'Case Analysis of Wal-Mart Mexico\r'

'1. Introduction 1. 1 History: Wal-Mart bandoff stuck its toe into Mexico in 1991 by dint of a fit embark with Cifra, Mexico’s leading sell fraternity, ab initio siced to developing surface-to- bank line missile’s in all(a)iance w be mob stores in Mexico. The tremendous victor of the source surface-to-air missile’s unify stores and the impending transportation of the North Ameri nookie detached guile cartel (NAFTA) encour jump ond further collaboration, and Wal-Mart and Cifra expanded their correlative venture d matchless the 1990s.\r\nWal-Mart purchased a studyity stake in Cifra in 1997. Prior to the joint venture, Cifra’s bill of f atomic number 18 accommodated Aurrera autoservicios (superstores selling food, clothing, and a innovation of otherwise items), Superama super food markets, suburb segment stores, and Vips restaurants. To this roster, Wal-Mart added Wal-Mart superstores ( prisonbreaking Aurrera to a budget deferra l and relabeling its stores Bodega) and Sam’s Club w arhouse stores, as well as introducing cardinal spic-and-span restaurant nameats.\r\nWal-Mart-Cifra had fewer food market stores (though much than than stores of all data formats) than both of competitors Gigante and Comercial Mexi hatfula as of 1993, nevertheless had e trulywheretaken them by 2000 and today has 326 Wal-Mart, Aurrera, Sam’s, and Superama stores. Wal-Mart rollight-emitting diode out its â€Å"e really day low-pitched worths” (EDLP) policy in Mexico in 1999-2000. It controlled 49 pct of Mexi disregard supermarket gross sales in 2001. Wal-Mart in addition began to spot harm comparisons with other bondage, a practice that in 2002 got it expelled from ANTAD, Mexico’s bailiwick Association of Supermarket and Department Stores.\r\nToday, 62 pct of Wal-Mart Mexico’s sh bes be experienceed by the U. S. based pargonnt, Wal-Mart Stores. 2. Vision The vision of the Co mpany summarizes their shipment to Mexico: â€Å"Contri only ife toward improving the tonus of life for Mexican families. ” Their basic belief is avow for the Individual, Service to Our Customer, and pass on for Excellence, with Integrity being the underlying principle. 1. 3 The legation t distributivelying The heraldic bearing upholding the Company’s permanency and victor is sparing value creating. All their efforts, strategies and actions argon aimed at this objective. . Organizational Chart: record: 1 Exhibit: 1 2. Divisions of Wal-Mart Mexico: Wal-Mart Mexico’s size and geographic c everywhereage dwarf those of its competition. It operates 694 stores in 73 Mexican cities. The sell formats of Wal-Mart Mexico atomic number 18: • Bodega Aurerra • Wal-Nlart Su per centumer • Sam’s Club • Superarna • Suburbia and • Vips Although 360 of these stores argon self-service (the others argon restaurants [Vips] and department stores [Suburbia]), Wal-Mart Mexico has 55 sh be of the Mexican sell market.\r\nThe tierce major formats (Aurerra, 30 pct; Wal-Mart Su shareer, 27 percent; and Sam’s Club, 29 percent) together house to a greater extent than 86 percent of its r dismantleues. 44 percent of the full countries race is concentrated in 25cities underpass areas. A bit more than 18 percent make it in the capital city’s underground area. Mexico’s countryfied population accounts for roughly 34 gazillion or about 33 percent of the plain’s hit population. The retail exertion does not waste a ingle outlet in the rural concentrations, which leaves the market to neighborhood Stores, public markets, or street vendors, which, as individualist communication channeles, do not incur a bespeakificant presence in the market as a whole. |FORMAT | flesh |#OF STORES |# IN 25 MOST IMPORTANT |% IN 25 MOST IMPORTANT | | | | |urban AREAS |URBAN AREAS | Warehouse |B odega Aurerra |161 |117 |73% | |Suparmarket |Superama |50 |50 | coulomb% | |Hypermarket |Supercenter |86 |74 |86% | |Savings Club |Sam’s Club |61 |42 |68% | |Resturant |Vips |209 |190 |91% | | |El Porton |46 |42 |91% | |Apparel |Suburbia |53 |53 |100% | |Total | |666 |568 |85% | 3. prat Segments: One of the secret of Wal-Mart Mexico’s conquest is that it has a deceasely defined taper market.\r\nThe Aurerra format (162 stores) is targeted at lower- to lower- middle income classes; these Bodega stores allow 48,000 SKUs. Sam’s Club (61 stores) offers a much more limited variety of products (4,000 SKUs) and targets consumers and businesses purchase in volume. The Wal-Mart Supercenter stores (89 units) offer the widest variety of ripe(p)s (80,000 SKUs). Superama (48 stores) contributes only 3 percent of the union’s sales; these stores offer a variety of computables (35,000 SKUs) but are primed(p) in residential areas for convenience. Wal-Mart Mexicoà ¢â‚¬â„¢s Suburbia 50 department stores target the middle class, offering swagger dress up at reasonable damages; these stores contribute 6 percent of the proud society’s sales.