Final Report Fnac in Canada .pdf
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Foreign Languages Department
Applied Foreign Languages
Master 1 International Business Negotiation (NTCI)
PROFESSIONALISATION AND TUTORED PROJECT
“Communication Professionnelle” and “Project et Aire
Is the Canadian market a suitable choice for the French
company Fnac to expand its business into the sector of online
retail of consumer electronics?
Seminar Tutors: Mr Leishman, Mr Dodeman
Montoya, Iman Troumani, Clarisse Vivier.
Table of contents
1. Fnac: France leading retailer which keeps growing………………………………. 4
1.1 Overview of the company Fnac ……………………………...……………………………………… 4
1.2 Fnac internal analysis: strengths and weaknesses………………………………………... 5
2. Canada and consumer electronics: a developed country and a wellestablished sector……………………………………………………………………………………………… 7
2.1 Canada’s characteristics …………………………………………………………………………..…… 7
2.2 Canadian consumer electronics sector: a developed sector……………………….… 9
2.3 Canada e-commerce with a focus on the consumer electronics sector……… 10
3. Viability of the project to expand Fnac into Canada…………….............. 11
3.1 Presentation of the decision tools………………….……………………………………………. 11
3.2. Viability of the project………………………………………….…………………………….……… 12
Appendix 1: Project’s organisation chart ………………………………………………..…………. 15
Appendix 2: Tree view of the organisation of Fnac’s activities………………………..… 16
Appendix 3: Company profile: Fnac (World, 2015)…………………………………………... 17
Appendix 4: Fnac’s product diversification since its creation…………..………………… 19
Appendix 5: Fnac’s stores geographical breakdown and dates of the creation of
the websites………………………………………………………………………………………….…………….. 20
Appendix 6: Fnac worldwide……………………………………………………………………………….. 21
Appendix 7: Differences between the Multichannel, Cross-channel and Omnichannel distribution modes……………………………………………………………………………..….. 22
Appendix 8: Fnac turnover and financial results between 2013 and 2015….….… 23
Appendix 9: Country profile: Canada, 2015…………………………….……….……………….. 24
Appendix 10: Sector profile: consumer electronics (Canada, 2015)…….………….. 27
Appendix 11: Sector profile: E-commerce (Canada, 2015)……………………………….. 30
Appendix 12: Tree view of the sector of e-commerce………………..…………………….. 32
Appendix 13: Tree view of the sector of retailing………………………………………...…… 33
Appendix 14: Tree view of the sector of consumer electronics
Appendix 15: Fnac’s competitive position in Canada on the market of online
retailing of consumer electronics…………………..……………………………………………………. 35
Appendix 16: SWOT analysis…………………………………..………………………………………….. 36
Appendix 17: Weighted decision matrices………………………………..……………………….. 37
Appendix 17: McKinsey Matrix………………………………..……………………………………..….. 40
In 2015, the global sales of consumer electronics represented 1.771 million dollars
and online retailers such as Amazon, eBay and Walmart were the biggest actors1.
The development of this sector is directly linked to technological progress,
innovation and mass media. Therefore, it is a sector that changes rapidly and in
which consumers are easily influenced. That is why it is vital for a company that
would aim to enter such a competitive market to study deeply its potential.
This report concerns our group project research in which we decided to compare
two potential countries which would enable the French company Fnac to enter the
North American market of online retailing of consumer electronics. The two
countries we chose are Mexico and Canada and this report focuses on the Canadian
market research. Consequently, we chose to analyse if the Canadian market is a
suitable choice for the French company Fnac to expand its business into the sector
of online retail of consumer electronics.
Our group is composed of five people, Florent is the team leader, Clarisse and
Charline are both responsible of the general aspects of each country and Iman
and Océane are in charge of the consumer electronics market of these countries2.
As previously said, we decided to choose the company Fnac which is the Europe’s
leading company in the market of entertainment and electronic goods. The
company was founded in 1954 by André Essel and Max Théret who wanted to
facilitate the access of cultural goods to a large range of people.
We chose this company because its strategic objectives in 2015 were to reinforce
its position as one of the leader of the cultural and electronics sector and expand
its business in the world and throughout the internet. We also chose to only focus
our analysis onto the consumer electronics sector because it represents the largest
part of Fnac’s turnover3.
To begin with we will present Fnac: The European leader of consumer electronics.
Secondly, we will analyse the global aspects of Canada and its sector of online
consumer electronics which is already a well-established and developed sector.
Appendix 10: Sector profile: Consumer electronics (Canada, 2015)
Appendix 1: Project’s organisation chart
Appendix 3: Company profile Fnac, (World, 2015)
Thirdly, we will gather the information into a SWOT analysis that will enable us to
study the viability of our project.
1. Fnac: France leading retailer which keeps growing
1.1. Overview of the company Fnac
Fnac is a French company created in 1954 which head office is established in Ivrysur-Seine near Paris in France. The company Fnac was created by two former
leftists, Max Théret and André Essel, and its full name “Fédération Nationale
d'Achat des Cadres”. Fnac is a Public Limited Company that is quoted on the Paris
Euronext stock exchange since 2013. Before taking its autonomy in 2013, it was
listed on a stock exchange within the Kering group (Puma, Gucci,) who separated
from Fnac to concentrate its activities in fashion and luxury.
