How Has the Implementation of Nafta Affected Walmart’s Success in Mexico?

1000 Words Jul 22nd, 2013 4 Pages
1. How has the implementation of NAFTA affected Walmart’s success in Mexico?

Walmart’s marketing campaign has been “everyday low prices”. This was not the case in
Mexico prior to NAFTA. Walmart was paying higher tariffs to import American goods.
Once NAFTA was implemented, Mexico became a free trade zone. This made it possible for Walmart to reduce its tariffs from 10% to 3% creating a level playing field with its competitors. With the signing of NAFTA, it also opened up the doors to foreign investment in Mexico. Walmart was also paying huge fees for goods to be shipped from Europe and
Asia into Mexico. Once these companies knew that building manufacturing plants in
Mexico they could keep the costs low by
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So Comerci, Soriana and Gigante formed a purchasing consortium that allows them to negotiate better pricing from suppliers. This collaboration known as Sinergia, ran into problems with Mexican regulators and the consumer product council. These agencies feared that Sinergia would use its purchasing power to force unreasonable low prices on its suppliers. The merger was approved but
Walmart had continued to expand forcing other drastic actions. “In 2011, it announced that it was ready to expand by opening new stores. Comerci also entered into several alliances, including one with U.S. brand based-Costco, a major competitor of Walmart, where
Comerci owns 50% of Costco Mexico. In 2007, Gigante sold its supermarket chain to
Soriana allowing Soriana to expand by acquisition and gain greater purchasing efficiencies for its larger network of supermarkets.”(Daniel & Radenbaugh, pg. 322) I think what all companies need to do to remain competitive is to offer promotions, special offers, rebrand and create new products. Offer products of similar quality to compete against other products. For example, I work in a flooring store we don’t just offer one product of carpet, hardwood, vinyl and ceramic. We offer many products at different price catagories, some name brands

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