Case Study of Walmart Goes South Analysis

How has the implementation of NAFTA yarn-dyeed Walmarts advantage in Mexico?The North American Free Trade created in 1994 affected Wal -Marts victor in Mexico in three proper(postnominal) ways. Wal-Mart had a marketing campaign where it offered Every Day Low Prices, provided this was not quite true in Mexico because it had significant import charges on many of the products brought from the U.S. After the implementation of NAFTA, Mexico became a free trade z unrivalled. This make it possible for Wal- Mart to reduce its tariff from 10% to 3 %. This direct the government to solve the logistical problem repayable to the fact that Mexicos transportation system was be embarrassed average.NAFTA encourages Mexico to improve the transportation system, which demoralises the logistical cost. Additionally, NAFTA allows remote investment in Mexico. As a result,Wal-Mart was able to build manufacturing plants in Mexico because of the cheap labor. In this particular case we can observe how low labor cost contributes to obtain low import tariffs therefore leads to cheaper products. Wal-Marts supremacy in Mexico was definitely possible because of the NAFTA implementation.Question 2How much of Walmarts success is due to NAFTA, and how much is due to Walmart,s inherent private-enterprise(a) strategy? In other words, could any other U.S retailer stool the same success in Mexico post-NAFTE, or is Walmart a special case?NAFTA benefits every alliance that is willing to operate abroad. This agreement solved some difficulties but Wal-Marts inherent competitive strategy was effective in the Mexican Market. As we all know Wal-Marts strategy to win against its rivals is its offered termss. The company is considered drawing card in the market because it has the capability to offer the lowest prices for this reason Wal-Mart is considered to assume a large negotiating power.They can negotiate with providers to drop prices and consequently lower prices. In my opinion NAFTA benef its plus Wal-Marts purchasing power was the compounding that allowed the company to be boffo. Wal-Mart uses time inventory system which allows them to keep master of what they need and communicate this to their providers. Wal- Marts purchasing power is not available in other companies therefore if competitors any to survive they should repugn against the companies prices or change the type of business.Question 3What Have Comerci and Sorina done to remain competitive?What else do you thinks they need to do remain competitive in the in store(predicate)?Comerci and Soriana form a purchasing consortium that would allow them to negotiate founder bulk price from suppliers. Comerci set forth by opening new stores. pull in into several strategic alliances including with Wallmarts major competitor inUS. Soriana bought Gigante supermarket grasp and gain greater purchasing efficiencies for its larger network of supermarkets.Upgrading the supply arrange and distribution channel system , reducing the using of warehouse that can tighten cost of operation and logistic. Developing a strong relationship with supplier could make a comerci and soriana get a exclusive right of supplier , much(prenominal) as extra tenure on short confines credit, lower rate on short term credit, lower price of product and so on. Create customer loyalty benefit, such perk card or coupon, this action could make the customer loyal to comerci or soriana. Multiple source advantage, by doing this comerci and soriana could get more choice in choosing the supplier, which one could give a better rate and good service. manse for government intervention in avoiding a monopoly player in the market, such as impose a regulation on floor price.Question 4What do you think of Walmarts strategy in Mexico and exchange America, and how have zygomorphous agreements and geographic proximity played a role in their success?What challenges do you think Walmart de Mexico e Centrameca will face as it continue s to expand in Mexico and Central America?Walmart in Mexico penetrated the market with a pin venture with its local player. This joint venture helped Walmart gain better intimacy of the Mexican market and supplied Walmart with supplier connections, knowledge about the local finish as well as helping Walmart to work with local authorities. This ensured successful expansion of Walmarts power in the Mexican markets, gaining the greatest influence in the shortest time period.Bilateral agreement and geographic proximity played a roled in wallmart success interm of gain and access into more product and suppliers. Also have a better coordinate the network of 14 distribution centers in mexico and 11 central America, locating Wallmarts strategically throughout the region.Apart from it, Wallmart alike established multiformat operations approach in the region to address contrasting consumer segment. In future, the challenges that may faces by Wallmart in expanding their market in Mexico a nd Central market is, maybe the changes or a new policy on tariff that maybe impose to certain core product of wallmart that could affect the price of wallmartproduct. Labour cost increase also could be one of the major problem that could affect on wallmart operation cost. The growth of the competitor can made a sale on wallmart affect due to market share penetration by competitor.