Wal-Mart de Mexico
Comercial Mexicana S.A. (Comerci), one of Mexico's largest retail chains, was faced with a serious dilemma. Since Wal-Mart's aggressive entry into the Mexican retail market, Comerci has found it increasingly difficult to remain competitive. Wal-Mart's strong operating presence and low prices since NAFTA's lifting of tariffs have put pressure on Comerci, and now management must decide if it can improve Comerci's 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?
Mexico's retail sector has benefited greatly from the increasing trade liberalizing the government has been pushing. After decades of protectionism, Mexico joined GATT in 1986 to help open its economy to new markets. In 1990, with Mexico's economy on the upswing and additional free trade negotiations with United States and Canada taking place, the founder of Wal-Mart, Sam Walton, met with the president of Cifra, Mexico's leading retail store. Their meeting resulted in a 50/50 joint venture in the opening of Mexico's first Sam's Clubs, a subsidiary of Wal-Mart, in 1991 in Mexico City. It only took a couple of months after the opening to prove the store's success. The Mexico City Sam's Club started to brake all of the U.S. records for Sam's Club. The joint venture evolved to incorporate all new stores, and by 1997, Wal-Mart purchased enough shares to have controlling interest in Cifra. In 2000, it changed the name to Wal-Mart de Mexico, S.A. de C.V. and the ticker symbol to WALMEX.
Prior to 1990, Wal-Mart had never made moves to enter Mexico or any c...
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...rs are so angry that they have gone to Mexico's Federal Competition Commission with complaints of unfair pricing practices.
Unable to compete with Wal-Mart using its current strategy, Comerci faces extinction. In 2001, Comerci's sales in new stores fell stores 3.3 percent and Wal-Mart's rose by 5.7 percent. Wal-Mart is the largest retailer in
Mexico and owns about 50 percent of the market share in Mexico's supermarket sector. Comerci can look for possible foreign buyers, like France's Carrefour or it can go to suppliers and make another attempt to get lower prices. The government may give Comerci a break if it rules against Wal-Mart's aggressive pricing. Comerci may continue to lose its customers if it doesn't change something.
Bibliography
www.walmartstores.com
www.wright.edu/~tdung/Walmart_in_mexico
www.shibuimarkets.com/company/walmart_de_mexico
Overall, Carlsen is able to provide a convincing case against Wal-Mart and their latest “step in a phenomenal takeover of Mexico’s supermarket sector.” She conveys multiple rhetoric devices and is able to do so in a relatively short article. Though Laura effectively uses the three primary persuasive appeals logos, pathos, and ethos throughout the piece, her argument is most successful when she takes a more direct approach in reaching her target audience, saying “The dispute is not a battle between past and future. It is a struggle over a country’s right to define itself.” She also states Wal-Mart’s practices interfere with on the country’s “contemporary integrity” by constructing on the ancient site. Her tone, along with her use of various rhetoric appeals, contributes to creating an effective and successful argument.
To begin with, some store history may be helpful. In 1914, Anna Albrecht opened a small store, Albrecht Discount, in the town of Essen, Germany. By 1948, her sons had taken over the business and had expanded it to four locations. In 1962, the store’s name changed from Albrecht Discount to Aldi. In 1976, Aldi makes their debut in the United States, opening a store in Southwestern Iowa. Today, in 2014, Aldi has 1,300 locations in the United States and 4,000 locations worldwide (Aldiuscareers.com). In 1962, Wal-Mart opens in Rogers, Arkansas. In 1983, Sam Walton opened the first Sam’s Club in Midwest City, Oklahoma. By 1988, Walton had opened the first Wal-Mart Supercenter in Washington, Missouri. Wal-Mart went global in 1991, opening a Sam’s Club in Mexico City, Mexico. Today, in 2014, Wal-Mart employs 2.2 million associates, serves 200 million customers, with 11,000 stores in twenty-seven countries (Corporate.walmart.com).
