Business / A Case Analysis Of The Wal-Mart De Mexico
A Case Analysis Of The Wal-Mart De Mexico
Research Paper A Case Analysis Of The Wal-Mart De Mexico and over other 20 000+ free term papers, essays and research papers examples are available on the website!
Autor: people 19 September 2011
Words: 1612 | Pages: 7
This paper is to provide a case analysis of the Wal-Mart de Mexico and explains how the implementation of NAFTA affected Wal-Mart’s success in Mexico. The paper will tell how much of Wal-Mart’s success is due to NAFTA, and how much was due to Wal-Mart’s inherent competitive strategy. Additionally, this paper will discuss Comercial Mexicana S.A., called Comerci, attempt to remain competitive. Further, the analysis will examine the advantages, challenges and the perspective on the effectiveness of the strategy.
Wal-Mart attained significant growth internationally in countries such as Brazil, Canada, China, Germany, Mexico and Puerto Rico to name a few. Daniel & Sullivan (2007) stated “Wal-Mart achieved incredible success, but struggled in Germany and Argentina” (p. 298). Realizing its weaknesses, the company adapted to the cultures, and learned partnerships strategies. Wal-Mart, known for the slogan “Every Day Low Prices” accounts for 55 percent of the market share in Mexico’s supermarket sector with $11.7 billion in sales and $585 million in profits. In comparison to Comerical Mexicana S.A. known as Comerci, the company realized $3.1 billion in sales and $93 million in profits. Daniel & Sullivan (2007) indicated that “Comerci’s market share dropped 15 percent” (p. 298).
In the case of Wal-Mart de Mexico, Wal-Mart’s aggressive operational approach created many difficulties for Comerci to compete in the retailer market. The difficulties became evident after the signing of the North American Free Trade Agreement (NAFTA); which represented more challenges to the Mexico companies specifically Comerci. Ruiz (2009) indicated that as a result of NAFTA companies became pressured to achieve at higher levels than before, which means being more competitive” (p.51). The signing of NAFTA, objectively eliminated tariff and non-tariff barriers, and created opportunities of expansion for foreign investments to Mexico. Daza & Juarez (2007) noted the signing of the NAFTA determined the structural changes” (p. 32). Those changes extended into Mexico’s improvement of its inadequate infrastructure in areas such as transportation and roads. Consequently, the effect of NAFTA was the outgrowth of Wal-Mart’s dominance in the Mexico retailer market. Wal-Mart strategized and developed its business infrastructure by building manufacturing plants, and utilizing the savings on import tariffs to produce cheaper products. In e ...
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