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brazil report 2007

Supply chain management on the supply management side

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Unformatted text preview: procedures, some years ago it launched a programme to develop small and mediumsized local suppliers, making them compliant with exports through Casino, at that stage a minority shareholder of CBD. 2006/2007 FROM SÃO PAULO TO SHANGHAI – New consumer dynamics: the impact on modern retailing* Moreover, the partnership with Casino, one of the important global retailers, was also part of CBD’s strategy to enhance its investment capacity, open new markets and quickly improve global sourcing opportunities. Updated information technology systems and communication are of paramount importance to reduce costs and improve the relationship with suppliers, since traceability and agility transactions are of decisive help in this area. Also, in the vanguard of technology applied in retail industry, CBD has been investing on studies and a pilot project on RFID/EPC (Radio Frequency Identification / Electronic Product Code) technology. Developing credit and consumer purchasing power Another milestone and pioneer experience of CBD was in financial and credit activities. Traditionally, retailers in Brazil had operated credit for customers through their own developed structure, managed by in-house resources, using financial institutions as a vehicle if necessary. In 2004, CBD decided to develop a new financial-credit model which would permit focusing on its core business retail activities and at the same time would optimise and enhance the use of its customer base and flow by partnering with a tier-one financial player. Therefore, the new model was designed to enable the organisation to be able to offer other financial products traditionally unavailable at supermarket chains. Accordingly, the organisation entered into a joint venture with one of the most important financial institutions in Brazil thus connecting the expertise in the development of supermarket retail operations with the know-how of the financial market. This initiative leverages business for both CBD and the financial institution, improving the retail stores with financial services and increasing purchasing power of CBD clients. A set of corporate and tax structures was developed and eventually allowed an appropriate balance of interests setting up a joint venture between both parties. After this transaction many other deals were concluded in the Brazilian retail market, involving similar structures and various retailer players in the supermarket, department stores, furniture and home appliance sectors, among others. Key takeaways Over the years, CBD has been able to maintain its position as a winner through innovative strategic development that always remains one step ahead of the game. The secret of its success lies in its ability to respond to consumer needs through a variety of retail formats and broad geographic coverage while simultaneously pushing its own growth through external acquisitions and partnerships. 26 2006/2007 FROM SÃO PAULO TO SHANGHAI – New consumer dynamics: the impact on modern retailing* Case Study II Wal-Mart in Brazil MAIN FEATURES Wal-Mart Stores, Inc., is one of the world’s largest retailers, with $312.4 billion in sales in the fiscal year ending Ja...
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