anyone in the organization knows that it is necessary to ensure the overall profit in order to make himself have a stable foundation in his post, so to some extent, he hopes to limit commercial black-box operation. On the other hand, because of excessive pressure and strict assessment of profits, employees have no room and time to buffer and no sense of security for long-term development, so the speculative psychology of taking short-term profits is also prone to black-box operation. Therefore, the quality fluctuation of Carrefour is obvious, and even there are many precedents exposed in newspapers, which also shows the emptiness of its internal management. However, this is also due to the inherent defects in its organizational operation process design, which is difficult to avoid or eliminate by other means. Effective use of economies of scale is another magic weapon for Wal-Mart's cost leadership, including economies of scale in procurement and economies of scale in logistics. In the selection of goods, we can make better use of purchasing economies of scale by selecting national famous brands or international brands and implementing centralized procu rement. The scale economy of logistics is realized through centralized distribution in logistics centers. In the United States, for example, a distribution center with satellite system can support 120 stores and serve stores within a radius of 500 kilometers. Therefore, the store density within the effective service range of the distribution center is the key to reduce the cost. In the United States, Wal-Mart's dense distribution in many small towns can effectively play the economies of scale of logistics centers. The economies of scale in logistic s and the efficient system * * * together reduce the logistics cost of Wal-Mart, and its distribution cost is less than 3% of sales, while its competitors reach 4.5%-5%. Therefore, Wal-Mart can persuade suppliers to pay logistics subsidies, hand over logistics activities to its logistics system, and gain logistics profits from it. Carrefour pursues the philosophy of upstream and downstream competition, and in view of the fact that there are a large number of manufacturers in China, it adopts the negotiation method of using its powerful sales ability as a negotiation lever to make breakthroughs point by point with suppliers. This actually regards supply as a competitor. "Negotiation and bargaining are pervasive in our daily life. This is the motivation. Competition is actually b etween suppliers and retailers. You must strive to be the best retailer every day. This is life, if there is no negotiation, there is no corner. We cannot make progress. " What is created is a tense upstream and downstream relationship. However, this strategy is in one-to-one correspondence with the characteristics that the concentration of consumer goods industry in China is generally not hig h, and most manufacturers are small in scale and most brands are regional. From the above two points, we can see the influence of the profit model on the operation process. The complete separation of procurement and operation is the matching with the g ross profit of goods, which inevitably urges organizations to obtain profits from the optimization of the overall supply chain. In this way, every node in the value chain must be interdependent to complete value creation, and the reproducibility of this method and the simplicity and low cost of internal management are obvious. In fact, Wal-Mart's success is to continuously strengthen and maintain this model through various aspects such as technology and organization, and any behavior that does not match its core competence will be resolutely denied. Contrary to Wal-Mart, Carrefour chose to use its powerful throughput to enhance its bargaining power with suppliers and make up for its comprehensive gross profit level by using background gross profit. However, because the direct realization of backstage gross profit is the purchasing department, it also increases the internal management cost, and the quality change of goods and the contradiction with suppliers are inevitable. In the confrontation between Roman phalanx and nomadic cavalry, we know that the process is a necessary means for the organization to achieve its strategic goals. However, it is very important for the process to play its role efficiently and reasonably, and its mutual matching with the external environment is crucial. The ancients said that "orange is born in the south and orange is born in the north" . From the comparison between the two, it is not difficult to find that Carrefour and Wal-Mart are similar to the difference between nomadic cavalry and Roman phalanx. Carrefour is good at strategy and flexibility, while Wal-Mart's dependence on the system and strict control are brought to the extreme. Everyone has learned something about the power of the ancient Roman phalanx in the movie, and Wal-Mart's great achievements in global business are similar. Before the attack, every part of the system is required to be seamless, and no negligence can be allowed. At the same time, it is the real reason for the huge gap between them in China. Carrefour's profit mainly depends on taking advantage of the competition among suppliers to extract a lot of background gross profit, but at the same time, in order to strengthen its ability to attract suppliers and increase its bargaining leverage, Carrefour has played a sharp role in various promotional activities. Correspondingly, on the one hand, there are scattered and huge supplier groups in China; on the other hand, Carrefour relies on various strategies to mobilize consumers' impulsive desires, which also complements the huge and irrational base of consumers in China. Wal-Mart's direct profit is 100% from gross profit, which determines its strict control over the supply chain. However, in China, due to huge regional differences, immature consumers, and underdeveloped logistics and information systems in China, this advantage cannot be brought into play because of the bottleneck effect. Limited by the policy, the satellite communication system of Wal-Mart in China can't play its role, which makes Wal-Mart in China unable to effectively enjoy the global procurement system and global logistics system, and also makes all links of the back-office logistics system unable to cooperate closely as in foreign countries and unable to play its due efficiency . It is undeniable that Carrefour has gone further