*First section in attached images*To support its network, Leroy Merlin prefers to build and run its own distribution facilities where possible. During 2015 and 2016, the company partnered with a developer to construct a 100,000-square-meter facility to the south of Moscow. 80% of the company's domestic suppliers are located in the Moscow area, Poulet explains, making the region an important one for both its inbound and outbound supply chain activities.To protect their purchasing power during the crisis, Russian families switched to cheaper products wherever they could. For Leroy Merlin, that meant a huge demand in its lowest-priced, "basic" product categories. For a company that already operates on an "everyday low price" basis, that meant increased pressure to keep supply chain costs down. Leroy Merlin has also worked hard to accelerate its supply chain, doubling the share of inventory that passes through its cross-dock operations to 43% this year, with plans to increase that to 55% in 2017.When it comes to road transportation, the crisis has created some unexpected challenges. The weak ruble and resulting collapse in the sales of imported goods meant there were fewer trucks transporting merchandise from ports in the north and south of the country to Moscow. That led to a reduction in available capacity in the opposite direction, creating a capacity crunch for Leroy Merlin, which ships a significant volume from its main Moscow distribution centers to stores in those regions. "The cost of transport increased a lot on these routes," he notes.Some transportation challenges had causes unrelated to the crisis. The start of a new national system of road tolls has increased costs and administrative complexity for transport companies, especially for the small owner-operated motor carriers that still dominate the market in Russia. That change took a lot of capacity out of the market and pushed up prices in 2016. Other regulatory changes have helped the business, however. The closure by municipal authorities of informal open-air markets in many regions, for example, is encouraging more customers to switch to organized retail channels.Leroy Merlin imports about half of its merchandise, with goods arriving via multiple routes, including ports at Vladivostok, Rostov-on-Don, and Riga (Latvia), as well as via road freight from Europe. The remaining 50% of the products sold in Leroy Merlin's Russian stores are bought from local Russian suppliers and the company aims to increase the share of local products to 80%. The push for local sourcing is important. "As a big company, it is our duty to develop the community, but more local sourcing also reduces our exposure to currency risks."Among the challenges in Russia, Logistics service providers capable of delivering a consistent, high-quality service remain hard to find. "The growth in e-commerce has encourage rapid expansion in the logistics sector, but we now have thousands of providers all offering the same, low-quality service", "It is difficult to develop sustainable and stable partnerships."In early 2017, things appear to be good. The price of oil has risen to a level that favors Russia's producers, and the ruble has strengthened in response. Forecaster Oxford Economics predicts that the country's economy will return to growth this year.Questions:In what ways is the economic condition in Russia similar to that of Egypt?According to Leroy Merlin’s case, which business strategy are they applying? Differentiation, cost leadership or focus? And why?Which strategy you think is best to apply in the Russian market? Home Replication, Multi domestic strategy or Global Strategy? And Why?Leroy Merlin sometimes produces similar products in different factories with different suppliers. What types of risks are being avoided by this strategy?Sustainability is of prime concern Leroy Merlin management in every country they operate in. By using online resources, provide some suggestions on how Leroy Merlin or retailers in general can adopt green practices for its global logistics and supply chain operations?Location decision in a global supply chain is affected by four elements: country-related issues, product-related issues, government policies and organizational issues. Discuss how these four elements impacted Leroy Merlin’s decision to operate in Russia.From the case, give examples on how the regulatory system in Russia resulted in a positive and a negative effect on Leroy Merlin’s operations?Write 3 main lessons to be learned from Russia’s experience to provide to the business sector in Egypt. Russia, has long been an important growthmarket for global firms. With a population of148 million, Russia's economy has benefitedfrom high global energy prices. The country'shuge oil and gas sector accounts for 20% ofGDP and 65% of its exports. In 2014, however,the country faced a sudden drop in its economy.The collapse in the oil price (from more than$100 per barrel to less than $30 by the end of2015) decreased export earnings. Sanctionsapplied by the