\r\nThe Vip’s chain of restaurants (284 locations) represents 3 percent of the company’s sales. The vast bulk of Wal-Mart Mexico’s stores are set in the 25 intimately weighty metro areas in the country. 4. Geographic Coverage [pic] [pic] 5. Responsibilities To the Stakeholders The Customer — The innovatives show ‘always can be seen in virtually all of Wal-Mart Mexico’s literature. Their belief is that the customer is always right, and the stores are withal driven by this philosophy. Their committedness to the customers is to twist the right merchandise assortment, in the right amount, and at the right time at daily economic crisis Prices, Always. they ensure and change the tint of their service to contribute the trounce executable shopping exp erience.\r\nShareholders †Look later and grow the equity they surrender been entrusted with, observing the highest standards of fair play and the Corporate Governance best practices is their commitment towards their per centumholders. The actions hold • foster transparency, timely presentation of information to the shareholders and h anest company care, which in turn contributes towards increasing the value of the Company, all at tenderheartedness a control surroundings and with Corporate Governance best practices. • with the Statement of Ethics and Compliance program, they ensure that Integrity is an present and global principle. • They develop and every day strike a culture of compliance with beliefs, laws, standards and policies.\r\nThe Employees †Wal-Mart Mexico believed in listen to employees and challenging them to come up with ideas and suggestions to make the company better. Its original character as a corporal citizen is its empl oyment of more than 109,000 people by dint ofout the country and the extensive cookery programs (4. 2 million hours in 2004) it provides for those employees. The firm highlights its kind since 48 percent of its employees are feminine. At all(prenominal)(prenominal) of the Wal-Mart stores, signs are dis compete which read, ‘Our hoi polloi shit the Difference. ‘ One of Wal-Marts goals was to provide its employees with the appropriate tools to do their jobs efficiently.\r\nThey provide a croak organizational culture (Integrity, Respect for the Individual, Service to Our Customers, and Strive for Excellence). Personal and professional education for their people is a priority, as well as providing job security for them and economic stability for their families through continuous harvest-home as a company and the diversity of our trading trading subroutines. They shoot in like carriage gived programs to improve the fictitious character of life for our Assoc iates, press gender equality, and benefit the Associates as well as their families. The Community†Wal-Mart is voluminous in many another(prenominal) other(prenominal) community outreach programs and has launched several field of study efforts through industrial culture grants.\r\nThey create and foster programs that promote learning and improve the quality of life for all families throughout Mexico. Their initiatives to do so are • Through their programs and on-going complement of organizations, they contribute towards generating sustainable changes and creating solutions for malnutrition and food guard employment issues throughout the country. • They convert community actions into local anesthetic commitment, allowing each business unit of the Company to shape an operator of change. • Wal-Mex resemblingly provides direct financial assistance to support high usurpation projects regarding nutrition for communities in need. The Suppliers †The commitment towards their supplier is to support their developing, growth and Con potentation.\r\nThe buying agents of Wal-Mart are very much foc utilise people. ‘Their highest priority is do sure everybody at all times in all cases issues whos in charge, and its Wal-Mart. ‘Even though Wal-Mart was tough-minded in negotiating for absolute rock-bottom prices, the company worked tight with suppliers to develop mutual respect and to forge semipermanent partnerships that benefited both parties. Actions include the future(a) • They provide development opportunities to suppliers through constant growth. • Through Regional Trade Fairs Wal-Mart Mexico develop local suppliers as a mean of providing additional support for unforesightfulr and medium enterprises. They sop up created areas of development for the textile and garment-making manufacturing, the fruit chain for perishables, and new shareal products. • Our information sy bowknots help sup pliers to plan production and buy of raw materials, in that locationby creating greater operations efficiencies and market agonisticalness. 6. Financial synopsis: [pic] Financial Highlights 7. strategic Analysis 7. 1 SWOT Analysis: A scan of the internal and external milieu is an heavy part of the strategic planning process. The SWOT abbreviation provides information that is helpful in matching the firms preferences and capabilities to the competitive environment in which it operates.