Fnac is the French leader in the distribution sector of cultural products. In other
words, Fnac is the leader of the retail of books and tickets for events. Fnac is also
dedicated to the distribution of technological products such as televisions, video
games and computers. In 1954, the company sold cinematographic products but
soon began to diversify its range of items to propose various types of cultural and
technological products, from toys for kids to trips and from CDs to mobiles4. More
than 60 years after its creation, Fnac’s product categories are as many as over 20
categories, within which you can find thousands of different articles5.
Thanks to this constantly developing catalogue, Fnac keeps on expanding in
France. Its first store opened in Paris in 1957 and was the first step towards the
120 other stores in large French cities like Nice, Lyon or Strasbourg6. Very often,
Fnac stores are located in city centres or shopping centres where thousands of
people pass each day. However, the company has diversified its stores by offering
smaller stores in medium-sized cities and proximity stores in airports and train
Fnac has developed its business in France and other countries as well. The first
was Spain in 1993 followed by Portugal in 1998. A year later, the French company
crossed the Atlantic in order to open its first store in Brazil. Fnac has also opened
Appendix 4: Fnac product diversification since its creation
Appendix 2: Tree view of the organisation of Fnac activities
Appendix 5: Fnac’s stores geographical breakdown and dates of creation of the websites
stores in Belgium, Switzerland and Andorra. In recent years, Fnac has had the
opportunity to open franchises in Morocco, Qatar and Ivory Coast, which now
enables it to own more than 200 stores in 10 countries7.
In its stores, Fnac offers a unique experience, the light, the colours and the
materials used inside the stores create a unique environment that allows Fnac to
differentiate itself from its competitors. On the other hand, the customer service
is a crucial point, consequently all Fnac salespersons are specialized in one type
of product to advise customers in the best way possible.
In addition, Fnac has a website in each country where it is established and these
websites are translated into the most spoken languages of those countries6. In its
online store the entire company’s catalogue can be found. In addition to all those
items, the products of third parties are added thanks to the platform called Market
Place. To satisfy smartphones and tablets users, Fnac has created a mobile
application available on Apple, Android and Windows Phone devices. The
application offers not only the same functions as the website’s but functions
dedicated to mobile devices as well, such as the possibility of scanning products
in the aisles of stores to obtain more information and read reviews.
1.2. Fnac internal analysis: strengths and weaknesses
One of Fnac’s strengths is the products that the company sells. Its wide range of
electronic products is divided into several categories that keep evolving thanks to
the possibility of Fnac to diversify its catalogue to propose other types of products
such as appliances or drones. However, at the same time, this range of products
can be seen as a problem since Fnac is not specialized in a defined type of item.
Therefore, the company cannot realize important economies of scale. Moreover,
because the company offers largely diversified products, Fnac could divert from
its main activity and weaken its image. It should also be mentioned that Fnac is
in direct contact and in cooperation with big and famous brands in the consumer
electronics sector (Apple, Sony, Microsoft, LG, etc.), allowing it to sell the most
innovative products and convey a good brand image. The negative point about
this association is that these powerful brands can impose their prices and thus
Appendix 6: Fnac worldwide
have a greater bargaining power than Fnac, which reduces the profit margins of
the company in the final retail prices.
As for prices, Fnac applies an aggressive pricing policy, with small profit margins
on key products such as screens, computers or video game consoles. To
compensate, Fnac applies higher margins on accessories, which obviously raises
the retail price. This price strategy allows Fnac to sell its products to a more
diversified public and to be more competitive against competition regarding
central products, but this results in a lack of competitiveness for accessories8.
The Fnac experience is one of the most important strengths of the company.
Thanks to its different types of shops where advisers work in a unique
environment, Fnac knows how to adapt its activity to new markets. However, Fnac
stores are located in key locations in cities where rental prices are quite high, and
these fixed costs will be reflected in the profitability of the company. Regarding its
penetration in e-commerce, although its mobile application is very well done,
Fnac’s website is not easy to use since there are a lot of elements that appear on
the screen. In addition, the search system is quite imprecise. On the other hand,
the website does not offer any unique experience because it looks like numerous
other e-commerce sites.
Thanks to various means of distribution (physical, e-commerce and m-commerce),
Fnac can offer an all-round experience to its customers. The omni-channel9
distribution mode allows customers to receive the same quality of service either
in-store or online. Also, the omni-channel experience assumes that the different
channels complement each other, for example, one can use its mobile phone to
scan a product in store, add it to the online cart and receive it at home (Click and
Delivery). Another example is that one can find a product in store, buy it at home
on a computer and pick it up at its preferred store (Click and Collect). In addition,
Fnac offers a "2-hour delivery" service available in large cities10.
