description of Verical Integration with an exemple of a french company : Les Mousquetaires, Intermarché.

1. All united against the expensive life!!

2. Les Mousquetaires, Intermarché
Enterprise are essential for economic system :
• Places of production and distribution of products of
consumption => Mouvement of Money.
• Several competitors :

3. Plan
I) Presentation of the group Les Mousquetaires,
Intermarché.
II) The Strategies of Les Mousquetaires, Intermarché :
A) The Vertical Integration.
B) The Diversification.
III) Why they have chosen those 2
strategies ?

4. Presentation of the group Les
Mousquetaires, Intermarché :
• Company established in 1969 with the name : EX Offices de
distribution
• By Jean-Pierre Le Roch
• In 1972, the EX became Les Mousquetaires, headquarters
settled down in Paris.

5. Presentation of the group Les
Mousquetaires, Intermarché :
• On June 9th 2009, Les Mousquetaires announced the
extension of the name Intermarché for all their food
subsidiaries except Netto.
 New visual identity

6. Presentation of the group Les
Mousquetaires, Intermarché :
The sign is declined according the sales area and its localization :
 Intermarché Hyper for largest stores, more than 3200 square
meter.
 Intermarché Super for stores around 2000 square meter.
Most stores with the old concept of Les Mousquetaires.
 Intermarché Express for retail outlets less than 1000 squatter
meter. This type of store is located in
large cities : Paris, Lyon, Lille, Toulouse, Nice, …
• 24 Intermarché Express in 2011
• 50 by the end of 2012

7. Presentation of the group Les
Mousquetaires, Intermarché :
 Intermarché Contact replaces the old Ecomarché in the rural
areas.
• In 2002, total sales areas more than
2.66 million square meters.

8. Presentation of the group Les
Mousquetaires, Intermarché :
• Intermarché has its own brand : Top Budget
• Top Budget includes more than 450 food
products : 50% or 75% cheaper than products
of top brand.

9. Presentation of the group Les
Mousquetaires, Intermarché :
• The slogan of Intermarché is:
All united
Against
The expensive life!!

10. The strategies of Les
Mousquetaires, Intermarché : V.I
What is The vertical Integration ?
Vertical Integration is an approach to increase or decrease the
level of control that a company has on its products as input and
product distribution of outputs.
With Vertical Integration enterprises control more than one of
the successive production stages.

11. The strategies of Les Mousquetaires,
Intermarché : V.I
There are two types of Vertical Integration:
• Backward Integration
• Forward integration.

12. The strategies of Les Mousquetaires,
Intermarché : V.I
• The Backward Integration :
The Backward Integration integrates the preceding production
stages of a product. The enterprise has a control of its product of
input or its alimentation. This type of Integration is also called
the upstream expansion.

13. The strategies of Les
Mousquetaires, Intermarché : V.I
• The Backward Integration :
Raw Materials
Intermediate Manufacturing
&
ASSEMBLY
Distribution : Supermarket
Intermarché
End customer

14. The strategies of Les
Mousquetaires, Intermarché : V.I
• The Forward Integration :
Also called the downstream expansion. This integration
integrates the next production stage and allows the firm to
control the distribution.

15. The strategies of Les Mousquetaires,
Intermarché : V.I
Raw Materials
Intermediate Manufacturing
ASSEMBLY
&
Distribution : Supermarket Intermarché
End customer

16. The strategies of Les
Mousquetaires, Intermarché : V.I
• The Internal expension : The firm creates a new
line of production.
• The External expension : The firm buy an existing
compagny.
 No more opportunism with
subcontractors.
 More efficient.
 Prices of products sold more low.

17. The strategies of Les
Mousquetaires, Intermarché : V.I
• Intermarché is the only one in France to have
its own fishing boats:
- 40 fishings boats
- 33 000 tons of fish per year
- 20000 tons for Intermarché
- One thousand of workers
thanks to fishing boats.

18. The strategies of Les Mousquetaires,
Intermarché : V.I
• Gulf Stream for fresh fish.
• Captain Cook for smoked fish and canned fish.
• Captain Houat & Odysée for frozen fish

19. The strategies of Les
Mousquetaires, Intermarché : V.I
• Intermarché is also the owner of 6O factories, mainly in food-
processing industry:
- Bouton d’Or
- A gigantic slaughterhouse
- A canning vegetable and even water sources
minerals
- A wine factory

20. The strategies of Les Mousquetaires,
Intermarché : V.I
• Most part of all industries are located in
western France.

21. The strategies of Les Mousquetaires,
Intermarché : V.I
• 38% of products purchased in Intermarché are from its own
factories.
• Today Intermarché is the head of a small industrial empire of
9,000 employees who weighs 2.8 billion in revenue.
The goal of Intermarché :
 To make 4 million euros of turnover per year by 2015.
 To take part of the top 5 of the big French
Food-processing industries

22. The strategies of Les
Mousquetaires, Intermarché : Diversification.
• Strategy used to expend firm’s operations by
adding new markets, new products, new
services, or new stages of production to the
existing business.
• Goal :
To allow the company to enter lines
of business that are different from
current operations.

23. The strategies of Les
Mousquetaires, Intermarché : Diversification.
• In 1979 Les Mousquetaires are studying
several possible path of development.
 foundation of Bricomarché the same year.
In 1980 : Restaumarché.

24. The strategies of Les
Mousquetaires, Intermarché : Diversification.
• In 1982 : Stationmarché, today called
• Restaurant :

25. Why they have chosen those two strategies ?
 To be one of the biggest French food-
processing.
To control quality, quantity.
Avoid opportunism of subcontractor.
To sell product with a low price.
To take a big part of the market