Walmart de Mexico - 1591 Words

Wal-Mart de Mexico Comercial Mexicana S.A. (Comerci), one of Mexicos largest retail chains, was faced with a serious dilemma. Since Wal-Marts aggressive entry into the Mexican retail market, Comerci has found it increasingly difficult to remain competitive. Wal-Marts strong operating presence and low prices since NAFTAs lifting of tariffs have put pressure on Comerci, and now management must decide if it can improve Comercis competitive position by remaining independent or by merging with either a local or foreign retailer. Which raises one question that needs to be answered: What has caused this intense competitive pressure on Comerci, and what is likely to be its future? Mexicos retail sector has benefited greatly from the†¦show more content†¦Wal-Mart has also come across logistics problems due to poor roads and the scarcity of delivery trucks. Yet another problem was the culture clashes between the Arkansas executive and the Mexican managers. Some of these problems were solved by trial an d error, but the emergence of the North American Free Trade Agreement in 1994 helped solve most of the problems. Among other things, NAFTA reduced tariffs on American goods sold to Mexico from 10 percent to 3 percent. Prior to NAFTA, Wal-Mart was not much of a threat to companies like Comerci, Gigante, and Soriana, Mexicos top retailers. But once the agreement was signed, the barriers fell and Wal-Mart was on a level playing field with its competitors which was all it needed to become number one. NAFTA encouraged Mexico to improve its transportation infrastructure, thus helping to solve Wal-Marts logistical problems. The signing of NAFTA also opened wider gates to foreign investment in Mexico. Wal-Mart was paying huge import fees on goods shipped to Mexican areas like Europe and Asia. Foreign companies knew that if they built manufacturing plants in Mexico, they could keep costs low with Mexican labor but ship to NAFTAs free trade zone, Mexico, the United States, or Canada. As compa nies began to build manufacturing plants, in Mexico, Wal-Mart could buy these products without paying the high import tariffs. An example of this tactic is Sonys flat-screen television line, Wega. Sams Clubs in Mexico importedShow MoreRelatedWalmart De Mexico Essays1467 Words   |  6 PagesWal-Mart de Mexico Comercial Mexicana S.A. (Comerci), one of Mexicos largest retail chains, was faced with a serious dilemma. Since Wal-Marts aggressive entry into the Mexican retail market, Comerci has found it increasingly difficult to remain competitive. Wal-Marts strong operating presence and low prices since NAFTAs lifting of tariffs have put pressure on Comerci, and now management must decide if it can improve Comercis competitive position by remaining independent or by merging withRead MoreThe Walmart de Mexico Scandal Essay1147 Words   |  5 PagesSam Walton founded the well-known retail store Wal-Mart, dedicated to make a difference in the lives of their customers by offering everyday low prices. (Walmart, 2014). Despite their effort trying to save people money, Wal-Mart has been caught up in some scandals, which has given the company a bad reputation. In 2005 Wal-Mart paid bribes in Mexico to win market dominance and to speed up building permits. It is said that it is difficult to get all the permits needed to open a business without payingRead MoreWalmart de Mexicos Bribery Issue668 Words   |  3 PagesIt’s seemingly that Walmart de Mexico bribery scandal is far from over. 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As they began to go international, there were many critics saying theyRead MoreWalmart : An Dominant End Multinational Corporation865 Words   |  4 PagesCorporation put a side their moral and ethical standards. For example, Walmart is a multination corporation they have more than 11,098 retail units in 27 countries (Walmart Corporation). But when Walmart was expending to Mexico, their primary focus was to maximize profit and beat its competition (Barstow). Their Walmart de Mexico was the most profitable unite for Walmart Corporation. But when they were planning to set up Walmart in Mexico, to get the permits they bribed mayors and city council members,Read MoreHow Has the Implementation of Nafta Affected Walmart’s Success in Mexico?1000 Words   |  4 Pagessuccess in Mexico? Walmart’s marketing campaign has been â€Å"everyday low prices†. This was not the case in Mexico prior to NAFTA. Walmart was paying higher tariffs to import American goods. Once NAFTA was implemented, Mexico became a free trade zone. This made it possible for Walmart to reduce its tariffs from 10% to 3% creating a level playing field with its competitors. With the signing of NAFTA, it also opened up the doors to foreign investment in Mexico. Walmart was also payingRead MoreWalmart Inc. : An American Multinational Retail Corporation Essay992 Words   |  4 PagesOverview: Walmart Inc. is identified as â€Å"an American multinational retail corporation† (Wiki: Walmart) that conducts itself in a multitude of hyper- markets. This includes discount stores and grocery stores. Walmart headquarters is located in Bentonville, Arkansas and was founded by Sam Walton in 1962; it was then incorporated on October 31, 1969. As of the 2016 year, Walmart has obtained a total of 11,573 stores and clubs located in 28 different countries. While also, operating as Walmart under 63Read MoreSears, Roebuck and Co. vs. Wal-Mart Stores, Inc. Essays1615 Words   |  7 PagesLorena Guadalupe San Salvador, 12 de julio de 2010. Sears, Roebuck and Co. vs. Wal-Mart Stores, Inc. En el presente trabajo se realiza una comparacià ³n entre las empresas SEARS y Walmart a travà ©s de un anà ¡lisis de los Estados Financieros de ambas empresas y sus respectivas razones o à ­ndices. A continuacià ³n se presentan los Estados Financieros de Sears Roebuck and Co. A continuacià ³n se presentan los Estados Financieros de Wal-Mart Stores Inc. Cà ¡lculo de Razones Financieras Para realizarRead MoreWal-Mart’s Foreign Expansion Case Study1361 Words   |  6 Pageswhich would also in turn help Wal-Mart become successful as well. Wal-Mart must also abide by the different regulations of each country. In order to be successful in foreign markets, the merchandising strategy must change. Wal-Mart was successful in Mexico because it joined forces with local companies and eventually took control of them. Their strategy was to enter into joint ventures with the large competitors and gain control of their company. In doing so, it gave them control of the stores, the realRead MoreU.s. Foreign Corrupt Practices Act Of 1977764 Words   |  4 Pagespayment to a foreign official to influence it, secure any advantage or to assist in obtaining or retaining business. The presenting team used the Walmart case as basis for the debate as it is relevant to the issue in question. In April 2012, the NYT reported that the Walmart management in Mexico paid bribes of $24 million and $16 million in â€Å"†donation† to Mexico local government to help expand the business there. In their debate that team chose to explore the possibility of expansion to China while debating