Regarding payments, which is a vital point when it comes to online sales, Fnac
accepts different secured payment methods such as credit card and PayPal in all
Source: William and Thomas, salesmen for Fnac in Grenoble
Appendix 7: Differences between the multichannel, cross-channel and omni-channel distribution modes
of the countries where the business is established. However, the company has
adapted to each country and proposes for example the payment by telephone in
Spain or with a bank bill in Brazil11. Despite a low-quality outsourced after-sales
service, the high prices and a good quality customer service create a Premium
image of Fnac. Finally, in recent years, Fnac’s turnover has decreased by a few
million euros. However, the company has been able to reduce its costs and
spending’s even quicker thanks to changes in its management. That has resulted
in an increase not only in the company's results as of 2013, but also in the
company's treasury. In other words, despite a decline in sales, Fnac's activity is
increasingly profitable12. This profitability can be confirmed by the increase in the
value of the company in the stock market, which reached 70€ in 2015, in other
words it tripled the 2013 value when it was quoted for the first time13.
2. Canada and consumer electronics: a developed country and a wellestablished sector
2.1. Canada’s characteristics
Canada, which capital is Ottawa, is the second largest country in the world in term
of territory and is located in North America. It has a very low amount of population
with 35.8 million inhabitants, women representing 50.4% and men representing
49.5% of the population. Canada has two official languages: English and French.
For the company Fnac, the few amount of population means that there are fewer
potential consumers. The presence of the French language is an advantage,
however the majority of the population speaks English while Fnac does not have
an English offer yet. Canada’s national currency is the Canadian Dollar (CAD).
Canada has very modern and developed means of transport even though it is still
complicated to access to the whole territory in order to commercialise a product
Regarding politics, Canada is a federation divided in ten provinces and three
territories. In 2015, the liberal government was run by the Prime Minister Justin
Trudeau and the governor general David Johnston. Canada is a member of the
World Trade Organisation (WTO) and has signed several agreements and
https://ayuda.fnac.es/pregunta-frecuente/medios-de-pago/ and https://fnac.zendesk.com/hc/ptbr/articles/224215308-Formas-de-pagamento
Appendix 8: Fnac turnover and financial results between 2013 and 2015
partnerships with France concerning tariffs and trade, investment, information,
intellectual property rights, and trade services. Canada is also part of the OECD
(the Organisation for Economic Co-operation and Development). Also, Canada has
signed many economic conventions, agreements and partnerships in order to
facilitate trade and investments. In term of duty and taxation Canada has low
taxes which is very interesting and attractive for foreign businesses. In Canada,
duty rates vary from 0% to 35% with an average duty range of 8.5%, and the
national taxation varies from 25% to 31% because it depends of the federal tax
(15%) and the province tax (from 10% to 16%). There is a very welcoming climate
business, norms and corporate administration also have been facilitated by the
government in order to make foreign business settlement and investments faster
and simpler in order to attract them. Politics corruption is very low so the country
is very trustworthy14.
In terms of economics, Canada is the 10th world economic power in term of Gross
Domestic Product (GDP) and the 3rd economic power in term of GDP in the regional
ranking for America. Its GDP is US$1.572,78 billion, which increased by 1.1% in
2015. Canada external trade represents 64.5% of its GDP, it increased by 1.7%
in 2015, however its trade balance has been in deficit for years, as well as its
entering flux and stock of IDE decreased in 2015. Canada has major trade
partners, its main clients are the United States, China, United Kingdom, Japan,
and Mexico, while its main suppliers are the United States, China, Mexico,
Germany, Japan. Canada mainly imports vehicles and vehicles accessory, while it
mainly exports raw materials (oil, minerals, precious stones). The Canadian public
debt was about CA$1.816,205 billion, which represents 91.5% of the GDP, and an
increase of 6.8% in 2015. The Canadian competition on the consumer electronics
sector would be tough with some Canadian competitors but also American
competitors which are already set up in Canada15.
Concerning the social environment, social inequalities in Canada are similar to the
situation in France. There is a low GINI index, 33.7 in 2010 (the closer to zero the
better), there is only 13% of poverty, and the unemployment rate is also quite
low with 6.8%. In Canada the minimum wage varies between provinces, from
10.5/h to 13.0/h, and the monthly average wage is CA$4.142 for men and
Appendix 9: Country Profile: Canada, 2015
Appendix 9: Country profile: Canada, 2015
CA$3.131 for women. The national average working time is 8 hours per day, and
40 hours per week, toping at 48 hours per week. The Canadian purchasing power
is high, while inflation rate stays low with 1.1% in 201515.
2.2. Canadian consumer electronics sector: a developed sector
Finding and gathering information for this part of our research have been
complicated. We had to pay in order to access to a lot of useful data and if not the
access was restricted to a certain number of visits per page for example.
