Wal-Mart’s Foreign Expansion
Why do you think Wal-Mart was successful in Mexico?
Initially the retailer hit some headwinds in Mexico. It quickly discovered that shopping habits were different, so Wal-Mart adjusted its strategy to meet the local conditions, hiring local managers who understood Mexico culture, letting those managers control merchandising strategy, building smaller stores that people could walk to, and offering more fresh produce. At the same time, the company believed that it could gradually change the shopping culture in Mexico, educating consumers by showing them the benefits of its American merchandising culture. As it built up its distribution system in Mexico, Wal-Mart is able to lower its own costs, and it passed these on to Mexican consumers in the form of lower prices. To customization, persistence, and low prices paid off. Mexicans started to change their shopping habits. Today Wal-Mart is Mexico’s largest retailer and the country is widely considered to be the company’s most successful foreign venture.
Source: Hill, Charles W. L. International Business. McGraw-Hill, 2012, 9thEdition.
Wal-Mart de México
Wal-Mart de México is the name of the joint-venture between Wal-Mart and Cifra mentioned in the “Wal-Mart’s Foreign Expansion” case. Since the case was written, it has proven to be a profitable project for Wal-Mart. “In 2009, Wal-Mart de México acquired Wal-Mart Centro America, expanding its presence to six countries, and increasing the potential for continuous profitable growth” (Wal-Mart). No doubt this is because Wal-Mart has continued to offer the products the people of Mexico and Central America want in a way that has encouraged sales. The changes the firm made after their initial entrance into Mexico have validated their decision to deviate from their business plan in the United States. The company has had its own impact on the retail industry in Mexico. “Practices introduced by the retailing giant include centralized...
Please join StudyMode to read the full document