\r\nThus, it is instrumental in outline formulation and selection and simultaneously to develop a competitive advantage. Strengths: ? Good Corporate Citizen: Wal-Mart Mexico has a optimistic reputation in Mexico as a good merged citizen, having received prestigious awards for its actions. It publishes an annual accessible responsibility report, highlighting its activities as a corporate citizen in Mexico. Wal-Mart Mexico has been certified as a â€Å" heartyly Responsible Enterprise” since 2001, superstar of only a handful of companies in Mexico to receive such an honor. ? trade Leader: It is by far the attraction in the Mexican retail patience after little than a decade and a half of operations at that place providing low-price goods to everyone. ? Largest Private Employer:\r\nWal-Mart is Mexico s biggishst private employer, with 109,057 employees in valuable jobs in many local communities with 55 percent of the Mexican retail market. Wal-Mart argues that its first contribution as a corporate citizen is its employment of more than 109,000 people throughout the country and the extensive training programs (4. 2 million hours in 2004) it provides for those employees. The firm highlights its diversity since 48 percent of its employees are female. ? Large market place Share: Today, 62 percent of Wal-Mart Mexico’s shares are owned by the U. S. based Parent, Wal-Mart Stores. ? Largest external supplemental Wal-Mart Mexico is the largest inappropria te subsidiary of Wal-Mart Stores and provides close to 25 percent of the parent’s opposed sales. Environmental operation Wal-Mart Mexico’s environmental performance includes investing over $8 million in 2003 and 2004 to open 73 water treatment plants and a variety of recycling, get-up-and-go conservation, and pollution-reduction activities. It besides emphasizes that more than 90 percent of the products sell in its stores are supplied in Mexico. ? Local Suppliers Wal-Mart Mexico sources from local suppliers. It has leveraged its volume buying power with its suppliers. It negotiates the best prices from its vendors and expects commitments of quality merchandise. So it can minimize the represent of the goods and can offer the customers a lower selling price as well. Good promotion and sponsorship Wal-Mart Mexico alike is involved in a number of philanthropic activities, including programs focused on education, nutrition, homelessness, and health. In 2004, it spons ored a interior(a) Wal-Mart Mexico put up Day, and 2,476 of its associates participated. ? Good Location Good location is one of the very consequential criteria for being successful in the industry. The vast volume of Wal-Mart Mexico’s stores are fit(p) in the 25 most most-valuable metro areas in the country. The retail industry does not take hold a single outlet in the rural concentrations, as these areas do not rush a significant presence in the market as a whole. Increased sales Volume Wal-Mart Mexico’s large volume of sales as well as reason its strength. The firm’s net income has increase dramatically from 2002 to 2004, from $485 million to $702 million. the total square meters of topographic point lay down increased betwixt 2001 and 2004, as have sales per square meter and net income per square meter. ? neat Segmentation Wal-Mart Mexico has a haply defined target market. The Aurerra format is targeted at lower- to lower-middle income class es; these Bodega stores offer 48,000 SKUs. Sam’s Club targets consumers and businesses buying in volume. The Wal-Mart Supercenter stores, Superama are situated in residential areas for convenience.\r\nWal-Mart Mexico’s Suburbia department stores target the middle class, offering fashionable apparel at reasonable prices. Weaknesses: ? Location: Though majority of the stores of Wal-Mart Mexico’s location are very good, one of the stores has been located near a world historic site, the pyramids of Teotihuacan, has elicited global disapproval from activist groups and is a public relations disaster drawing large local protests. For many, it is just another example of Wal-Mart’s lack of sensitivity to community and humanity. ? Lack of clear Strategic plan Though Wal-Mart Mexico has a clear Vision, Mission and scheme they do not have an integrated translation of these. Thus, they need a clear strategic plan for the future. ? Easily copied outline\r\nCompetit ors are learning to respond to Wal-Mart’s size, efficiency, and success. Wal-Mart stores operate harmonise to their ‘ bothday diminished Price philosophy. All of the main competitors are now competing with Wal-Mart now offers roughly version of its â€Å"every day low prices” (EDLP) formula. Wal-Mart’s competitors insist that in that location is now no significant price difference, and many Mexican consumers seem to have drawn the alike(p) conclusion. Opportunities: ? Scope of Diversification The convenience stores like loge stores, public markets, and street vendors business is relatively new in Mexico, there is a scope of diversification in future for Wal-Mart Mexico. Joint ventures Through a 50â€50 joint venture with social function Depot and a 51â€49 joint venture with wireless trail, Grupo Gigante runs 98 Radio Shack stores throughout Mexico. Seems that Wal-Mart Mexico has an opportunity to follow such approaches to be more successful in future. ? Improved work Like Soriana, another competitor of Wal-Mart Mexico it can provides: brush off specials, loyalty card programs, big-ticket(prenominal) item raffle and contests (e. g. , a BMW X5 automobile), outgoing employees, and mariachi bunch entertainment in order to arouse to female middle-class consumers. ? Foreign Penetration Grupo Gigante is successfully penetrating foreign markets.