El Corte Ingles Study Case

11 November 2016

Corte Ingles can be considered one of the most successfully world case in its sector of business nowadays. The expansion along the history until it becomes a leader in the Spanish market was impressive. El Corte Ingles is originally a department store opened in 1935 in Madrid, Spain. From 60’s, the shop starts its expansion in line with the department store concept into other cities of Spain, and then diversified its commercial activities in other business sectors, like travel agency and supermarket.

In this text, I will try to make an international analysis of this particular company, El Corte Ingles, presenting all the steps studied in four parts: Demand analysis, Supply analysis, Industry structure, Strategic issues for the industry. 1. Demand analysis El Corte Ingles is the first group of Spanish distribution and one of the world’s leading department stores. In a traditional store, there are more than 10 departments, including Electronics, Informatics, Culture and Books, Sports Equipments, Fashion and Wearing, Kids Accessories, Toys, Home Furniture, Perfums and Fragrances and others.

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In most of them, there are also a Coffee and Gourmet Shop, Travel Agency and Insurance Center. All of them are almost in a same place. The department stores are located in large urban centers, as Madrid, Barcelona, Seville, Bilbao and now in Lisbon. Their space is designed like a Shopping center with a great variety of products and services, distributed in a large, fashion and comfortable dimension (more than 2. 500m2) with 2 or more floors and escalators, to satisfy the customer.

The company is located in Spain and Portugal, and plans to expand into other parts in Europe where concentrates 24% of the geographical distribution of consumption (FREIRE, 1998). El Corte Ingles uses modern commercial equipments that facilitates the staff’s work and accelerate time to their customers. The company also has a social concern doing the responsible consumption of resources, proper management of waste and public awareness. 2. Supply analysis Each season, more than a thousand brands and suppliers present the new trends and their proposals to El Corte Ingles.

The best known national and international brands, in some cases exclusively for El Corte Ingles, as well as the sign of many designers make El Corte Ingles an interesting place with variety of offer, the dimension of space and product quality. The Group maintains with its suppliers a strong partnership whose the goal is to guarantee to customers, and society as a whole, respect for ethical principles of the internal operations of businesses, products processing and environmental protection.

In its policy of linkage with society, the group maintains relationship with all kinds of social organizations (NGOs, consumer groups, employers, public and private institutions, etc. ). 3. Industry structure El Corte Ingles, since more than 70 years of experience, has maintained a policy of customer service and a constant interest in adapted to the tastes and needs that society demands. The company sales culture at El Corte Ingles is based on quality, service, diversification, specialization and guarantee, like its motto: “If you’re not satisfied, we’ll refund you your money”.

Experts say that ECI’s key success factors might be due to: product diversity in one unique space, local distributors for brand and national products, group distributors for group brands, sales area promotions (advertising campaigns), satisfaction guarantees, excellence in sales service, customer cards, etc. The group has pursued a strategy of diversification along with a policy of specialization that it has resulted in the creation of several commercial formats. Each of the chains respond to demands that requires a particular market segment: Hipercor, Opencor, Supercor, Sfera, Telecor, Bricor, Optica 2000.

And they have also a Travel Agency, an Insurance, and a Financial company. All of them take together more than 109,000 employees. In most of case, the ECI Group buys a small company or few stores of a big one, change the name to start their activity in the new market, like the Hipercor S. A. that acquired 5 hypermarkets from the company Carrefour S. A, in 2001. A month later, the hypermarkets opened under the name of Hipercor. 4. Strategic issues for the industry According to the ECI’s president, there are three lines of work in closed future.

First, continue to gamble on the department store “complete, competitive, with specialty stores, with the sign of distinction of personalized service and security that have the best supply of similar establishments in Europe”, secondly, to continue with their programs expansion, diversification, improvement and incorporation of the most prestigious brands, and third, to enforce the principles that have given the leadership of the Spanish market and which form the basis of trust and consumer satisfaction: best quality, service impeccable, complete range, specializing in the areas of sales and professionals, and full guarantee.

It’s Expansion Planning includes preparing itself to open a store in other parts of Europe, like in Rome.

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