A Proposal of Establishing a New Branch of Carrefour in Ras Al Khaimah
Introduction
This study seeks to analyze the demand for Carrefour in the surrounding villages of Ras Al Khaimah. This will help decide on where to establish another Carrefour branch. Al Manar Mall has been the only shopping mall with a Carrefour, leading to congestion of customers as they travel long distances to the shop. The high-demand for Carrefour creates a potential business opportunity for any investor in Ras Al Khaimah (Oxford Business Group, 2011). The study will examine the demand for Carrefour in the villages around Ras Al Khaimah, and the effectiveness of introducing another branch that provides services to them. It will establish whether there is a ready market or whether a market can be created in the location. The study will measure the level of competition that can build between the existing Carrefour and the new entrance. It will determine whether Carrefour has a competitive advantage over any existing similar product provider. This will help determine the potential of the new entrance survive and dominate the market. This research is necessary to help the investors make decisions about the location of the branch from opinions of the potential consumers on the satisfaction of the investment. This is because it is demand that drives the market. Getting information on the living standards of the Ras Al Khaimah will help in determining whether the products offered by Carrefour match their needs. This will also help in establishing a strategy in which their needs can be met and exceeded to gain a competitive advantage over competitors. The research will also focus on the investors’ ability to maximize profits, increase sales, increase competition, and improve satisfaction of customers (Atsmon, Kertesz & Vittal, 2011).
Objectives
The study will establish whether Ras Alkhaimah residents are interested in the products offered in Carrefour. It will find out the lifestyles that Ras Al Khaimah residents lead to link it with the products offered in Carrefour. It will also establish whether these products will still be in demand in the long term so as to gauge the future of the Carrefour branch if established. The popularity of Carrefour among the residents will also be established. This will aim at establishing if the residents are familiar with the products offered and their experience in purchasing and consuming them.
The study will also find out the existing competition by establishing the alternative places of shopping that the residents frequent. The preference of these products to those offered in Carrefour will be determined so as to establish competition that the new branch is likely to experience.
The population distribution of the Ras Al Khaimah area will be established in the study, as well. This will determine the demand that is available for the variety of products offered in Carrefour. This will be compared with the products offered so as to match the needs of the population with the products available. Population growth will be established to measure the expected level of demand in the future if the new branch is introduced.
The challenges experienced by customers who shop in the existing branch will be established through getting customer feedback. It will be useful in coming up with a strategy to improve on customer service and staying ahead of the existing competitors. This will be useful in finding out the attitude that customers have in regards to shopping in Carrefour. Through this feedback, the study will establish whether it is advisable to open the new branch in Ras Al Khaimah. The possible challenges that might be experienced if the branch is introducing will also be determined by the use of the feedback. This will help in predicting whether the challenges outdo the benefits of establishing the new Carrefour branch in this location.
Background
The study will cover the city of Ras Al Khaimah and the areas around the city. This will include areas, settlements, and towns, such as Masafi, Jazirat Al Hamra, Huwaylat, Diqdaqah, Khor Khuwair, Khatt, and Rams. The study will cover about 1700 square kilometers of the Ras Al Khaimah areas with more than 260000 people. The population will be reduced using random and systematic sampling techniques to 2000 respondents (Oxford Business Group, 2011). The research process will take two weeks, beginning from 24 May 2012. The wide geographical coverage increases the time per day spent in the research. We will be operating eight hours a day covering 3 towns or villages within a day. Working eight hours in the day will ensure that the different classes of people are all engaged. These include the non-working class, working class, the learners and the old retired people.
The large population under study presents potential markets for the investment. The study will reach areas in Ras Al Khaimah and cover more than a quarter of the whole population. This study will only be possible through arranging meetings with individuals in the villages and towns. Others can be reached through engaging them in discussions while they are carrying out their daily tasks; an example is the small scale business people in their areas of operation. The focus on discussions is the most effective way of gathering information because it will involve large numbers of participants, and we will have the chance of interacting with the audience. Video tapes will be recorded as the interviewees are giving their responses. Aspects like the lifestyles will be established through observing the activities of the residents. During this interaction, the research will also cover the way of life of the Ras Al khaimah locals. Through observation and interviews, it will establish their living standards to determine whether the products match their needs (Zott & Amit, 2008).
