Cas d'entreprise FNAC (document en anglais)

FNAC

Fnac (originally Fédération Nationale d’Achats des Cadres, or National Purchasing Federation of Managers) is an international entertainment retail chain offering cultural and electronic products, founded by André Essel and Max Théret in 1954. It is the largest retailer in France that proposes, in an unique space, an assortment of six products: books, CDs, micro computing, sound, video and photography.

Strongly introduced in France, with 81 stores at the end of 2010, Fnac is also having an international development with 150 selling points distributed in seven countries: Belgium, Spain, Italy, Portugal, Switzerland and Brazil.

At the same time as a distributor’s activity, Fnac plays a role of influential and cultural actor on each of its markets. In 2010, Fnac realized a 4 473 million euro turnover. Its turnover places it among the first 20 French distribution companies and the first 500 European companies.

Figures

152 The number of stores, 80 in France.

4,4 Mrds € The turnover in 2010.

Approximately 350 M € The turnover for fnac.fr (estimation).

82 % The part of turnover made in France

PORTER’S FIVE-FORCES MODEL

Entry Barriers:

Established in 1954, this company possesses a strong business experience of products and cultural leisure activities.

This brand is recognized in the national and international level because it is the only company that proposes in one place (shop), a lot of different products (books, CDs, micro computing, sound, video and photography).

It uses the partnership to be present in most of cultural events which take place in France.

It sets up a loyalty card which offers to the members:

-5 % discount on the high-tech products and on their accessories

-25 % discount every month in high-tech, games, software, journeys, and shows

-an awarded points program each time the card is used at the till-point

-45 days deferred payment without financial cost, easy terms of payment in installments

-an exclusive magazine for members

-discount in more than 2000 partner selling points related to leisure activities, household equipment, optics, car equipment, travels...

Before arriving at the store, the products undergo a series of technical tests. These tests are realized by a test laboratory created by the FNAC in 1972, which is considered among the most accurate labs in the world. It is totally independent from big brands; it should be completely objective. It makes every year ten thousand comparative measures on the hi-fi material(equipment), videos, photos, telephony, micro computing … These try-outs allow to help, on one hand, the purchases services of the FNAC to select the best products in the market and on the other hand, to help the customers in their choices.

Fnac signed on February 16th2010 in Paris its new charter Social and environmental Responsibility (RSE) and invites its suppliers to join to the initiative "to implement a sustainable development innovative and voluntarist policy"

All these Fnac’s characteristics make it difficult for a new rival to enter the industry because Fnac occupies a big place in France. Nevertheless, there are small firms specializing in the sale of CDs or Movies or books and also electronic products.

Rivalry Determinants:

For the FNAC, the competition is not necessarily the same in the different sectors:

• Concerning CDs and DVDs, the competitors are Leclerc cultural centers, the hypermarket chains (Carrefour, Auchan), the markets, Virgin Megastores, record dealers of the district.

On the Internet: amazon.com, virgin.com, priceminister.com

• Concerning books, the competitors are the specialized bookshops, installed for a long time in the city as Gibert, but also the hypermarkets chains (Leclerc, Carrefour, Auchan)There is a slightest competition in this area because the prices of the books are fixed by the editors so there can't be done any promotional activities

The functioning is different in the other markets like the CDs where the absence of regulation removed the quasi-totality of the independent record dealers and concentrated the market among a few actors

On the Internet: amazon.com, alapage.com, chapitre.com, abebooks.com

• Concerning computer hardware, there are stores of massive-market retailing(large distribution) (Leclerc, Carrefour(Crossroads), Auchan) or specialized stores (Boulanger, Darty, Conforama)

On the internet: rueducommerce.com, pixmania.com, cdiscount.com, amazon.com.

• Concerning downloads: Fnac has in France 20 % of market share, the sector grows every year howeverI -tunesis the strongest competitors which is the first download supplier in the world. There are also minor competitors like Virginmega.fr, Starzik.com.

Effectively, there is more and more competition on behalf of hypermarkets chains, which try to encroach on the markets of the FNAC. They are constantly in a renewed effort to improve their sales and try to fill up the shelves with CDs, household electrical appliances, computers etc … They are trying to monopolize and control the market. They look like mini FNAC. Carrefour increased 30 % its offer of television sets, 144000 tracks of CD and offers a choice multiplied by ten in the household electrical appliances.

In the field

...