\r\nWal-Mart Mexico can also follow the comparable like its competitor in order to enter in a new era. ? Strategic Plan Though Wal-Mart Mexico does not have a clear strategic plan, there is a scope to make a good one to do better in future. Threats: ? ravening Competitive moves of Competitors The competitors of Wal-Mart Mexico proved themselves as quick respondents. They took non-homogeneous desperate initiatives to response with Wal-Mart Mexico’s approaches. As pass on shows that The Comercial Mexicana (CM) has slipped to third in footing of market share in the Mexican retail sector. Grupo Gigante currently has 13 percent market share in the Mexican retail industry.\r\nSoriana’s sales have full- bighearted at an annual rate of 17 percent since 1994, and it has no debt. Some of their initiatives are: i. Appealing tidings of competitors Chedraui’s corporate logo indicates â€Å"Chedraui: It Costs Less. ” Its mission is simply â€Å"to provide the products that customers require at the best price. ” ii. Foreign Penetration Grupo Gigante is successfully penetrating foreign markets. iii. Joint Ventures Through a 50â€50 joint venture with Office Depot and a 51â€49 joint venture with Radio Shack, Grupo Gigante runs 98 Radio Shack stores throughout Mexico. iv. superior Services Soriana provides: discount specials, loyalty card programs, big-ticket item raffles and contests (e. g. a BMW X5 automobile), outgoing employees, and mariachi band entertainment in order to appeal to female middle-class consumers. v. Prices di fferences Comercial Mexicana and Soriana now precipitously publicize price differences with Wal-Mart and Aurrera. Wal-Mart’s competitors insist that there is now no significant price difference and now many Mexican consumers seem to have drawn the comparable conclusion. ? ANTAD The Asociacion Nacional de Tiendas de Autoservicio y Departamentales (ANTAD) is the trade association that represents the retail industry in Mexico. Wal-Mart left ANTAD in October 2002 because the association’s new ethics code explicitly verbalise that divisions should not publish any type of promotions stating another member’s prices.\r\nSince Wal-Mart is not a member of ANTAD, all ANTAD members now publish their lower prices compared to Wal-Mart’s, when they have them. ? Sinergia Because of Wal-Mart’s vast purchasing power, three other retailersâ€Comercial Mexicana, Gigante, and Sorianaâ€have formed a purchasing cooperative. This cooperative, Sinergia, first int roduced in 2002 to compete against Wal-Mart. The cooperative was first intellection of as a competitive-directed measure for purchasing trade goods, in the main electronics, where Wal-Mart has been enormously successful, but it now has been lengthened to such other types of merchandise as groceries and package food. ? Specialized Retailers The Mexican retail sector is abrupt; there are a wide variety of retail formats, many of which are informal.\r\nBecause many shoppers in Mexico do not have access to automobiles, and may not have large refrigeration space to store perishables, very small independent grocery stores have thrived for decades throughout Mexico. This business is controlled by the ii Mexican beer makers. Cerveceria Modelo, with the Extra stores and 7-Eleven; and Cerveceria, Cuauhtemoc Moctezuma, with Oxxo (about 3,OOO stores). The concept is beginning to include gas stations, and many small entrepreneurs have a limited regional presence. Major national chains exi st in the department, pharmacy, and electronics store formats. ? Mexican economy The Mexican economy is very volatile; the retail sector is subject to this volatility.\r\nThroughout the latter half of the 1990s, inflation and interest rates still each year averaged well over 10 percent. The peso continues in decline in value relative to the dollar. The economic volatility has a negative impact on consumers and business alike. Mexican consumers are very price sensitive because of the economic challenges that the country faces. ? Various Criticisms disrespect extensive social responsibility activities and its record as the largest private employer in the country, the potential for criticism of its purchasing practices and supplier and employee relations, as well as its impact on local small businesses and communities, loom as a significant threat 7. PEST Analysis: PEST Analysis The purpose of PEST synopsis is to analyze the external environment and identify the strategic opportuni ties and threats in the organizations operating environment that bequeath require to it pursues its mission. This analysis requires assessment of the environment in which the company operates. It also analyzes the country or national environment of the country and takes into account the wider socio economic and macroâ€environment that may affect the company and the industry. Political Factors governing: Mexico is a federal republicâ€hence its official name Esta body politic Unidos Mexicanosâ€operating under a centralize government.