Premium Essay

Wallmart in Mexico

In:

Submitted By bdguru
Words 2139
Pages 9
Read the case study “Wal-Mart Goes South” below and respond to the following questions: 1. How much of Wal-Mart’s success is due to NAFTA, and how much is due to Wal-Mart’s inherent competitive strategy? 2. How has the implementation of NAFTA affected Wal-Mart’s success in Mexico? 3. Faced with going out of business, what steps did Comerci take to remain competitive? What other steps do you think Comerci should take to secure its future and further compete with Wal-Mart’s operations in Mexico?
APA format is required for text citations and references. You are expected to support your answer with:
(1) the textbook “International business environments and operations (twelfth edition), Daniels, J. D., Radebaugh, L. H., & Sullivan, D. P. (2009). New Jersey, NJ: Pearson Education, Inc.”, and
(2) news articles, internet articles, and academic source.

WAL-MART GOES SOUTH
Comercial Mexicana S.A. (Comerci), one of Mexico’s largest retail chains, is faced with a serious dilemma. Since Wal-Mart’s aggressive entry into the Mexican retail market, Comerci has found it increasingly difficult to remain competitive. Wal-Mart’s strong operating presence and low prices since NAFTA’s lifting of tariffs have put pressure on Comerci, and now management must determine if Comerci’s recent participation with the purchasing consortium Sinergia will be sufficient to compete against Wal-Mart.
What’s caused this intense competitive pressure on Comerci, and what is likely to be its future? Mexico’s retail sector has benefited greatly from the increasing trade liberation the government has been pushing. After decades of protectionism, Mexico joined GATT in 1986 to help open its economy to new markets. In 1990, with Mexico’s economy’s on the upswing and additional free trade negotiations with Canada and the United States taking place, the founder of Wal-Mart, Sam Walton,

Similar Documents

Free Essay

Business Strategy

...The following are barriers to entry the Fruit Juice Industry in Nigeria: As consumer goods, competitive advantage could only be gained with scale economies in research, Marketing, production and Marketing, hence it required huge capital outlay for new entrants. Brand identity and products differentiation forces entrants to spend heavily on campaigns to overcome customer loyalty. The leaders in the sector, namely 5 Alive,Chi limited and Fumman spent between 20-25% of gross income running running into millions of Naira in advertising every year to project the their brands. Due to the restriction of the Federal Government on import of Concentrates in 2013, the capital requirement for new entrants sky-rocked due to investment required in agro-allied industries for supply of raw materials. The learning curve period required to remain competitive could allow the competition readjust and kill the new entrants in their formative stage. Also, lack of adequate anti-trust law allows the big players to crush any start-up company. The effective distribution networks of the big players which also supply other products like Bottled Water, Soft Drink etc make the entry of new player difficult and uncompetitive, as a result most of the start-up firms quickly went underground. The bargaining power of suppliers The big juice companies in Nigeria have bargaining power over their suppliers, because they demand tons of product and these allow them to pay lower prices and have volume discounts...

Words: 1146 - Pages: 5

Free Essay

Walmart

...A.: Algemene gegevens over de organisatie en haar omgeving A 1: Gegevens m.b.t. de externe omgeving van de organisatie: a) Gegevens m.b.t. de concurrentieomgeving van de organisatie Wal-Mart is de werelds grootste detailhandelsconcern. Dit maakt Wal-Mart sterker staat dan haar concurrenten. De concurrenten van Wal-mart Stores, Inc. (Wal-Mart) zijn primair warenhuizen, supermarkten, zoals Target, Kmart, Circuit City and Bed, Bath, and Beyond. Volgens een onderzoek is Wal-Mart het meest gewild bij een groot deel van de comsumenten. Dit komt door hun lage prijzen, ruime assortiment en goed kwaliteit. Ook ziet Wal-Mart erop toe dat zij continu inspelen op de vraag van haar klanten. b) Gegevens m.b.t. de economische conjunctuur De economische conjuctuur heeft te maken met de elementen die op een gegeven ogenblik de economische situatie uitmaken van een sector, een bedrijfstak, een streek of een land. De verkopen van Wal-Mart zijn gestegen, dankzij de goede conjunctuur. c) Gegevens m.b.t. politieke factoren, vakbondsinvloeden en relevante wetgeving Het is voor elk bedrijf belangrijk om op de hoogte te zijn over de politieke factoren en wet-en regelgeving. Voor Wal-Mart is dit dus ook belangrijk en vooral hoe Wal-Mart internationaal opereert. Dit maakt dat Wal-Mart op de hoogte moet zijn van de in die land geldende wet- en regelgeving. A 2: Gegevens m.b.t. de interne omgeving van de organisatie: a) Gegevens m.b.t. de doelen van de organisatie op...

