Case study: Todos os Mercados
For use in May 2016
Instructions to candidates
Case study booklet required for higher level paper 1 and standard level paper 1 business
2216 – 5001
International Baccalaureate Organization 2016
Todos os Mercados (TM )
and a day in the life of Henri Trouvé,
Tuesday 26 January 2016
06:32, Henri Trouvé is driving to work. He is already tired. Last night he studied late at an
MBA class. He hoped the qualiﬁcation would lead to a better job or promotion. He is miserable
and reﬂects on why this is.
In 1965, his father set up a small hardware business in St Laurent, near Tillon in southern
France. The business was set up as a sole trader. His father made personal customer service,
especially free delivery to customers’ homes and workplaces, the unique selling point (USP)
of the business. As a child, Henri helped his parents at the store and worked there when he
ﬁnished school. At 32, when his parents retired, he became the owner and manager of the
business for what he thought would be the rest of his working life. However, two years later
that all changed. Todos os Mercados (TM ), a South American multinational company (MNC),
opened a TM hypermarket just outside St Laurent. TM is a public limited company. TM’s
hypermarket had a huge impact on the Trouvé business as it could not compete with it.
The Trouvé business went into liquidation when Henri failed to attract any external sources of
Desperate and with no income, Henri applied to work at TM. He was appointed manager of the
hardware section. The job title was more impressive than the job itself – he was little more than
a salesperson with minimal management responsibility.
TM’s stated main aim, based on its mission statement and expressed in all of its promotional
material, is to have the lowest prices in the market. TM uses lean production methods including
just-in-time (JIT) and outsourcing to cut the cost of sales. TM also keeps wages to a minimum
and strictly controls all aspects of employee performance. These approaches enable TM to
sell goods at much lower prices than its competitors. The rest of TM’s marketing mix supports
its low-price strategy. As TM grew, it was able to impose more favourable purchasing terms
from suppliers, which allowed TM to lower its prices even further. High market share and
market leadership are important for TM.
Historically, TM has used internal growth. TM’s attempts at external growth through franchising
were unsuccessful. TM opened new stores both in France and in many other regions around
the world. It expanded the range of goods it sold and eventually entered the services market.
Now every TM store sells hardware, home appliances, electronics, furniture, automotive parts
and ofﬁce supplies. TM has recently started offering banking facilities, insurance, pharmacies,
opticians and mobile phone services. TM is truly a “one stop” shopping destination and is
successful in many regions of the world. It is actively investigating development of new markets
TM has a regimented autocratic and centralized approach to human resource management.
Employees are not empowered and have to follow detailed work instructions and procedures
produced at headquarters in South America. Strict practices prevent employees talking to each
other while at work, and unscheduled breaks are not allowed. Employees who complain ﬁnd
themselves in trouble. TM has an inﬂexible organizational structure. In 2013, labour turnover
at the hypermarket in St Laurent was much lower than expected. This was due to the economic
recession which meant that there were few employment opportunities in the local area.
The impact of TM on communities, including St Laurent, is mixed. On the one hand, the
hypermarkets provide much-needed employment. It also allows customers to buy many kinds
of goods at very low prices – analysts estimate that families could typically save between $2000
and $5000 a year by shopping at TM. On the other hand, when TM opens a hypermarket in a
town many small shops in that town go out of business, just like Henri’s. TM has a poor record
of corporate social responsibility (CSR), and many pressure groups are urging TM to adopt
06:45, Henri arrives at work. He reports to Delphine Jacques, his line manager and superior
in the chain of command, who checks his arrival time. Although Henri resents this process,
he knows Delphine is only following company policy. He likes Delphine: she has a warm
personality and encourages him in his work. She, too, is grateful for the work because she is a
single mother with two children. She is hard-working and efﬁcient and never complains. She is
one of the few employees to have been promoted internally.
06:50, Henri is at his work station ready to check arrival times of the employees in his team.
07:00, the hypermarket opens. Henri is ready for the tedious day ahead.
11:30, Henri goes to the managers’ staffroom for his ofﬁcial lunch break. He is tired.
TM insists that managers eat separately from non-managerial employees. Even managers
are discouraged from eating together – TM does not want them expressing collective opinions
about TM. Henri thinks that TM’s workers are beginning to talk more about worker’s rights and
protests. Henri sits there alone. He thinks about this week’s reading material for his MBA –
Daniel Pink’s “Drive: The surprising truth about what motivates us” – it gets him wondering why
TM uses motivational strategies that are so completely different from Pink’s ideas.
12:00 noon, when Henri returns to the stockroom, he sees two young employees writing
grafﬁti protesting the wages and management style. He is angry, but unsure what to do. He
is a paternalistic leader so his instinct is to talk to the two young employees and get them to
remove the offensive words. However, according to TM policy, he must report them to a senior
manager, who would immediately dismiss them. Henri thinks, “this is too harsh as they would
have no chance of getting another job”. He feels the need for worker solidarity. He knows
that he, himself, might be disciplined for not reporting this behaviour, but he pretends not to
14:07, Henri has to deal with an extremely rude customer.
15:02, Henri is exhausted – he wishes it were the end of the day. His mind wanders to tonight’s
MBA class. At least he’d be allowed to think aloud there. He “stole time” from TM by checking
his homework on his smartphone. He is shocked – the next case study is about TM. This is
another blow: now he has to think about TM all the time.
16:00, Henri records the ﬁnishing time of his team and reports his own ﬁnishing time to
16:10, Henri arrives at the public library. He reads the TM case study carefully. The case
study mentions various external factors – the lack of jobs in France has increased demand for
university places as young people delay starting their careers and middle-aged people, like
Henri, try to strengthen their qualiﬁcations. Data in the case study shows very weak economic
conditions in France and demographic trends that are hindering economic recovery. The case
study also states two signiﬁcant threats to TM’s position in the market – the increasing use of
e-commerce by global competitors and customized production – and one signiﬁcant weakness:
a workforce that is treated badly.
The case study contains ﬁnancial information for TM, which Henri uses to calculate ﬁnancial
ratios. He is shocked.
18:15, he phones his wife. She, too, is exhausted. As well as managing the household and
looking after the children, she has a full-time job as a dental assistant. She feels overwhelmed.
Henri reassures her that he will help her and that once he gets his MBA things will be better.
Even with an MBA, she worries that he would struggle to get a better job.
18:30, class begins. His tutor, Dr Lominé, will spend the ﬁrst hour looking at human resource
management, then an hour on marketing, then another hour on ﬁnance and accounts.
Dr Lominé begins by asking whether TM’s employment practices regarding wages and working
conditions are ethical. The students recognize the need for TM’s proﬁt-driven objectives, but
they are far less enthusiastic about how TM treats its workers. Henri keeps quiet. “If I criticize
TM in public, I could be dismissed,” he thinks.
Dr Lominé makes it clear that there will be major pieces of assessed work for the MBA that
examine human resource management issues, in particular how effective TM is at managing its
employees. Henri had heard rumours in the workplace that employment practices and contracts
were likely to change soon as TM attempts to cut even more costs.
21:40, Henri sets off for home. He can hardly keep his eyes open. “At least I don’t have class
tomorrow so I can spend the evening with my family.”
22:20, Henri arrives home. He is furious. Every light in the house is on. His children ignore him
as he comes in – they are sending text messages and playing video games.
00:00 midnight, Henri goes to bed. Elise is already asleep. He says “good night”, thinking that
with luck he will get six hours sleep.
Companies, products, or individuals named in this case study are ﬁctitious and any similarities with
actual entities are purely coincidental.