Therefore, the following information are the most reliable we could find. In 2015,
the sales of consumer electronics in Canada were about CA$12 billion (US$9
billion) with 8.3 million consumers and a penetration rate of 27.9%16. This is one
of the main sector in the country with high potential of growth. Canada is a
developed country and the population is used to new technology, 95% of Canadian
households own a television and ¾ have a mobile phone17. Canadians are paying
attention to trends concerning consumer electronics and are willing to pay more
but they buy less regularly. They are also paying a lot of attention to companies’
ethics as well as the environment and national economic health. Canadians
consumers also tend to make research on the internet before buying a product.
In term of competition, the main sellers in this sector are Best Buy with 40.2% of
the market share in 2011, followed by Apple with 4% and BCE (Bell Canada
Enterprise) 3.7%17. Best Buy is a US-based retail chain of consumer electronics
which is present in the three North American countries with over 1,000 stores and
125,000 employees. The American giant is one of the main actor in this sector and
has been focused on developing its digital offer over the past few years. Today
Best Buy online revenue is around US$4 billion with 7% of the US market share18.
The growth of consumer electronics sales and online shopping are linked to the
potential of consumer electronics market which is driven by a young social digital
lifestyle. The millennial generation is changing the way of consumption and buying
which have direct consequences on sales and marketing for companies. The
Canadian government has taken this opportunity to develop the access to the
Appendix 10: Sector profile: consumer electronics (Canada, 2015)
Appendix 14: Tree view of the sector of consumer electronics retailing
https://www.statista.com/download/outlook/whiterpaper/eCommerce_Electronics_Media_Outlook_0916.pdf, page 10
internet. The Digital Canada 150 initiative launched by the Canadian Government
aims at investing in cyber security, securing funds for ICT innovations, and
ensuring that 98% of Canadian households can access to a ≥5Mbps internet
connexion in 2017. Moreover, telecom operators are investing in fibre-optics and
full 4G infrastructures to improve the internet in remote rural areas19.
2.3. Canada e-commerce with a focus on the consumer electronics
The online retail sector is growing every year, a progression that is not done at
the expense of traditional sales. In the majority of cases, there is a link and a
correlation between online and in-store sales. Therefore, companies are aware of
the opportunity given by this new way of shopping and they develop their websites
to mobile phones and tablets. In 2015, global online trade was about US$1.771
billion among which the e-commerce in Canada represented US$16.92 billion an
increase of 22%20. The forecast for 2018 is around US$40 billion which shows the
growing potential of the sector.
There were 18 million online buyers in 2015 and 76% of Canadians shopped online
in 2014. Concerning mobile commerce, in other words the online sales made on
mobile devices, 66% of the population was equipped with a smartphone and
15.5% of the Canadians bought via their mobiles in 2015. As a developed country
88% of Canadians have access to the internet. Canada is a large territory with a
great geographical disparity of population which make the development of
telecommunication structure complicated and expensive, as well as more
complicated when it comes to be able to deliver a product that has been ordered
online. Despite the potential of the Canadian online retail sector, consumers tend
to buy more and more local for economic and environmental reasons.
Furthermore, this sector is dominated by American companies like Amazon, eBay,
Etsy and Best Buy, which are the most popular brands among Canadian
In term of shopping habits 95% of Canadian consumers like to shop on their
computer while 60% prefer to use their tablet or smartphone. For Canadians
http://www.business-sweden.se/contentassets/ca7ee804867f49299c824f394eeb26c3/fact-pack--retail-incanada.pdf, page 14
Appendix 11: Sector profile: e-commerce (Canada, 2015)
online shopping is a way to save time especially during busy periods and they like
to buy clothes and trips. Canadians consumers have more confidence in buying on
websites which own a physical store. It is also crucial to have a secured and a
quick internet connexion. Nevertheless, they do not spend a lot of money when
shopping online but they buy on regular basis. Online shopping is a way to make
good deals and product reviews are a decisive factor for Canadians consumers, as
well as the security of the means of payment. In Canada 80% of online purchases
are made by credit card. A positive point for Fnac is that 67% of online purchases
are made on foreign websites21.
Regarding online sales of consumer electronics in Canada it represents US$15
billion of total sales in 2015. The most popular consumer electronics bought online
are smartphones with 24%22. In Canada, there are only few websites which are
specialised in the segment of online retail of consumer electronics, this could be a
comparative advantage for Fnac which would be able to have a specific marketing
3. Viability of the project to expand Fnac into Canada
3.1. Presentation of the decision tools
Thanks to all the information gathered in the Fnac internal analysis and in the
external analysis about the Canada and the consumer electronics sector, we are
able to create a SWOT analysis23. The SWOT analysis is a tool which enables to
summarise within a table the main Strengths, Weaknesses, Opportunities and
Threats for the company. The Strengths and Weaknesses criteria are applied to
the internal level of Fnac, whereas the Opportunities and Threats ones are linked
to the external level which are the target country and the specific sector. The
results of this analysis give a general idea of the viability of the project to expand
Fnac into the Canadian market of online retailing of consumer electronics.