Scope
The choice of focus groups increases the efficiency of the research process and reduces costs of operation. This will involve all age groups because Carrefour offers products for every age group. The study focuses on a large sample of respondents improves the reliability, accuracy, dependability, and satisfaction of the research process. The focus groups will consider the demographic and geographic segments to create a reliable investigation. This will also help in establishing whether the market is dynamic and the variations among the Ras Al Khaimah residents (Zott & Amit, 2008).
The meetings will discuss the opinion of people in those areas on the need to open a new branch that will satisfy their needs and wants. The respondents are to address the issues that dissatisfy and satisfy them concerning shopping at the Carrefour at Al Manar Mall. The housewives and people working in the open can be met during the day. The working class and school going children can be engaged at the close of business in the afternoon. The other two hours will be for travelling (Oxford Business Group, 2011).
Theoretical Framework
Michael Porters five forces theory guides the study to understand the nature of the market. This framework is the best for developing the business strategy given the competitive intensity of Al Manar Mall and the market attractiveness. The attractiveness refers to the high-demand for Carrefour in the market. The study of these forces helps business serve customers while making high profits. According to Atsmon, Kertesz and Vittal (2011), company can apply business models, competences, or networks to maximize profits studying the existing market can also help in establishing the value chain that a new entrant can apply to provide the products and services better than the competitors. The new entrants decrease profits, sales, and market share of existing firms. Existence of substitute products provides consumers with alternatives to switch. Bargaining power of customers affects the prices and the market output. The bargaining power of suppliers affects the market inputs. Intensity of rivalry determines the business strategies. When the business tactics of the competitors are established the new entrant can be better than the competitors. The study can also establish Carrefour’s strengths from the response given by the participants. This will help the organization to capitalize its strengths to maintain and improve the current demand. This study will provide the new branch with a strategic position (Atsmon, Kertesz & Vittal, 2011).
The level of trust to be put when embarking on a business investment is determined by factors such as the legal frameworks and the commercial laws put in place. When rules and procedures are put down, violation is minimal the probability of deceit is at the minimal for investors (Laeequddin et al 2009). Ras Al Khaimah is governed by the sharia law, and this proves that establishment of Carrefour is safe. The probability of conflict with the government is minimal because the RAK Investment Authority accommodates business investors. The global economy requires a dynamic business practices; Ras Al Khamah is willing to achieve this by encouraging investment both domestic and foreign.
The population in Ras Al Khaimah is growing as evidenced by the rate at which commercial and residential houses are being constructed. The demand for low cost housing means that the population has grown. Demand of services like housing means that the rest of the related industries like household and homecare goods also increase. This is a favorable sign which implies that if Carrefour is established in Ras Al Khaimah, it will experience growth because there is a ready market. Demand is the determining factor on whether a business should be located at a destination; in this case, the location is a pleasurable one and attracts business growth (Oxford Business Group. (2011).
For a business to thrive in a new location, it establishes itself in terms of brand or increased product knowledge among the consumers. This is an advantage to Carrefour because this is a well known outlet among the locals. Considering that another branch is already established in Al Manar Mall, the new branch is likely to do well because Carrefour already has a market share (Golea, 2009). Customers who travel to shop in the other branch can now have the products brought nearer to them. The customers already know this chain though the task would only be to inform the customers about the new branch that is nearer to them. Future trends can be anticipated by studying the changing living standards over the last decades. This helps to establish whether the variety of the products offered will be in demand even in the long term (Thompson P. 2010).
Methodology
A proposal is essential to review the current knowledge and critical issues required to carry out the research successfully and to ensure that there is no omission of crucial areas of study. For the study to cover the targeted market adequately, i will involve all the age groups ranging from the school going children to the aged. Since Carrefour provides products for all age groups, the market will be adequately covered. The study will be divided into two sections; one that will target non working people mostly housewives and small scale business people to achieve wide market coverage. The second one will target working class in the evening as they return home from work. This will also involve school going children and college students who mostly return from school early in the afternoon.