United States, the EuropeanUnion, and other nations in response to Russia'srelations with Ukraine escalated the economicchallenges. GDP fell by almost 5% in 2015, andthe rapid devaluation of the ruble (which losttwo-thirds of its value against the dollar by theend of 2015) drove up the price of imports,pushing down consumption of imported goodsand services by more than 25%.The depth and severity of the crisis hitcompanies hard, causing many internationalplayers to reevaluate their Russia strategy.Some decided to decrease their retail networksfor example the General Motors (GM) toextremely reduce their presence in the country.Other multinationals, however, see today'stough conditions as a strategic opportunity.They have chosen to use the crisis, sticking tolong-term development plans. Moreover, theeconomic situation in the country has created ahighly favorable environment for certain kindsof supply chain investments. In particular, the real estate infrastructurecompanies that serve Russian markets hasbecome dramatically cheaper. Vacancy rates forwarehouse and logistics facilities in Moscowreached 13.6% by the third quarter of 2016, thehighest since 2009. Tough market conditionsalso meant companies with existing facilities inRussia could renegotiate leases on favorableterms, or take advantage of additional capacityin the market. For example, Adidas haspurchased the distribution center in the south ofMoscow that it had previously leased. Adidasacquired the 120,000-square-meter building at arelatively low price from a landlord in need ofcapital.Another successful example is the Russiandivision of the gardening French retailer LeroyMerlin. Their expansion plan involves around20 new store openings every year, and thecompany opened its 59th store in Russia in thefinal days of 2016. The retailer is alsoexpanding its geographical scope. It will openits first store in Khabarovsk, which is 9,000kilometers from Moscow by road. Eric Poulet,director of supply chain at Leroy Merlin inRussia, notes that while the average LeroyMerlin store in France sells around 3.4 millionitems per year, Russian stores sell between 16and 19 million. In France, the company's supplychain moves around 470 million items per year.In Russia, that number is now over 1 billion. Tosupport its network, Leroy Merlin prefers tobuild and run its own distribution facilitieswhere possible. During 2015 and 2016, thea developer tocompany partnered with

Question

*First section in attached images*To support its network, Leroy Merlin prefers to build and run its own distribution facilities where possible. During 2015 and 2016, the company partnered with a developer to construct a 100,000-square-meter facility to the south of Moscow. 80% of the company's domestic suppliers are located in the Moscow area, Poulet explains, making the region an important one for both its inbound and outbound supply chain activities.To protect their purchasing power during the crisis, Russian families switched to cheaper products wherever they could. For Leroy Merlin, that meant a huge demand in its lowest-priced, &#34;basic&#34; product categories. For a company that already operates on an &#34;everyday low price&#34; basis, that meant increased pressure to keep supply chain costs down. Leroy Merlin has also worked hard to accelerate its supply chain, doubling the share of inventory that passes through its cross-dock operations to 43% this year, with plans to increase that to 55% in 2017.When it comes to road transportation, the crisis has created some unexpected challenges. The weak ruble and resulting collapse in the sales of imported goods meant there were fewer trucks transporting merchandise from ports in the north and south of the country to Moscow. That led to a reduction in available capacity in the opposite direction, creating a capacity crunch for Leroy Merlin, which ships a significant volume from its main Moscow distribution centers to stores in those regions. &#34;The cost of transport increased a lot on these routes,&#34; he notes.Some transportation challenges had causes unrelated to the crisis. The start of a new national system of road tolls has increased costs and administrative complexity for transport companies, especially for the small owner-operated motor carriers that still dominate the market in Russia. That change took a lot of capacity out of the market and pushed up prices in 2016. Other regulatory changes have helped the business, however. The closure by municipal authorities of informal open-air markets in many regions, for example, is encouraging more customers to switch to organized retail channels.Leroy Merlin imports about half of its merchandise, with goods arriving via multiple routes, including ports at Vladivostok, Rostov-on-Don, and Riga (Latvia), as well as via road freight from Europe. The remaining 50% of the products sold in Leroy Merlin's Russian stores are bought from local Russian suppliers and the company aims to increase the share of local products to 80%. The push for local sourcing is important. &#34;As a big company, it is our duty to develop the community, but more local sourcing also reduces our exposure to currency risks.