\r\nGovernmental powers at the federal direct are divided between executive, legislative, and judicial forkinges, but in political practice the executive, that is, the presidency, has had pie-eyed control over the legislative branch. Only in late(a) years has the legislative branch seen its power increase because of the change of the multiparty system. The prexy is elected by favourite balloting for a six-year period and is both the ch ief of subject and head of government. The chair appoints cabinet members. The legislative branch is a bicameral National Congress consisting of the house of Deputies and the Senate. The Chamber of Deputies has five hundred members, elected for three-year names; the Senate has 128 members, elected for six-year bounds.\r\nIn the judicial branch the despotic Court of Justice is the highest tribunal. The federation is make up of thirty-one variousiates and the Federal District (the capital). Each state has a governor, who serves a six-year term, and a unicameral legislature. both are elected by popular vote. forward 1997, the chief of the Federal District was appointed by the president, but has since been elected directly by popular vote. The Federal District also has an Assembly of Representatives. The local administrative level is the municipality, which is governed by a popularly elected mayor and a municipal council for three-year terms. vote is universal and mandatory (b ut not en crusaded) for those over the age of eighteen.\r\nLeadership and Political Officials: The modern presidency stands in a long tradition of pre-Columbian rulers (tlatoani), Spanish colonial viceroys, and nineteenth century and revolutionary caudillos. The president holds great discretionary powers. Power and leadership are attained through the management of personal relations, which are ruled by principles of loyalty, trust, and reciprocity. These informal networks are incorporate in a pyramidal way and form the real centers of decision making. Vertical patron-client relations can be found in all segments of society. Interactions between politicians, union leaders, top bureaucrats, and ordinary people also take place through these networks. In upstart years, academic credentials and technocratic fellowship have become more important than political and electoral experience.\r\nin any event being chief of state and head of government, the president has traditionally been th e leader of the Institutional Revolutionary fellowship (PRI), which held power from 1929 to 2000. During much of the twentieth century, Mexico was a unilateral democracy. The PRI emerged from the revolution and incorporated mass organizations of workers, peasants, and urban middle classes. Because of its particular origins, its longevity in power, and the influence of diverse interest groups, the PRI is difficult to classify ideologically. There are two other significant parties in Mexico. The materialistic National Action ships company (PAN) began enjoying electoral success at the state level in 1985.\r\nThe social-democratic Party of the Democratic Revolution (PRD) emerged as a breaking away movement from the PRI in 1987 and began governing Mexico City in 1997. Both the PAN and the PRD aim at democratization, but the PRD also proposes a more equal dissemination of wealth. The dominance of the PRI in federal elections was finally low-toned on 2 July 2000, when the candidate of the PAN win a stunning victory with 43 percent of the vote. Social Problems and Control: Both petty and nonionic crime increased in the 1990s. Muggings and burglaries, increasingly violent, became widespread. Drug-related abandon inventd another serious cause of concern. human race security has thus become a pigment issue for ordinary citizens and the authorities.\r\nAt the same time, the constabulary and the judiciary system are widely believed to be ineffective and lack public credibility, partially due to unresolved high-profile political assassinations and corruption. This has led to incidents of people pickings the law into their own hands. Paid neighborhood watches are common wherever people can throw them. Private security guards no longer natural law only at banks and government buildings but also at medium-sized offices and shops. In response, the government founded an additional police force in 1999, the National Preventive Police. multitude Activity: Mexic o has had civilian presidents since 1946 and has not been involved in international disputes in new-fangled decades. The primary subprogram of the force is the maintenance of internal order.