How has the implementation of NAFTA affected Walmart’s success in Mexico?
Wal-Mart did not achieve its goals immediately after investing in Mexico. The retailer encountered numerous challenges, such as poor transportation solutions and increased importation fees. The implementation of NAFTA improved the company’s success. NAFTA reduced the costs incurred whenever importing various products. The decrease in importation costs supported the company’s business strategy. Wal-Mart reduced its prices in order to attract more customers. The leading retailer became successful in the Mexican market. NAFTA lifted every tariff affecting the American retailer. The approach affected different retailers in the country. The move leveled the ground for Wal-Mart.
How much of Walmart’s success is due to NAFTA, and how much is due to Walmart’s inherent competitive strategy? In other words, could any other U.S. retailer have the same success in Mexico post-NAFTA, or is Walmart a special case?
The success of Wal-Mart in Mexico is unquestionable. This success arises from the implementation of NAFTA and Wal-Mart’s competitive strategy. The case study also explains how Wal-Mart’s inherent business strategy played a major role in its success. Wal-Mart began by reducing its prices. The move inspired many customers to purchase their products from the company. The company also worked with its suppliers in order to reduce business costs. The customers also benefited from the decreasing prices for its products. The company also established a new distribution system in order to reduce its business expenses. Wal-Mart created super warehouses in order to manage its operations. It also acquired a new inventory information system (IIS) to improve its distribution operations. The company’s use of a powerful computer for its operations has also made its strategy successful. The company’s decision to construct new manufacturing plants in the country has made it successful. The above situation explains why a similar U.S. retailer might not achieve similar gains in Mexico.
What have Comerci and Soriana done to remain competitive? What else do you think they need to do to remain competitive in the future?
Comerci and Soriana undertook new strategies in order to remain competitive. The first strategy was the formation of Sinergia. The approach was necessary towards improving the collaboration and purchasing power of the companies. The retailers also reduced their prices for different products. Such practices have been critical to the success of these retailers. The companies can also open new stores and produce their own products in order to address the needs of every Mexican. The companies should manufacture new products in order to become competitive. The firms should also merge in order to become more competitive. The competitors can also reconsider their business strategies in order to succeed. They can also hire new managers who understand the changes in the sector. The companies can also invest in Central America in order to increase their sales. The strategy will attract more customers and eventually become profitable. Such practices will make these firms competitive and successful in the future.
What do you think of Walmart’s strategy in Mexico and Central America, and how have bilateral agreements and geographic proximity played a role in their success? What challenges do you think Walmart de Mexico e Centramerica will face as it continues to expand in Mexico and Central America?
Wal-Mart’s strategy in Central America and Mexico has been successful. The company seems to understand the needs and expectations of every Hispanic consumer. The bilateral agreements have also supported the company’s strategy. The geographic proximity of the company has made it possible to acquire new products and commodities from different suppliers and manufacturers. The company’s distribution channels (DCs) can address the needs of every geographic location. Wal-Mart decided to market its products in many countries across Central America. The company’s multi-format operations also addressed the needs of every customer. Wal-Mart de Mexico e Centramerica will succeed in the future. One challenge that might affect Wal-Mart in the future is its inability to deal with competition. The company has tried to increase its dominance in Central America and Mexico. The company might also lose touch with its marketing and business strategy. The decision to expand in Central America should consider the dangers of competition. The company might also lose its grip and become less competitive.