[국제경영] Wal-Mart de Mexico
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- 2010.01.29 / 2019.12.24
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Case Analysis
Wal-Mart de Mexico
Wal-Mart de Mexico
Rise of New Imperialist and the Counter Attack from the Colonized
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However, there seems to be also some losers in Mexico who were crucially disadvantaged from the rise of this giant company. The Mexican retail chains, originally the leading ones in their home country, began to face serious dilemma. They just could not compete with Wal-Mart because of such a huge price gap between the two competing firms. Wal-Mart’s negotiating potentials with its suppliers was so influential that they could almost always get better deal than any other competitors.
The traditional Mexican retail chains took such rapid expansion of Wal-Mart quite seriously. They tried to reduce their price as well, but eventually failed to do so. They needed some new, differentiated strategies to apply. From this perspective, the year 2004 was a beginning of a new attempt for Mexican retail shops to bring changes. Comerci, one of the largest Mexican retail chains, has band with two of its competitors, Soriana and Gigante, and formed a purchasing consortium so that they could gain more powers to negotiate better prices from suppliers. The name of the new group was, Sinergia, a Spanish word meaning “Synergy”. Many suppliers, however, didn’t welcome the rise of this new group, being afraid of their powerful potentials to force unreasonably low prices.
There were also some movements to differentiate themselves from Wal-Mart. They tried to target middle class Mexicans, which was the strategy actually being done by its partner, Soriana, even before. It is their home country that they are competing against. They should know their culture and preferences of their people better than any other foreign firms. In this sense, the traditional Mexican retail shops tried to adapt new strategies to make “Mexican-styled” products and structures.
Such movement was a nice try, but is not making a great progress yet. Therefore we thought of four other suggestions for those traditional Mexican retail shops can possibly apply in a real world.
1. Using the Legal Environment - Carrefour, one of the largest retail shops originated in France, manages a huge retail stores called hypermarket. It is approximately seven times larger than that of typical Korean supermarkets we can think of. This hypermarket is composed of both department stores and retail stores combined. It accounts for the largest portion of Carrefour’s sales. Relatively similar to Carrefour, Mexico also has some huge town centers called “Plaza” where restaurants and many types of stores are located. If local retailers build their stores beside them, they would be able to attract more people. Since such town centers are often built by the country, local companies can make hypermarkets with nearly no additional cost. This may be quite strategic since foreign companies like Wal-Mart cannot easily acquire the rights to be built beside it. Such type of stores usually tends to attract many of those middle class Mexicans since its traditional atmosphere fits with them well. Not only they can come to shop, but also go to a restaurant, cafe, or watch movies.
2. Niche Marketing - The NAFTA has also increased the labor trade between the US and Mexico to become more activated. Approximately 11.5 million Mexicans have moved to live in the US and many more people travel or live to work in there. 25 millions are descendants of Mexican heritage. It accounts for 10% of the US total population. This implies the great market potentials, or the niche market, of Mexicans. But since the Wal-Mart in the US was targeted for the US citizens, it could not adjust to its Mexican customers. For example, local US stores sell Mexican foods at ethic food aisle. They sell many products (peanut butter, cranberry, etc) which Mexicans simply are not interested with. They don’t have enough products targeted for Mexicans like sweet bread, cheese, or guayaba. Noticing this opportunity, Gigante, Mi Tienda has successfully established its retail stores in the US. By providing those what Mexicans want, they can have more competitiveness over the US retail stores. This is an “eye for eye strategy” for Mexican retailers
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