&#34;Among the challenges in Russia, Logistics service providers capable of delivering a consistent, high-quality service remain hard to find. &#34;The growth in e-commerce has encourage rapid expansion in the logistics sector, but we now have thousands of providers all offering the same, low-quality service&#34;, &#34;It is difficult to develop sustainable and stable partnerships.&#34;In early 2017, things appear to be good. The price of oil has risen to a level that favors Russia's producers, and the ruble has strengthened in response. Forecaster Oxford Economics predicts that the country's economy will return to growth this year.Questions:In what ways is the economic condition in Russia similar to that of Egypt?According to Leroy Merlin’s case, which business strategy are they applying? Differentiation, cost leadership or focus? And why?Which strategy you think is best to apply in the Russian market? Home Replication, Multi domestic strategy or Global Strategy? And Why?Leroy Merlin sometimes produces similar products in different factories with different suppliers. What types of risks are being avoided by this strategy?Sustainability is of prime concern Leroy Merlin management in every country they operate in. By using online resources, provide some suggestions on how Leroy Merlin or retailers in general can adopt green practices for its global logistics and supply chain operations?Location decision in a global supply chain is affected by four elements: country-related issues, product-related issues, government policies and organizational issues. Discuss how these four elements impacted Leroy Merlin’s decision to operate in Russia.From the case, give examples on how the regulatory system in Russia resulted in a positive and a negative effect on Leroy Merlin’s operations?Write 3 main lessons to be learned from Russia’s experience to provide to the business sector in Egypt. Russia, has long been an important growthmarket for global firms. With a population of148 million, Russia's economy has benefitedfrom high global energy prices. The country'shuge oil and gas sector accounts for 20% ofGDP and 65% of its exports. In 2014, however,the country faced a sudden drop in its economy.The collapse in the oil price (from more than$100 per barrel to less than $30 by the end of2015) decreased export earnings. Sanctionsapplied by the United States, the EuropeanUnion, and other nations in response to Russia'srelations with Ukraine escalated the economicchallenges. GDP fell by almost 5% in 2015, andthe rapid devaluation of the ruble (which losttwo-thirds of its value against the dollar by theend of 2015) drove up the price of imports,pushing down consumption of imported goodsand services by more than 25%.The depth and severity of the crisis hitcompanies hard, causing many internationalplayers to reevaluate their Russia strategy.Some decided to decrease their retail networksfor example the General Motors (GM) toextremely reduce their presence in the country.Other multinationals, however, see today'stough conditions as a strategic opportunity.They have chosen to use the crisis, sticking tolong-term development plans. Moreover, theeconomic situation in the country has created ahighly favorable environment for certain kindsof supply chain investments. In particular, the real estate infrastructurecompanies that serve Russian markets hasbecome dramatically cheaper. Vacancy rates forwarehouse and logistics facilities in Moscowreached 13.6% by the third quarter of 2016, thehighest since 2009. Tough market conditionsalso meant companies with existing facilities inRussia could renegotiate leases on favorableterms, or take advantage of additional capacityin the market. For example, Adidas haspurchased the distribution center in the south ofMoscow that it had previously leased. Adidasacquired the 120,000-square-meter building at arelatively low price from a landlord in need ofcapital.Another successful example is the Russiandivision of the gardening French retailer LeroyMerlin. Their expansion plan involves around20 new store openings every year, and thecompany opened its 59th store in Russia in thefinal days of 2016. The retailer is alsoexpanding its geographical scope. It will openits first store in Khabarovsk, which is 9,000kilometers from Moscow by road. Eric Poulet,director of supply chain at Leroy Merlin inRussia, notes that while the average LeroyMerlin store in France sells around 3.4 millionitems per year, Russian stores sell between 16and 19 million. In France, the company's supplychain moves around 470 million items per year.In Russia, that number is now over 1 billion. Tosupport its network, Leroy Merlin prefers tobuild and run its own distribution facilitieswhere possible. During 2015 and 2016, thea developer tocompany partnered with

Accepted Answer

Currency fluctuations refer to shifts in a nation's value in relation to other currencies, which…