For exemple they had issue to open in Mexico creating multiple problems for the agrofood sector but as well by reducing the foreign investment in the country. This has created a huge scandal all over the news, encountering the human rights of the population living in the area but as well the environmental problems linked to this partnerships with notorious mexicans real estate agent making this opening not really
Wal-mart is currently the world’s largest company. It has seen continuous growth and financial success since it was founded in 1962. Today it is living off of a previous reputation of solid ethical business practices that are no longer being exercised. Sam Walton, the founder of Wal-mart, was considered to be “freakishly cheap… Cost-cutting was an obsession in the Wal-mart culture… on business trips, everyone, including the boss, flew coach, and hotel rooms were always shared.” (reclaimdemocracy.org. 2006). This was only part of the reason for Sam Walton’s success.
Wal-Mart was conceived and founded by Sam Walton in 1962, at Rogers, Arkansas. Sam Walton started with just a few small variety stores, funded with borrowed money. His goal was to provide affordable products to the public to make life easier. After his success with the first few stores, Sam Walton borrowed more money to build more stores, creating the Wal-Mart empire as we see it today. The retail giant proves its stoic presence in our lives with its $401 billion sales for fiscal year 2009.
My objective is to analyze the two retail giants’ methodology to satisfy and maintain customer although that I anticipate Wal-Mart’s to be a better buy than Costco because of the gargantuan scale of Wal-Mart has constructed its commerce on saving the customer Our decision is to invest in Wal-Mart. The choice for Wal-Mart is on the basis that their functional-level strategy is really robust, nevertheless of the fact that they do not treat their employees well. The fact remains that they are financially stronger, have a better business-level strategy, and have a corporate-level strategy than Costco. Costco v. Wal-Mart: What must we learn about them?
Wal-Mart was able to enter the international market by opening Club Aurrera in Mexico City in 1991 and a Wal-Mart store in Puerto Rico the following year. On April 5, 1992, Sam Walton passed away, and was succeeded by his eldest son, S. Robson Walton, as Chairman of the corporate board of directors. In 1996, Wal-Mart Stores, Inc. began trading on the Toronto Stock Exchange (TSE). The following year, the company replaced Woolworth on the Dow Jones Industrial Average. Also, this same year, the company had its first $100 billion sales year, with sales totaling $118.1 billion.
Wal-Mart is one of the world's greatest assets to most people. It provides consumer's a place they can go to virtually get anything they need from, car repairs, to groceries, prescription's, even the latest toys and electronics. With all that said, this paper relates to the different forces in business that affects business: competitive, economic, political + legal + regulatory, technological, cultural + social, demographic, and natural forces. Although there are technically seven we are going to focus on competitive, political, technological, and natural forces.
In the warehouse segment, Wal-Mart’s Sam’s Club competes harshly with Costco. Costco has fewer warehouses but greater sales and revenues. Costco customers also shop at Costco more frequently than Sam’s Club customers and, on average, spend more each visit as well. Costco’s dominance may be the result of better innovation. Costco offers luxury items and was the first to sell fresh meat and produce, and gasoline. This is important because innovation is a key factor in assessing competitors in an industry.
Ethics are moral principles that can be used to help guide peoples decisions. We are all different and therefore our beliefs and opinions differ. There are many ethical theories, and according to Panza and Potthast (n.d.) the following are some that are widely used. Virtue ethics is one theory which states that personality is the most important thing. Living an ethical life, acting right, requires that one develops and demonstrates the quality of courage, compassion, wisdom, and temperance. It also requires that greed, jealousy, and selfishness is avoided. Utilitarianism states that the amount of happiness and suffering created by a person’s actions is what matters the most. As a result, acting rightly includes maximizing the amount of happiness and minimizing the amount of suffering around you. At times you may need to break some of the traditional moral rules to achieve such an outcome. Kantianism is another theory which highlights the principles behind actions rather than an actions results. It states that it requires to be motivated by good principles that treats everyone with respect. If you’re motivated by good principles, you overcome your animal instinct and act ethically. Another ethical theory is the Contract theory, which suggest that ethics should be thought of as terms of agreements between people. It suggests that doing the right thing means obeying agreements set by members rather than those of society. For this theory ethics isn’t necessarily about character, consequences, or principles. The last theory I’m going to mention is Care ethics. Care ethics focuses on ethical attention on relationships before other factors. As a result, acting rightly involves building, strengthening, and maintaining strong relationship...