To complete the SWOT analysis, we used other marketing tools known as the
weighted decision matrix and the McKinsey matrix to compare the sector of online
retailing of consumer electronics in Mexico and Canada24. The results of these
Appendix 11: Sector profile: e-commerce (Canada, 2015)
Appendix 12: Tree view of the sector of e-commerce
Appendix 16: SWOT analysis
Appendix 17: Weighted decision matrices
matrices highlight that the general socio economic aspects as well as the security
in Canada make it more interesting for Fnac to expand its business. But, on the
contrary, when focusing on the online retail and consumer electronics markets, it
is clear that Mexico takes the advantage.
3.2. Viability of the project
The SWOT analysis highlights the good health of the Canadian economy as well
as the general good situation of the country. At the same time, we can see that
the online retailing sector has been growing over the past years, as does the
consumer electronics sector even though it has been growing at a slower rate.
Regarding consumer trends, Canadian consumers buy online only when the prices
are better than in store, which is not what Fnac has been used to doing. In other
words, Canadian keep going to stores to buy their goods. This could be an
opportunity for Fnac to develop its omni-channel distribution model as it is one of
the main strengths of the retailer. By combining a unique in-store experience with
an omni-channel consumer experience, Fnac could differentiate itself from its
competitors25 such as Amazon, eBay or Best Buy which are very well established
in Canada because they arrived before on the market. Because the Canadian
population tends to be stagnant and is already equipped in consumer electronics,
there is no need for another consumer electronics retailer in the country. Fnac’s
main competitors have such market shares and because they are already trusted
by the consumers, it would be impossible for Fnac to beat them in Canada.
The last point is the size of the country that makes very difficult the fast deliveries
Fnac has been used to proposing in other countries. Fnac could implement its
effective “2-hours delivery” in large cities where the business would open a store,
but to deliver on the other side of the country in a short time, it would need a
massive investment. This investment has already been done by Fnac’s competitors
such as Amazon and Best Buy, and it would be impossible for Fnac to implement
a better and faster logistics and delivery service in Canada.
Appendix 15: Fnac competitive position in Canada on the market of online retailing of consumer electronics
According to the McKinsey matrix26, Canada could be interesting because of the
high revenues and the increasing online retail sector. But Fnac does not master
the Key Success Factors in the country such as logistics or having the website
translated in English and proposing better prices online than in store. Mastering
these factors is a vital element for any company wishing to expand into Canada,
and Fnac cannot make it at the moment. Finally, all those costs — translation into
English, store openings, logistics, workers — would add many charges to the
already decreasing turnover of the company and it would not make the Canadian
attempt profitable in a long time.
As a final decision, it would be smarter for Fnac to choose Mexico to expand its
business into North America. The Canadian market is already saturated and people
are already well equipped in consumer electronics goods. On the contrary, in
Mexico there is a possibility for Fnac to succeed as the population is growing and
a large part of the population is not fully equipped with consumer electronics.
Going to Canada would be a loss of time and money for Fnac as the business will
probably fail to be competitive enough in the consumer electronics sector and will
never be profitable.
As a conclusion we can say that our research enables us to affirm that Canada
would offer some opportunities to the French company Fnac. Salaries are high,
the purchasing power is increasing, most of the population can afford to buy high
quality products such as Fnac’s and the Canadian market of online consumer
electronics retail is well-developed and healthy.
Nevertheless, Canadians’ way of consumption tends to differ quite a lot from what
Fnac is used to. For example, consumers prefer to buy online only if prices are
lower than in stores, however Fnac does not necessarily offer distinctive discounts
online. Furthermore, most of the potential consumers keep going in stores rather
than buying online which can actually be something that Fnac could turn into an
opportunity because it already uses a omni-channel distribution model and could
strengthen this advantage.
Appendix 18: McKinsey matrix
Competition in Canada makes the online consumer electronics sector a very
difficult market to enter. As said previously, in Canada the competition is severe
and American companies such as Amazon, eBay or Best Buy are very wellestablished, powerful, and have already gain loyalty from consumers. It would
therefore be practically impossible for a new company to enter this market and
compete with them. Furthermore, another key difficulty in Canada would be
managing the logistics behind deliveries. As Canada is a very big country with a
few densely-populated regions but also with vast areas with few population,
delivering would remain an important difficulty that Fnac would have to face and
that would increase the company’s expenses. Moreover, other difficulties and
threats such as the cost of a potential website translation, the image of French
companies in Canada, and the fact that Fnac does not promote any ethical
corporate culture are among the barriers that would be very difficult to overcome
for the company.
To sum up, the company Fnac does not master enough Key Success Factors
regarding the Canadian market and according to our McKinsey matrix it would
rather seem more profitable for the company to enter the Mexican market which
is still growing and in which competition is not as tough as in Canada.
In charge of the
general aspects of
In charge of the
general aspects of
In charge of the
sector in Mexico
Project’s organisation chart
In charge of the
sector in Canada
Tree view of the organisation of Fnac’s activities
Home and Design
TV, Video, Home
Cameras, Photo printing
Toys for kids
Movies, DVD, Bluray
Company profile: Fnac (World, 2015)
• Corporate name: Fnac
• Date of establishment: 1954
• Legal status: Public Limited Company (PLC)
• Share capital: 324 952 656 €
• Affiliation: Fnac-Darty
• Registered office and name of the CEO: 9 rue des Bateaux-Lavoirs – ZAC Port d’Ivry
94200 Ivry-sur-Seine, France. CEO : Alexandre Bompart (since January 2011)
• Country of location: France, Spain, Portugal, Brazil, Belgium, Qatar, Switzerland,
Ivory Coast, Morocco, Andorra.