\r\nThe Ministry of National exoneration (the army and air force) and the marines together comprised an arm force consisting of intimately 240,000 members in 1998. Military expenditures have increased substantially in recent years and amounted to $2. 5 billion (U. S. ) in 1996, accounting for almost 1 percent of the GDP. In recent years the military has been involved in two serious problems: the armed uprising in the state of Chiapas and the struggle against drugs. Mexico is a major supplier of marijuana and heroin to the U. S. market and is the primary transshipment country for cocaine from South America. In 1998 the government spent $147 million (U. S. ) to combat drug trafficking, an amount that has increased spectacularly in recent years. Economic Factors\r\nMexico City is a place to m aking love and loathe, with everything one expects to rule in the worlds third-largest metropolis (only capital of Japan and NYC are bigger). Mexicos best and worst ingredients are magi-mixed in this polluted and bustling megalopolis of music and noise, brown air and green parks, colonial palaces and skyscrapers, world-renowned museums and ever-spreading slums. Mexico has been progressing economically since the Mexican civilian War in 1939 when its economy was devastated. Today, tourism, industry and horticulture play a major enjoyment in the country’s economy. Mexico has seen the fastest economic development in Western Europe since the 1960’s.\r\nTourism has played a major role since the 1960’s and in the depart 40 years, tourism has been the fastest maturation economic sector of the country’s GDP, service to accelerate growth overall. Millions of visitors flock to Mexico and contribute almost $50 billion USD to Mexico’s economy each year. Agriculture contributes less than 5% of the nation’s GDP, which is high compared to other countries in Western Europe. sportfishing is another important economic sector for Mexico. patience contributes about 35% of Mexico’s GDP, but industry is still somewhat dependent on foreign investment. The most common products from this sector are repulse vehicles, steel, textiles, chemicals and ships. Mexico is among the worlds most open economies, but it is dependent on trade with the U. S. , which bought about 82% of its exports in 2007. pass off U. S. xports to Mexico include electronic equipment, motor vehicle parts, and chemicals. contribute Mexican exports to the U. S. include petroleum, cars, and electronic equipment. There is bulky intra-company trade. Trade disputes between the unite States and Mexico are loosely settled through direct negotiations between the two countries or via WTO or North American Free Trade Agreement (NAFTA) panels. The most significant area s of crash involve agricultural products such as gillyflower and unusedeners. To address the issues that affect these industries in a manner consistent with the principles of free trade, the United States and Mexico have naturalized technical working groups.\r\nDuring the last three decades Mexico has grown with an annual average rate of 4%, even with the changes from an inward- minding developing economic schema towards a more open economy with a far-reaching trade liberalization program. But the story at the sub-national level is different; these changes have modified the regional development strategies and whence the growth paths of the 32 Mexican states. There is certify of an uneven growth, greater disparities and important differences in welfare standards among regions. Socio-Cultural Factors Orientation: Mexicans make several cultural subdivisions in spite of appearance the nation. The most common one identifies northern, central, and south or south-eastern Mexico. The extensive and desertlike north was only sparsely inhabit until the middle of the twentieth century, except for some important cities such as Monterrey.\r\nIt has traditionally housed only small endemical populations and is primarily regarded as a edge culture. Densely populated central and western Mexico is the birthplace of the nation. Highly essential Indian cultures populated this region in pre-Columbian times and it was also the heart of the colony of New Spain. Many prominent colonial cities are major urban and industrial centers today. gray Mexico has a tropical or subtropical mood and some rain forest. It is characterized by a strong autochthonous heritage and is also the poorest part of the country. demography: The preliminary results of the 2000 population census calculated the total number of Mexicans as 97,361,711.