case study

It all started in the bustling and commercial Calle de Preciados in Madrid. The English Court began its journey here in 1890 as tailoring and clothing for children, becoming a highly appreciated establishment among the neighbors where they went to buy clothes and fabrics for their preparation.

Over the years, this small store has developed thanks to its two drivers Csar Rodrguez and Ramn Areces, acquiring more and more dimensions. So by For example, what was a limited company in the 40s, became a public limited company in the early 50s, with its corresponding capital increase. Cesar Rodriguez He held the position of President and Ramn Areces, his nephew, the General Director. But everything was not a path of roses for the fledgling store. Also in these years competition was important and fundamentally, the main competitor that could Shade was, Galeras Preciados. These stores already had a building of large dimensions in which the sale was organized by departments, the latter really novel for the sector and for its time; idea that was copied by El Corte Ingles. The competition between El Corte Ingls and Galeras Preciados, from the fifties, represented a true revolution in the distribution sector in Spain, as was the introduction of window dressing on a large scale, the purchase cards typical of the establishment, the massive use of advertising and publicity campaigns and on all the introduction of seasonal sales, a true commercial revolution.

The following years were years of consolidation of the family business, opening its first establishment outside the capital, in Barcelona in the 60s. This growth unstoppable, although certain that it was based on self-financing and prudence in investment, contrasted with the more dynamic activity expansionist of Galeras Preciados, his constant competitor. But it is from the 80s when El Corte Ingls began a more aggressive expansion which translates into new centers in Madrid and other Spanish cities, and also a boost in terms of diversification of services and commercial formats. Between these strategic moves, he found himself buying his eternal rival, Galeras Preciados, It was already in serious financial difficulties. For the English Court, it meant a greater presence by adapting said properties, to social recognition and success economic that El Corte Ingls had already earned. Regarding its international expansion; begins in 1983 with the acquisition in the USA. of Harrys Company, a medium-sized department store chain surface. The success is not as expected and in 1998 through an agreement with Gottschalk Inc, the latter absorbs the former in exchange for ceding a stake to El Corte Ingls 16% of its shareholders. This expansion in the US finally represents an investment bankruptcy when Got-tschalks filed for bankruptcy in January 2009, causing a greater prudence in its international expansion that is only repeated in the format of Department stores through the opening of El Corte Ingls in Portugal in 2001 and It limits a lot in the small and medium surface format with Sfera as the only one project and preferably through franchises outside of Spain and Portugal. (Source: International expansion of El Corte Ingls). Diversification in El Corte Ingls The group is currently made up of a significant number of companies, including that are found; Hipercor, Opencor, Supercor, Sfera, Bricor, ptica 2000 and Telecor, which which makes it the first Spanish distribution group and is among the leaders world department stores. To this diversification, more recently it has been added the so-called Department Store, focused on the sale of luxury brands (Annex I, trademarks of El Corte Ingls).

Culture of El Corte Ingls

According to the annual report prepared by the company, the values of this family business can be specified in the following statement: The El Corte Ingls Group maintains a solid business model based on a series of ethical and responsible principles, commitment to the client, respect for employees, and links with the social and environmental environment. On these pillars, The company has developed a Corporate Social Responsibility (CSR) policy that is integrated into its own management strategy and forms part of the daily activity of the business. During the more than seventy years of the Group's history, these principles have set the path on which our business model walks which, at the same time, has been able to adapt to the new trends and methodologies that a modern conception of CSR. The El Corte Ingls Group considers that a socially responsible strategy must affect the entire organization as a whole. For this reason, there is an integrated CSR Committee by management and with representation from all areas of activity of the company. Is a way of guaranteeing that these principles transcend all spheres of activity and at all levels of the organization In addition and to gain operability, there are several interdisciplinary working groups linked to the different subjects related to CSR with the aim of facilitating the Social Responsibility Committee decision making. El Corte Ingls is adhered to the United Nations Global Compact, which means assuming as their own the ethical principles and respect for human, labor and environmental aspects that make up this international code.