Words: 1375 - Pages: 6

Premium Essay

Walmart’s Expansion in Africa: a New Exploration Strategy

...Perspectives on International Trade and Finance Assessment 2 – Individual Case Analysis Case Analysis Walmart’s Expansion in Africa: A New Exploration Strategy Submitted by: Pharin Chhodarangsey (Kevin) 001MG715 Date of Submission: November 4th, 2015 Submitted to: Dr. Rachaniphorn Ngotngamwong 1 Table of Contents I. Introduction 3 I. 1 Company Background 3 II. Case Analysis 3 1. Detail the growth of Walmart and its international experience. 3 2. Describe the growth strategies of Massmart in the African Continent. 5 3. Detail Walmart’s acquisition of Massmart and expected strategic advantages.5 4. Analyses the challenges Walmart have to face in the African Continent. 6 5. What happened to Walmart’s operations after taking 51% share in Massmart in 2011? 7 References 2 I. Introduction I. 1 Company Background Walmart Stores, Inc., is an American multinational retail corporation that operates a chain of discount department stores and warehouse stores. Headquartered in Bentonville, Arkansas, United States, the company was founded by Sam Walton in 1962 and incorporated on October 31, 1969. (Winston-Salem Journal, 2010) From the humble beginnings as a small discount retailer in Rogers, Ark., Walmart has opened thousands of stores in the United States and expanded internationally. Through the model of business global expansion, which brings the right store...

Words: 1756 - Pages: 8

Premium Essay

Walmart

...Walmart: Global Strategic Expansion - Executive Summary Since introducing its first international store in 1991, Walmart has transformed itself from an American retail giant into a global one, leveraging a wealth of resources to strategically expand operations. Although Walmart must contend with several formidable competitors, the retailer has successfully opened thousands of stores across the globe; most frequently, it has added international units through the acquisition of foreign retailers, which simultaneously reduces its competition and furthers its dominance. Walmart has differentiated itself by coupling its understanding of political, economic, legal, and cultural systems within target markets with its low-cost, high-quality approach to mass retail. Utilizing simultaneous strategic multiple thrusts, Walmart has developed layers of competitive advantage to establish itself as the world’s leading retailer. Focusing on strategic expansion, Walmart currently operates 9,826 stores across twenty-eight countries, allowing it to capture global scale efficiencies by creating a coordinated and integrated network of interdependent stores. Each unit within its network is regarded as a source of ideas and capabilities, and innovation is diffused across the company through initiatives such as a market-by-market training program that helps increase the company’s responsiveness to local demands and preferences. Thus, Walmart has established itself as a transnational corporation by developing...

Words: 5506 - Pages: 23

Premium Essay

Walmart

...according to the Forbes Global 2000 for that year.[6] The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, and publicly traded on the New York Stock Exchange in 1972. Wal-Mart, headquartered in Bentonville, Arkansas, is the largest majority private employer[7] and the largest grocery retailer in the United States. In 2009, it generated 51% of its US$258 billion sales in the U.S. from grocery business.[8] It also owns and operates the Sam's Club retail warehouses in North America. Wal-Mart has 8,500 stores in 15 countries, with 55 different names.[9] The company operates under its own name in the United States, including the 50 states. It also operates under its own name in Puerto Rico. Wal-Mart operates in Mexico as Walmex, in the United Kingdom as Asda ("Asda Wal-Mart" in some branches), in Japan as Seiyu, and in India as Best Price. It has wholly owned operations in Argentina, Brazil, and Canada. Wal-Mart's investments outside North America have had mixed results: its operations in the United Kingdom, South America and China are highly successful, while it was forced to pull out of Germany and South Korea when ventures there were unsuccessful. The Wal-Mart greeting was the original method used by the giant retailer to show customers that they are appreciated. A greeter at the door thanks customers for coming in, assists with a shopping cart, and provides a "goodbye thank you" upon departing the store. The friendly senior citizen dressed in the...

