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    Rajan Sharma 48-MBA-19 Global Business Operations

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    Walmart's success in Mexico was due to both NAFTA and its own competitive strategies. [1] NAFTA helped reduce import charges and tariffs, allowing Walmart to offer lower prices. [2] However, Walmart's scale, efficient distribution system, and ability to negotiate strong supplier deals also provided advantages. [3] Local Mexican retailers like Comerci could have competed more effectively without NAFTA, but likely still would not have matched Walmart's operational strengths.

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    Rajan Sharma 48-MBA-19 Global Business Operations

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    Arj Sharma
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    Walmart's success in Mexico was due to both NAFTA and its own competitive strategies. [1] NAFTA helped reduce import charges and tariffs, allowing Walmart to offer lower prices. [2] However, Walmart's scale, efficient distribution system, and ability to negotiate strong supplier deals also provided advantages. [3] Local Mexican retailers like Comerci could have competed more effectively without NAFTA, but likely still would not have matched Walmart's operational strengths.

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    Walmart's success in Mexico was due to both NAFTA and its own competitive strategies. [1] NAFTA helped reduce import charges and tariffs, allowing Walmart to offer lower prices. [2] However, Walmart's scale, efficient distribution system, and ability to negotiate strong supplier deals also provided advantages. [3] Local Mexican retailers like Comerci could have competed more effectively without NAFTA, but likely still would not have matched Walmart's operational strengths.

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    41 views2 pages

    Rajan Sharma 48-MBA-19 Global Business Operations

    Uploaded by

    Arj Sharma
    Walmart's success in Mexico was due to both NAFTA and its own competitive strategies. [1] NAFTA helped reduce import charges and tariffs, allowing Walmart to offer lower prices. [2] However, Walmart's scale, efficient distribution system, and ability to negotiate strong supplier deals also provided advantages. [3] Local Mexican retailers like Comerci could have competed more effectively without NAFTA, but likely still would not have matched Walmart's operational strengths.

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    RAJAN SHARMA

    48-MBA-19
    GLOBAL BUSINESS OPERATIONS

    Question- 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-NAFTE, or is Walmart a special case?

    Answer- Walmart was known for its slogan in USA which was everyday low price, which
    was the reason for problems faced by Walmart with its working in Mexico before NAFTA
    came. One of the main reason for the problem was the importing charges faced by the
    company because of which company was not able to sold good/ offer goods to customers at
    affordable prices, which is how they like to represent their brand. Although NAFTA would
    have helped any company which was willing to work in the foreign country the strategic
    skills and policies of the Walmart also played a big role. The company is best and is leading
    in the case of offering most competitive prices with large power to deal in negotiation.

    Walmart distribution system was also very good and helped them in reducing the expenses.
    They also spent a lot on making centralised warehouses and had second most powerful
    system to run logistics in smooth manner. I believe local Mexican companies like comerci
    would have been a great competition for Walmart if NAFTA had not come but in case of
    other U.S retailer entering Mexico post NAFTE would probably not have been so successful
    as Walmart is due to the kind of technology skills and strategies that Walmart used would not
    have been in their arsenal.

    Question- What can a local retailer like comerci do to compete against Walmart?

    Answer- Various steps can be taken by the local retailers like Comerci in order to compete
    against big retailers like Walmart can be enlisted as below:
    1. Companies like Comerci can make purchase partnership with other local companies
    to buy the product in the bulk from the supplier by negotiating.
    2. Local retailers can also develop relationship with customers and provide them with
    the loyalty benefit cards and coupons making them more desirable to the customers.
    3. The govt. help can also be taken by the local retailers so that the monopoly
    atmosphere doesn’t get created.
    4. Selection of many suppliers and choosing one which provide best rate in the market.
    5. The last option that companies can do is merging so as to fight and compete with
    brand like Walmart.

    Question- How can NAFTA be beneficial to suppliers of Walmart?

    Answer- The implementation of NAFTA has helped Walmart as well as its suppliers a lot.
    Rules of NAFTA affected Walmart’s success in various ways some of which can be enlisted
    as bellows:
    1. With implementation of NAFTA companies start building there manufacturing plants
    In the Mexico itself so supplier were able to produce products in Mexico itself which
    was lot cheaper and also favourable for Walmart as the company was able to get
    product at the better price
    2. NAFTA also allowed foreign investment in the Mexico which led to Walmart being
    able to build its manufacturing plant in Mexico with cheap labour.
    3. NAFTA also reduced the tariff from 10% to 3% on American good sold in Mexico
    which helped Walmart suppliers a lot.
    4. NAFTA also influenced Mexico in improving the transportation infrastructure which
    lead to solution to the logistic problem of the suppliers of Walmart.
    5. Lowered import charges also helped Walmart suppliers to lower the rate which led to
    Walmart selling customers at lower prices too.

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