Walmart Goes South - 981 Words

IBO 58001 Walmart Goes South – Ch. 8 Case Study 1) How has the implementation of NAFTA affected Walmart’s success in Mexico? The implementation of NAFTA has affected Walmart’s success in Mexico by lowering/abolishing the tariff’s which Walmart was originally subject to prior to NAFTA. This has allowed the Walmarts in Mexico to offer the same â€Å"Every Day Low Prices† to its consumers on both sides of the border without having to raise prices due to tariff fees. Prior to NAFTA, Walmart was experiencing strong levels of success in the Mexican region but the largest challenge it faced was incorporating the import charges on the goods it sold in its stores. NAFTA implementation in 1994 not only lowered tariffs from 10 to 3 percent†¦show more content†¦The first problem Sinergi faces and which it has already experienced issues with are from Mexico’s Competition Commission (CoFeCo), the governing board which deals with complaints about unfair pricing forced on suppliers and monopolistic behavior. When Sinergi was first created, CoFeCo rejected their proposal and reasoned that their combined buying power would put unreasonable forces on local suppliers to lower prices but was then accepted when Sinergi restated that creation of the consortium was in response to Walmart’s low prices and control of the market. Many issues resulted from Sinergi’s acceptance as a single buying body and of these; things like keeping a f ully disclosed record of deals and purchases, and being limited to only local suppliers are only two of the disadvantages. If Sinergi’s strategy is carried out with diligence and all three members cooperatively do their part in disclosing and being transparent with purchases then I feel they will effectively compete with Walmart in the retail market. Low costs of supplies has been one of Walmart’s keys in their strategy to succeed in the retail market, and the low costs to the members of the Sinergi agreement are what will ultimately allow them to be on a level playing field and to compete with Walmart. Although other factors like differentiation ofShow MoreRelatedWalmart, The Giant Utopia, By Sam Walton Essay981 Words   |  4 Pages Walmart, the giant utopia, the place where a lot of people usually do their shopping for the low prices and the variety of products was founded by Sam Walton. Walton was an entrepreneur a very different and innovative vision than with what was the norm at the time. He started his own company and made it into the leader in discount retailing that it is today. 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