Words: 4579 - Pages: 19

Premium Essay

Essays on Mba

...competitive advantage? Explain. The retail biggest giant, retail supermarket chain “Walmart” serves customers and members more than 200 million times per week at more than 10,130 retail units under 69 different banners in 27 countries. With fiscal year 2012 sales of $443 billion, Walmart employs 2.2 million associates worldwide. And the organization is one of the fortune 500 companies. Walmart Stores, Inc., is the world’s largest public corporation by revenue and the largest private employer in the world (about 2.1 million employees in 2008). In 2008, the company operated about 4,000 stores in the United States (discount, supercenters, neighborhood markets, and Sam’s Clubs) as well as more than 2,200 stores in other countries, mostly in Mexico, Canada, Brazil, and the United Kingdom. Its revenue exceeded $400 billion, with net income of about $15 billion. Sam Walton said it best, “If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life. During the initial years, Walton focused on establishing new stores in small towns, with an average population of 5,000. These towns were largely neglected by leading retailers like Sears Roebuck & Company, K-Mart and Woolco, which concentrated more on larger towns and big cities. In his efforts to attract people from the rural areas to his stores, Walton introduced the concept of everyday low prices (EDLP). EDLP promised Walmart's customers...

Words: 14036 - Pages: 57

Premium Essay

Unethical Business Practices of Walmart

...UNETHICAL BUSINESS PRACTICES OF WALLMART AND NIKE INTRODUCTION Wal-Mart Stores, Inc., branded as  Walmart is an American multinational retail corporation that runs chains of large discount department stores and warehouse stores. The company is the world's second largest public corporation, according to the Fortune Global 500 list in 2013, the biggest private employer in the world with over two million employees, and is the largest retailer in the world. Walmart remains a family-owned business, as the company is controlled by the Walton family, who own a 48 percent stake in Walmart. It is also one of the world’s most valuable companies. The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, and publicly traded on the New York Stock Exchange in 1972. It is headquartered in Bentonville, Arkansas. Walmart is also the largest grocery retailer in the United States. In 2009, it generated 51 percent of its US$258 billion sales in the U.S. from grocery business. It also owns and operates the Sam's Club retail warehouses in North America. In the late 1980s and early 1990s the company rose from a regional to national giant. By 1988, Wal-Mart was the most profitable retailer in the US and by October 1989 it had become the largest in terms of revenue. Geographically limited to the South and Lower Midwest up to the mid 1980s,...

Words: 5418 - Pages: 22

Premium Essay

The Sustainable Supplychain of Wal Mart

...The Sustainable SCM of Wal-Mart Group Work - Fall 2013 Global Supply Chain Management Common Assumptions • The categories chosen are Seafood and Electronics. • The market considered into the analysis is the U.S. market. • Every change in the supply chain has to be considered in a sustainable and profitable perspective. • The suppliers that are not compliant with Wal-Mart’s directive on sustainability are substituted after a short-medium time. • A Central Warehouse in the U.S. is not considered for both chains, because we assume that a system of cross docking takes care of the incoming goods from the arrival point in the U.S.A. if the good is imported. • We consider in the U.S.A territory five central warehouse that have a direct contact with all the Wall-Mart stores according to their geographical position. Seafood supply chain Electronic supply chain Assumptions The assumptions needed in order to analyze the seafood supply chain for Wal-Mart are the following:  Our import market is the USA market and the export is the Thai one. Thailand, in fact, is one of the major exporter of the seafood category that we will consider: salmon.  Wal-Mart fishes demand is similar to the American demand composition in terms of the quantity and the quality of the products.  In our analysis we will consider as “producers” (first level of the supply chain) only the fishermen and not the fish farmers  We considered only pre-frozen fish, that will be sold...

Words: 6755 - Pages: 28

Free Essay

Summary International Marketing

...Samenvatting_IM.pdf Samenvatting International Marketing: college(s)2011/2012 Tilburg University | Marketing Management | International Marketing Verspreiden niet toegestaan | Gedownload door: Jolien De Klerk | E-mail: joliendeklerk@hotmail.com SAMENVATTING INTERNATIONAL MARKETING 2011/2012 Week 1: Introduction to global marketing Marketing = an organization function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. Global marketing = focus with recourses and competencies on global market opportunities and threats. The difference is de scope of activities. A global company conducts important activities outside the home-country market. Deze globalisatie activiteiten kunnen met alle groeistrategieën plaatsvinden: Companies that understand and engage in global marketing can offer more overall value to consumers than companies that do not have that understanding. The discipline of marketing is universal. It is natural however that marketing practices will vary per country, for the simple reason that the countries and peoples of the world are different (preferences, competitors, channels and communication media). The differences mean that a marketing approach that has proven successful in 1 country doesn’t mean that this will work in another country. An important thing is to recognize the extent to which it is possible to extend marketing...

Words: 18459 - Pages: 74