than Wal-Mart in localization. The former can better adapt to the China market than the latter, and can combine its own advantages with the environment. From a global perspective, Wal-Mart's competitive advantage has something that other enterprises can't copy, especially its information system and logistics distribution. However, this item is useless in the China market. China's market economy started late and the relevant supporting facilities are not perfect, which restricts Wal-Mart's display of its skills, so it can only be brewed and ready to go. Carrefour, on the other hand, has no fixed and optimized system model, and everything can be changed, so it doesn't need much running-in to a strange market. This also caused the different performances of the two in the China market. In fact, even in the United States, where the commercialization is extremely extreme, Wal-Mart's almost harsh adherence has a completely polarized evaluation: nationalists think that Wal-Mart is unpatriotic and has given countless jobs to foreign cheap workers; Suppliers complain that Wal-Mart is stingy and often haggle over the purchase price of one cent. Although Wal-Mart employees don't talk about it, they are also indignant at the exploitation of their owners. But at the same time, Wal-Mart has been sought after and embraced by a wider range of groups. According to the data, since Wal-Mart entered the American food market, the retail price of food has dropped by 65,438+00% to 65,438+05% every year. Undoubtedly, Wal-Mart's strategy is more focused on globalization, which is the main reason why Wal-Mart has been criticized repeatedly in the United States. Mitchell, vice chairman of Boston Consulting Group, commented: "Wal-Mart is a company with its own principles. Its principles are like a whip, which not only drives itself, but also drives other manufacturers to work hard and better participate in the global division of labor and competition." From an economic point of vi ew, Wal-Mart's brutal competition has maximized the economic benefits of the whole society. Wal-Mart dares to adhere to the long-term development strategy of "investment in the first ten years and income in the second twenty years", which itself shows that it is determined. In this sense, the lost opportunities of Wal-Mart are only temporary opportunities, or even illusory opportunities. When the short-term behavior encounters an avalanche, the opportunity of Wal-Mart will really come. Sooner or later, you have to pay back. From a philosophical point of view, the positive and negative sides of anything are sometimes extremely difficult to distinguish, and many times your own advantages are precisely the root of your own shortcomings and failures. The game strategy of backstage gross profit pursued b y Carrefour, though not followed by China enterprises, has its drawbacks. Because the competition between upstream and downstream may stimulate the survival motivation of both sides, but the upstream and downstream pursue the maximization of profits, which is easy to fall into the game choice of "double marginalization", which is not conducive to maximizing the total income of both sides. Ironically, it is Carrefour that brings rival enterprises together to deal with the same enemy. The incident of Carrefour Roasted Seeds Association in Shanghai ha s sounded the alarm for the disadvantages of this strategy. In South Korea, Carrefour was fined by the Korea Fair Trade Commission for three times in three years, totaling $654.38+0 million, for arbitrarily apportioning and charging fees to suppliers. Since 2003, in Beijing, Shanghai, Hangzhou and other places, the products sold in Carrefour have repeatedly appeared quality problems. Moreover, Carrefour also pursued this cunning game strategy in its contacts with the China government. At this time, Carrefour's main magic weapon to succeed in entering China is to be good at gaining profits, playing the edge ball and working with local governments to get their own income in violation of regulations. As a result, Carrefour has also been forced to rectify by the central government, and it is one of the few foreign-funded enterprises blacklisted by the China government. For Wal-Mart, this huge commercial machine is more cautious in choosing its own behavior. On the one hand, it is dogmatic to abide by China laws and regulations, step by step, cautious, and never cross the line; On the one hand, it increased its share of global procurement in China (note: in 2003, China's export volume was US$ 438.2 billion, and Wal-Mart's procurement in China reached US$ 654.38+08 billion, accounting for 4% of the total export volume), and it firmly took the first place in the list of foreign-funded enterprises with export credit in China. In the current market environment in China, the relationship between Wal-Mart and its suppliers is relatively much more decent, although many suppliers are overwhelmed by pure marketization, and even described as the engine of global manufacturing efficiency. However, Wal-Mart is still recognized by many suppliers because it is a positive negotiation and conforms to market rules. Carrefour and Wal-Mart's opening str ategies are quite different because of their international background. Due to the economic downturn in Europe, Carrefour's performance in Europe is not satisfactory, and the China market is a battleground. Carrefour does not hesitate to open a shop in violation of regulations to seek quick profits in order to win t he support of shareholders. Wal-Mart, on the other hand, has achieved good results in the North American market because of the sustained growth of the American economy, ranking first in the global top 500 for three consecutive years, so it has more time to wait for its growth in China. If we only proceed from these facts, it is not that Wal-Mart is a good student. We can only say that Wal-Mart has deeply understood the secret of the game between commercial power and pol itical power. In the United States, Wal-Mart's global strategy is not recognized by everyone, but what really worries the government is the strength of Wal-Mart. Today, the market value of Wal-Mart is enough to buy more than half of Africa. When the economic power is strong enough to compete with the political power, it is very dangerous for the country. As a lesson for Wal-Mart, it is the split of Microsoft, AT&; T's ending has been reminded by Wal-Mart, so this old empire is wary of its every move in the world.