El Corte Ingls and the customer

Based on the annual report of El Corte Ingls, its strategy is to strengthen a relationship with the client according to the following criteria. The client constitutes the axis of our activity; It is our priority and our reason for to be. For this reason, the entire commercial strategy is developed according to their needs and your satisfaction, with proposals for quality, innovative products and services, with all security guarantees and adapted to new trends and market demands. All the decisions that are made have a single objective: to gain the trust of our clients and respond to them as they deserve because by trusting us, we they make grow This mutual trust reinforces our commitments that are summarized in the motto: "If you are not satisfied, we will refund your money". As a result of this close relationship that we maintain with the client, during the year 2011 we received more than 630 million of visits to all the Group's stores, most of which were to customer service centers El Corte Ingls and Hipercor. A large part of customers have the purchase card El Corte Ingls that has almost 11 million users.

New technologies

Until 2010, the online business of El Corte Ingls was based on the concept of virtual showcase, where you could buy those same products existing in the different stores, but it is from 2011 where the group makes a change strategic when orienting this tool by placing the center on the client and their relationship with him, having as a first result the creation of Primeriti (online sales club, whose purpose is to sell stocks from major brands reaching discounts up to 70%). In 2011, the El Corte Ingls website received more than 122 million visits, 18.4% more than the previous year, and 3.8 million registered users, which makes it a benchmark for electronic commerce in Spain. In addition, the Group has pages specific to other lines of business, each of which offers what their customers demand, from information on offers or product promotions even didactic guides, advice or news. (Source: El Corte Ingls).

The economic crisis, the fierce competition between distributors, the drop in prices In general, smart purchasing by the customer has recently led the group to launch the white label of its products for sale in supermarkets. in an eagerness to compete with the strategic and skillful Mercadona, El Corte Ingls launches its brand of low cost, ALLIED, in an attempt to offer consumers the basic products of the shopping cart at more affordable prices. This new Aliada brand has an offer of 200 products, with dairy products, oils, pastries, charcuterie, preserves, drinks, appetizers, etc. But it also extends to cleaning products, perfumery and drugstore, and even pet food. The launch of the Veckia brand in cosmetics with 200 references and Gals & Guys brand of youth clothing inspired by typically college fashion, are a shows more of this distribution giant's commitment to the low-cost model.

1. El Corte Ingls department store: Department store activity is the classic business of the company, that is to say, the distribution in large format area and departments.

2. Hipercor: Corresponds to the activity of hypermarkets.

3. Supercor: Medium-sized area in the proximity supermarket format due to the rise of this modality since the late 1990s.

4. Opencor: Convenience stores. Born with the aim of becoming Proximity and trust store, and its extensive business hours from 18 hours to days including holidays, seeks to respond to the needs of society.

5. ptica 2000: Stores specializing in vision and hearing products.

6. Sfera: Fashion and accessories chain. The group is basing part of its expansion through franchises.

7. Bricor: Shop specializing in DIY and decoration.

8. Telecor: Marketer of telecommunications services and products for individuals and companies.

9. Viajes El Corte Ingls: Travel agency with 700 offices.

10. Investrnica: It carries out its activity as a computer and telephone wholesaler, was created with the objective of addressing the market through a complete offer for distributors. It sells its own computer brand: INVES.

11. Financiera El Corte Ingls: Provides financing to the buyer for the acquisition with deferred payment of all kinds of goods and services that you acquire in the commercial establishments of the El Corte Ingls Group.

12. Seguros El Corte Ingls: Insurance brokerage service.

Questions to resolve the case:

To what is the success of El Corte Ingls due? How would you define the strategy of El Corte Ingls?

What is El Corte Ingls doing differently in terms of its strategy in relation to what you did before?

What challenges are currently facing El Corte Ingls?