2. Business line (global sector)
• Sector: Retail
• Segment: Cultural and technological products in store and online (www.fnac.com)
3. Activities, services and products (in order of importance)
• Sale of electronic products (mobiles, picture and sound, connected objects)
• Sale of cultural products (DVD, Blu-ray, CD, video games, books, toys)
• Ticket sales and smartbox (concerts, shows, trips, discoveries)
• Organization of events (concerts, shows, contests, awards)
• Service delivery: Fnac Express + (express delivery at home)
• Service delivery: Fnac play and Fnac Jukebox (viewing online movies and accessing
music titles via a subscription)
4. Partners (in order of importance)
• Suppliers: Technology and high-tech companies, publishers, event agencies, video
and music distribution companies, carriers.
• Customers: Low value to high value. Target customer: mid-range
• Others: Independent artists
5. Some key figures (year references / previous year)
• Revenues: 2015 = 3,876,000,000€ (World -0.5%)- 2,784,000,000 € (France +
0.4%) / 2014 =3,895,000,000€ (World), 2.777 million€ (France)
• Net income: 2015 = 48.000.000€ (World + 16.7%) / 2014 = 41.000.000€
6. Strategies, Past, Present and Future Policies
• 1957 - 1980: Corporate strategy: product diversification (music, bookshop, ticket
office). Business Strategy: differentiation service (store = cultural exchange space,
expert sellers). Marketing strategy: competitive prices, wide range of products, all
combined under one roof, presence at events.
• 1980 - today: Corporate strategy: geographic diversification (Europe, Brazil,
Africa), product diversification (high-tech, video games, stationery). Business
strategy: differentiation service (Fnac Express +, member card), technological
differentiation (e-commerce website, mobile application, click-and-collect).
Marketing strategy: competitive prices, quality of the range, different store
formats, brand image and presence at events.
• Future: Corporate strategy: geographic diversification. Business Strategy:
diversification service and technology.
Turnover and result
• Turnover per area
• Comparison with the
• Lack of the result per area
• Future strategy
• International strategy
• Various information
• Company’s activities
• Stores locations
http://www.fnac.com/e • Capital
ntreprise/mentions_leg • Headquarter’s location
• Precise data
Fnac’s product diversification since its creation
• Creation of the Fédération Nationale d'Achat des Cadres (FNAC)
1954 • Trading photo and cinema equipments
• Trading audio discs
• Creation of a laboratory to test the products
• Trading book
1974 • Creation of a forum to talk about culture
• Trading autoradios y audiovisual systems (TVs, lectors)
• Creation of Fnac Trips
• Trading informatics
• Trading phones
• Creation of France Tickets (in partnership with Carrefour)
• Creation of the website: Fnac.com
• Trading toys for kids
• Creation of the MarketPlace on Fnac.com
• Creation of the Fnac Kids department (books and toys for kids)
2012 • Creation of the Home and Design department
Source: Appendix 3: Company profile: Fnac (World, 2015)
Fnac’s stores geographical breakdown and dates of creation of the websites
Source: Appendix 3: Company profile: Fnac (World, 2015)
Source: Appendix 3: Company profile: Fnac (World, 2015)
Differences between the Multichannel, Cross-channel and Omni-channel
Multichannel distribution: The business proposes several types of stores (physical and
online) and a different customer service on each one, which don’t interact together.
Cross-canal distribution: All the types of stores and customer services are integrated
together. For instance, a consumer can buy in store and contact the customer service
online. With the cross-channel distribution mode, there is a sense of complementarity.
Omni-canal distribution: There is a synergy between the points of sale and the customer
service. In other words, a customer can buy online and collect its product in a store. This
create a much flawless customer experience as consumers have many options available
to customize their purchasing experience.
Multichannel and crosschannel
Multichannel, Crosschannel, Omni-channel,
Multichannel, Crosschannel, Omni-channel
https://www.markentive.fr/blog/str • Definitions
http://business.critizr.com/blog/mul • Definition and
http://www.1fluencedigitale.com/m • Definitions and
Fnac turnover and financial results between 2013 and 2015
Fnac turnover and financial result
Added value created
Result of the activity
Result before tax
Annual results (loss or profit)
Analysis of Fnac’s
annual results in 2015
Analysis of Fnac’s
annual results in 2014
Analysis of Fnac’s
annual results in 2013
Country profile: Canada 2015
1. General characteristics
Location: Country situated in the North of the American continent, sharing land
borders with the United States. The country has maritime coasts in the Pacific
Ocean, Atlantic and Arctic. The capital city is Ottawa.