The Wal-mart is the largest retail chain in United States and in the world. The wal-mart was founded in the year 1962 by Mr Sam Walton. It was originally named as Wal-Mart discount city in Rogers, Arkansas. At the time when the Wal-Mart stores started in the year 1962 it was focused only in small rural cites and town which had a population of 5000 to 25000. It was soon increased to 18 stores in 1969. In the next 30 years it had more than 4750 stores across 50 states in USA and 9 countries with $245 billion sales. It started its international operations in Mexico in the year 1991 and then it expanded it to different countries across Europe and Asia.
Wal-Mart began operations in 1964 and has since become the world leader in retail. Walmart began with goals to provide consumers with goods when and where they wanted them (Frank, n. d). Walmart developed cost structures to allow its company to offer consumers everyday low pricing. Walmart’s corporate mission focuses on a global growth strategy through concentrated integration. Wal-Mart's supply chain management supports a fast and responsive logistics system. In this paper, I will converse about the history of Walmart, and its supply chain management
In 1945, Sam Walton opened his first variety store and in 1962, he opened his first Wal-Mart Discount City in Rogers, Arkansas. Now, Wal-Mart is expected to exceed “$200 billion a year in sales by 2002 (with current figures of) more than 100 million shoppers a week…(and as of 1999) it became the first (private-sector) company in the world to have more than one million employees.” Why? One reason is that Wal-Mart has continued “to lead the way in adopting cutting-edge technology to track how people shop, and to buy and deliver goods more efficiently and cheaply than any other rival.” Many examples exist throughout Wal-Mart’s history including its use of networks, satellite communication, UPC/barcode adoption and more. Much of the technology that was utilized helped Sam Walton more efficiently track what he originally noted on yellow legal pads. From the very beginning, he wanted to know what the customers purchased, what inventory was selling and what stock was not selling. Wal-Mart now “tracks on an almost instantaneous basis the ordering, shipment, and delivery of literally every item it sells, and that it requires its suppliers to hook into the system, enabling it to track most goods every step of the way from the time they’re made and packaged in the factories to when they’re carried out store doors by shoppers.” “Wal-Mart operates the world’s most powerful corporate computing system, with a capacity (as of late 1999) of more than 100 terabytes of data (A terabyte is 1,000 gigabytes, or roughly the equivalent of 250 million pages of text.).
The first Wal-Mart store opened in July of 1962 in Rogers, Arkansas by Sam Walton who believed that the future of retailing was in discounting and to avoid competing with established giants like Sears and Woolworth, Wal-Mart’s stated out of the large cities in the beginning and this strategy help avoid competition, while in rural areas Wal-Mart began growing their customer base by offering ways to save money and shorter travel distance, Sam Walton felt the best way to make customers happy was to provide the low prices every day (Farhoomand, 2006). The company needed to continually find ways to control the operating costs so the savings would then be passed on to Wal-Mart customers in the form of lower prices than the competitors. Walton was opposed to having any kind of employee unions for its company and saw them as a disruption and an inconvenience (Farhoomand, 2006). The continued search for lower prices made him aware of business related travel cost, Wal-Mart executives stayed in low cost hotels when they traveled and the cost related to the services provided by suppliers, Wal-Mart helped suppliers improve operations and efficiency to produce lower cost. Walton wanted the suppliers to correct any nonessential or insufficiencies existing in their business structures as a way of gaining lower prices and higher value products for its Wal-Mart stores. To further push savings Wal-Mart forced cost down by eliminating the middleman and buying directly from the manufacturers. This cost saving also applied to executive salaries Walton felt providing employees with stock options, training opportunities, and allow employees to grow and develop would be a better way to engage and involve them in his vision (Farhoomand, 2006).
In the Grocery industry today there are 4 major companies that dominate the United States market share; Kroger, Safeway, Super value and Publix. With the competitive advantage of being the largest stores in the industry these retail giants should have competition at a minimum and should be thriving (Farfan, US Largest Retail Supermarkets - Complete List). The application of Porter’s Five Forces that influence an industry shows that these retailers do have many advantages but being vulnerable in even one of the areas can make a significant difference in market share and profitability.