The market conditions as at present will be analyzed. This will be through holding discussions with people in the target areas under study, through observation, and interviews. The conservations will address the need for a new branch in the market. It will involve probing to establish whether these residents are interested in Carrefour products. This will be done by interviewing to find out whether they have ever shopped in Carrefour and how their experience was. For those who may not have experienced, the reasons will be established. It will also establish whether they have an interest in the products offered in Carrefour through discussions that will focus on the lifestyles they lead.
The expected trends in the future will also be established by discussing on the spending habits of the population in the past. Observation will also be applied when housewives are shopping for their day to day products. This will be compared to the current needs to establish the trend. It will also help in determining the products that can be used to attract many customers in Carrefour. Demand for these goods in the future will also be established so that the profitability of the branch in the long term is anticipated.
Answers on the issues of customer service delivery will be expected. For example;
How reliability is services of Carrefour?
What can the new branch do to improve convenience of the services?
Which needs do you want the new branch to satisfy?
What are your expectations as a customer in the new branch?
What is the future outlook of the consumers?
The data in notebooks, photographs, and video will be analyzed. During this analysis, factors such as convenience and customer expectations will be considered. This will be useful in determining how a new branch will be relevant to customer needs. Coding will be applied to analyze the data using mathematical and statistical tools. The analyzed data will be presented in a report that will combine the results and conclusions of the study.
Timetable
Date
Activity
25TH May 2012
Preparation of the proposal and plan for the activity.
26th May 2012
Identification of the Ras Al kaimah area and familiarization.
27th May 2012
Preparation of the materials and other requirements for the study.
28th to May to 31st May 2012
Carry out the study through interviews and discussions and observation.
1st of June 2012
Analyze the data collected
2nd June 2012
Prepare and present the report of the findings obtained.
Budget
A budget will be important to ensure that the study is carried successfully without any financial issues arising. The expected costs will be kept at the minimal so that the least amount of money possible is spent.
Description
Estimated Cost
Fuel and transport cost
$100
Stationaries, cost of printing and photocopy
$20
Leasing of video recorders and cameras
$50
Telephone costs
$30
Meals
$35
Miscellaneous
$35
Additional Money for incentives, presents and the like.
$20
Overhead costs estimated at 10%
$29
Total
$319
NB: Currencies are in us Dollars
Limitations and Delimitations
The research process had many challenges that limited capabilities of the team. Finances and time were the principal limitations of study leading to following of strict budgets and schedules that had to complete the project. Finances limited the research from increasing the size of the geographical coverage and sample population. Moreover, uncooperative respondents prevented collection of some of the essential information and slowed down the research process (Atsmon, Kertesz & Vittal, 2011).
Carrefour is a well known outlet and the majority of people have heard about it. This fact stimulated interest of consumers to participate in the research process. The consumers admitted that they wanted to access Carrefour better than at that moment. This proved that they knew Carrefour and the research required only building information without having to provide background information about the outlet. This interest in Carrefour provided an in-depth understanding of customer needs and wants, and what the investor should do is to satisfy those needs. The research process was flexible and efficient because of the geographical divisions. The information gathered was adequate for analysis because of the large sample of the population (Zott & Amit, 2008).
Conclusion
The idea of opening another Carrefour branch In Ras Al Khaimah is a viable one. This is because the area has a considerable potential for many businesses. This is based on the fact that there is only one shopping mall which happens to be a Carrefour, as well. This makes Carrefour popular among the residents, and this is an added advantage over the existing competitors. The existing branch has already created a clientele, so if a new branch is introduced it will serve to improve customer service and efficiency. This means that customers who have been avoiding shopping in Carrefour due to the distance involved will be relieved and shop more often than they do. Others who have experienced shopping in this shop but were not able to frequent due to inconveniences associated with the distance will as well start shopping. The population of the area is wide and matches the products offered in Carrefour; therefore, there is adequate demand for these products. It is also likely that new customers will come on board because the shop is brought right at the door step. They will shop simply because it is convenient for them. This branch will serve to maximize sales and; therefore, it is likely to experience sales growth and profitability.
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