Economic and Social aspects: Canadian economic growth slowed down by the
global recession, GDP declined from the previous year but is expected to rebound
in the coming years. The economy depends heavily on exports and foreign direct
investments. Unemployment is decreasing, but households are still heavily
indebted. There is little inflation.
Institutional and Political characteristics: New Liberal Government, No Social
Tensions → Low Country Risk.
Cultural aspects: official languages: English and French
Technological characteristics: air, maritime and road infrastructures which are
modern, highly developed + computer science developed.
2. The country's place in international trade
Signature of new economic and trade agreements with the European Union (CETA)
and Asia (TTP), a country opened to the outside world and economically dependent
on trade, a trade deficit due to falling exports, the majority of exports and imports
are made with the United States, and decline in FDI (=foreign direct investments).
3. The country’s attractions
Dynamic economy, business climate, access to the market facilitated, large market
(quantitative), attractive tax framework, population with high purchasing power,
accessibility of work, sophisticated and developed infrastructures, modern
4. Some key figures (2015/2014)
GDP: USD 1,572.78 billion.
Growth slowed down between 2014 (2.4%) and 2015 (1%), but expected to rise
up by 2016 (1.7%).
GDP by sector: Services (69.4%), industry (28.9%), agriculture (1.8%).
Exports of goods and services: USD 484,767 million (3.4% annual growth)
Imports of goods and services: USD 531.777 million (0.3% annual growth)
Foreign trade: 65.4% of GDP-Population: 35.8 million inhabitants
Unemployment rate: 6.8%
Inflation rate: 1%
5. Market possibility, requirements to meet to enter the market
Possibility of market in: services (telecommunications, tourism, internet,
aerospace) and in the primary industry (minerals, oil, gas).
Barriers and conditions to enter the market: country dependant to the United
States, a financial system that is struggling to recover from the global financial
• Description of Canada
Risks in the
• Figures, tables
• No chart
Access to the
How to expand
• Short description of the
• How to create a business in
Tax and social
• Tax rates
• Governmental organisations
http://atlas.media.mit.edu/fr/pr • Economic data
• Monthly inflation for 2015
• Data difficult
• Graphs and
http://www.statcan.gc.ca/table • Median total revenue for
each province and territory
https://fr.wikipedia.org/wiki/Sta • Definition of monetary
• Consumption prices,
measures tools of
• Raw material prices
Population per year and per
provinces and territories
Population density in
Unemployment rate in
Canada and provinces
Taxation and investment in
Canada in 2015
• 5 habits of consumption that
will change the retail sector
• Canadian way of
• Canadian consumers profile
and market opportunities
• Overview of the Canadian
school system and details
• Graphs and analysis
https://www.canada.ca/en/servi • Transports and infrastructures in
• Canadian highway network
• List of international harbours
• Lists of international airports
http://www12.statcan.gc.ca/cen • Language proportion between
sus-recensement/2011/asFrench and English in Canada
http://www.quebecinternationa • Canadian purchasing power
http://www.tresor.economie.go • Trade deficit
uv.fr/13480_le-commerce• Export and import evolutions
• Trade partnership with the USA
• Country profile
• 2015 and 2016 GDP
• Details of each economic
Sector profile: consumer electronics (Canada, 2015)
• Consumer electronics represents one of the main economic sectors of Canada.
• Growing sector, promising market opportunities.
• The majority of companies are start-ups.
• Strong revenue growth potential in this sector.
• Annual increase in business capital investment → Signs of growing potential for
• Sector with a long-term potential that could replace the sector of natural resources.
• It is a market that is influenced by innovation.
2. Characteristic of the demand
• Consumers tend to prefer to buy local products. They like customizable products.
• Tendency to be careful with their expenses.
• Tend to research on the internet before buying products in stores.
• Pay attention to corporate cultures.
• Tendency to be influenced by advertising, media or fashion.
• Interest in ethics, the environment and national economic health.
3. Market accessibility (or barriers)
• 1 July 2016: Canada abolishes its tariffs on imports on 54 high-tech products for
82 WTO countries, with the addition of 49 other products to this list.
• Before this sector was composed of a small number of big companies (which have
been affected by the crisis in 2008). Consequently, today there are a lot of many
small businesses and companies in the market.
• The market is opened to foreign companies that have the skills and abilities to start
and contribute to the creation of new jobs.
• Competition and potential partners: Amazon, BestBuy, Walmart, eBay are the
international leaders. But Canadian producers (such as RIM, KOBO, Flickr,
HootSuite, Corel, CGI and Autodesk) are also very competitive in the market as
consumers like to buy local.
4. Market opportunities and conditions to enter (Key Succes Factor)
• Offer recognised brands, American and innovative products.
• Communicate about the company’ corporate culture and ethnical culture.
• It is vital for a company to have a strong marketing and communication.
5. Some key figures (2015/2014)
• $9 billion of the Canadian GDP, 7.1% of the Canadian GDP.
• 8.3 million consumers, penetration rate: 27.9%.
• 4th sector of the economy after the industry, natural resources and construction.