\r\nIn 1950, the total population amounted to approximately 25 million, with the figure reaching most 50 million in 1970. These numbers exhibit th e rapid rate of demographic growth that was so characteristic of Mexico during the second half of the twentieth century. The growth rate has slowed, but the population is still very young. The average life expectancy in 1999 was estimated at sixty-nine years for men and a little over seventy-five years for women; the infant deathrate rate was almost twenty-five per one thousand. In the late twentieth century, emigration to the United States ( generally of the misbranded variety) became a significant phenomenon.\r\nLinguistic Affiliation: utter by more than 95 percent of the population, Spanish is the official language of Mexico and was introduced through conquest and colonization. Mexican Spanish has its roots in the Spanish of Spain. In terms of grammar, syntax, and spelling there are no important differences between the two, but the pronunciation and sound are different. Certain words from the principal Indian language (Nahuatl) are incorporated into Mexican Spanish, specially in the domains of food and household. Some of these words have also been incorporated into other languages such as the English ‘chocolate from the Nahuatl ‘chocolatl. The national culture of Mexico boasts sixty-two indigenous languages. In 1995 at least 5. 5 million people spoke an indigenous language.\r\nThe level of bilinguism, however, was high at 85 percent. Symbolism: The most important icon of Mexican national culture is the sodding(a) of Guadalupe, which illustrates the pervasive influence of Roman Catholicism in the national culture. She is viewed as the â€Å"mother” of all Mexicans. The one-sided Virgin is the Mexican version of the Virgin bloody shame and as such represents national identity as the product of the mixing of European and Meso-American religions and peoples. Her image was used in the struggle for independence against the Spanish. Mexicans have developed a particular sense of uniqueness, which is expressed in the popular saying como Mexic o no hay dos (Mexico is second to none).\r\nThis sense is also expressed in numerous elements of popular culture such as food and music. Ethnic Relations: Social policies aimed at the emancipation of Indian groups and the elimination of profound socioeconomic inequalities have been employed since the 1930s. Nevertheless, indigenous populations are among the poorest and most marginalized groups in Mexico. Prejudice among bountiful sectors of the population toward Indians persists. Elites in provincial towns in predominantly indigenous regions are often openly racist. This situation has strained social relations and there has been a rise of indigenous movements in recent years that demand a new space in the national culture.\r\n closely significant has been the outbreak of armed indigenous mutiny in the state of Chiapas, where the Zapatista Army for National dismissal declared war on the government in January 1994. Food: Mexico possesses an extensive and sophisticated culinary cult ure, with a great variety of regional dishes. Three products constitute the heart of most Mexican dishes: corn, hot peppers ( chillis), and beans, products that stem from pre-Columbian times. Corn is consumed in all possible forms: as a cooked or roasted corncob (elote), cooked grain of corn, porridge (atole), as wrapped and steamed booty with filling (tamal), but most importantly as a tortilla, a thin, round â€Å"pancake. Tortillas are do from corn dough and come in many sizes, although the traditional tortilla that accompanies most meals has a diameter of approximately six inches (15 centimeters). When tortillas are filled with meat or other ingredients they are called tacos or quesadillas, which are especially popular in central Mexico. Much of the sophistication of Mexican cuisine comes from the use of more than one hundred different types of chiles, which bleed from the large and â€Å"sweet” chile ancho to the small and extremely hot chile habanero. Mexican Family Values: The family is at the centre of the social structure. Outside of the major cosmopolitan cities, families are still generally large.\r\nThe extended family is as important as the nuclear family since it provides a sense of stability. Mexicans consider it their duty and responsibility to help family members. For example, the will help find employment or finance a house or other large purchase. Most Mexican families are extremely traditional, with the father as the head, the confidence figure and the decision-maker. Mothers are greatly revered, but their role may be seen as secondary to that of their husband. Machismo: Machismo literally means ‘masculinity. There are different outbound behaviors to display machismo. For example, making remarks to women is a stereotypical sign of machismo and should not be seen as harassment.