• First private sector with a lot of investments in R&D ($ 9.1 billion).
• Cities with strong jobs in the technology sector: Montréal and Toronto.
"Technology Triangle Area": Waterloo, Cambridge & Kitchener.
• The NTIC segment represents 61% of the sector.
• 84% of Canadian technology companies are profitable.
• The sector is valued at $250 billion on the Toronto Stock Exchange.
• The sector employs 864,000 people, representing 5.6% of Canadian jobs
6. The position of French companies in this sector
• Fnac is the France’s leading retailer of consumer electronics sales
Boulanger, Darty, But : French companies which are specialized in electronics and
household appliances. Fnac is already established on the American continent
Main hi-tech brands
Is the Canada the
world power ?
sectors in Canada
Retail in Canada
industry in Canada
• No market shares
Graph + chart
or quaitative data
Just one graph
Sector profile : E-commerce (Canada, 2015)
1 – Market
• Relationship between clients and offer: The online retail sector is progressing
every year. This development is not made at the expense of physical sales, in the
majority of the cases online sales is complementary to the traditional sales. The
offer can be adapted to mobiles and tablets but Canadians prefer to use computers
in order to make shopping researches and make their purchases. American
companies (Amazon, EBay, Etsy) are the best established.
• Segmentation : general sales (Amazon.com), specific sales (Canadiantire.ca).
• Supports : computers, mobiles, tablets.
• Distribution Channel : only online sales, few companies offer an omni-channel
2 – Characteristic of the demand
• Canadians prefer to buy on computers.
• Canadians prefer to buy on websites which owns physical stores.
• Rapidity and security of the website is decisive for Canadian consumers.
• For Canadians, online sales are especially a way to make good deals.
• Canadians buy on a regular bases on the internet.
• For Canadian consumers buying online is a way to save time, during peak periods.
• The products most bought online are clothing and trips.
3 – Market accessibility (or barriers)
• Competition from American giant’s websites (Amazon, eBay).
• Few specialised retail websites
• Few companies in the cross-channel and multichannel distribution
4 – Market opportunities and conditions to enter (Key Success Factor)
• To offer a multichannel experience, fast delivery and quality service.
• To be able to deliver the whole country because Canada is a big territory with
high geographical disparity of population.
• To customise websites in order to offer the most unique and personalised
• Offer discounts
5 – Some key figures (2015/2014)
• E-commerce market forecast for 2018: $40 billion USD.
• 18 million online buyers in 2015
• 67% of purchases are made on foreign sites, mainly American ones.
• 42% of purchases are clothing, 40% flights or travel packages, 34% of books
• On average 95% of users make their purchases on a computer.
• On average, 13.5% of Canadians buy via smartphone, 16.5% via tablet.
• 93% pay with their credit card, 7% via Interac the equivalent of Paypal in Canada.
6 – The position of French companies in this sector in 2015
• Cdiscount et Fnac : 2nd and 3rd most visited websites
• 7 French websites are in the top 10 of the most visited (Leroy Merlin, Carrefour…).
• There are more than 30 French companies with an online turnover of more than 50
million euros (Maison du monde, Darty, Spartoo, La Poste, Oscaro, La Redoute, ELeclerc, PMU).
• Voyages-SNCF = turnover of 3 557 000 000€, Cdiscount = turnover of 2 542 980€.
• Internationalisation of online retailing (Zalando, Air France, Vente-privée).
Data of Canada
E-commerce in Canada
The Canadian Electronic
76% of Canadians
shopped online last year
A quelle fréquence on
achète en ligne
• Few qualitative data
• Comparison with 2014 • No graph
• Analysis of different
data, different criteria
and rates of change
• Lack of reliable data
• Qualitative data
• Comparison with
http://www.pfsweb.com • Data analysis
• No graph
/pdf/Global• 2015 figures and data • Lack of data
eCommerce-Book• 2018 forecast
M-commerce (website and
Tree view of the sector of e-commerce
Tree view of the sector of retailing
Tree view of the sector of consumer electronics retailing
Ranges of products
Fnac’s competitive position in Canada on the market of online
retailing of consumer electronics
Large range of consumer electronics
products and diversified prices
Known for quality and good customer
Unique customer experience
Experience in opening stores in new
Various channels and means of
High and increasing revenues
The online sales and the consumer
electronics markets keep growing
agreements to reduce import taxes
Image of expensive retailer
Website not available in English and
providing a customized experience
Huge investments necessary
Very vast country difficult to
Low population growth
Population already equipped with
electronics in store
Very strong and well developed
competitors in the sector
Weighted decision matrices
(from 1 to
(from 1 to
nt from 1
(from 1 to
Weighted decision matrix
Accessibility of the market
Potentiality of the market
Security of the market
Weighted decision matrix of the company’s assets
offer in the
Control of the Key Success Factors
Sector of consumer electronics retailing
Online retailing sector
4P of the Fnac’s Mix Marketing Mix in the target countries
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Lessons of Mrs. Rakotoarivelo, Mr Leishman and Mr Dodeman.