\r\nMexican males generally believe that nothing moldiness be allowed to cloud their image as a man. Hierarchical purchase order: Mexican society and business are highly stratified and vertically structured. Mexicans emphasize hierarchical relationships. People respect authority and look to those above them for focal point and decision-making. Rank is important, and those above you in rank must always be treated with respect. This makes it important to know which person is in charge, and leads to an authoritarian approach to decision-making and problem- solving. Mexicans are very aware of how each individual fits into each hierarchyâ€be it family, friends or business. It would be disdainful to break the chain of hierarchy.\r\nTechnological Factors Most scientific enquiry in Mexico is conducted in the public universities, mainly in the National Autonomous University and the Autonomous metropolitan University, both in Mexico City. The National Polytechnic Institute, also in Mexico City, is the foremost research institute in engineering and technology. In recent years there has been government support for developing researc h centers outdoor(a) the capital. There is also an extensive network of narrow down autonomous research institutes that are dependent on state finances such as the National Institute of Astrophysics, Optics, and Electronics and the College of Mexico.\r\nJust over half of the almost $2 billion (U. S. ) of federal expenditures in apprehension and technology in 1998 was channeled through the Ministry of Public procreation and another 34 percent was channeled through the Ministry of Energy. The majority of the latter funds are spent on research into the exploitation of oil. Public policy concentrates on three areas: promotion of quality and quantity of scientific research, establishment of linkages between science and industry, and the promotion of expert innovation. The National Council of Science and Technology is the most important funding agency for the physical and social sciences. In 1998 it had a budget of $287 million (U. S. , with 47 percent allocated to individual postgra duate grants, 25 percent to scientific research and technological development, and 22 percent to the National System of Researchers (SNI), a program of financial incentives to reproductive academics. In 1998, more than sixty-five hundred researchers were in the SNI. Information on corporate funding of research and development is unavailable but is estimated to be very modest compared to Mexicos main trading partners. Mexicos future development will have to be progressively more based on the effective generation and usance of cognition, in order to meet economic, social and environmental challenges. The role of the scientific & technological communities in knowledge supply and in its effective integration in innovation systems cannot be overemphasized.\r\nIf it wants to invest coherently in its own S&T assets, and assert its own intellectual and scientific capacities in the global knowledge society, Mexico must strive to go beyond the level of being an â€Å"economic pro vince” of the much bigger and US-dominated NAFTA. Overall investment levels in S&T remains low, although substantial investment in local human resources and infrastructure is required to ensure the absorption, reading and application of world-class technology. For instances, Mexicos investment on RTD is the terminal of the OECD 2 (0. 31% of GDP), compares unfavorably with 0. 38% for washout and represents only one-seventh of the OECD average. This figure can also be compared with those of China (0. 7%), India (0. 8%) or Brazil (at least 0. 8%). Human resource formation, a critical output of research projects, also remains disappointingly low. Mexico trains fewer Ph. D. per year than comparable countries, with 3 Ph. D. s per million inhabitants, compared to 5 in India, 6 in Brazil and 19 in South Korea. Moreover, there is a significant regional disparity in the allocation of scientific resources, with 75% of all doctoral degrees being awarded by institutions in the Mexi co City area. 8. Problem Symptoms: From the above strategic analyses it could be interpreted that, Wal-Marts current strong competitive put down and its past rapid growth performance cant warranty that the company will remain as the industry leader or stay fresh its strong business position in the future, since there are huge threats for the Walmart in the Mexico city.\r\nCompetitors are now victorious aggressive competitive moves and successfully imitating their strategies and diminishing the Wal-Mex advantage. 9. Current Strategies: Low Cost Provider Wal-Mart stores operate according to their ‘Everyday Low Price philosophy. According their vision to contribute to improve the quality of life for Mexican families, they invest to be near and offer them the best products at Every Day Low Prices. Wal-Mart has emerged as the industry leader because it has been better at containing its costs which has allowed it to pass on the savings to its customers. It continues to improve u pon its key business processes, managing them centrally and investing in them heavily for the long term payback. 10. Strategy Implementation\r\nThe key features of Wal-Mart Mexicos approach to implementing the strategy is the approach to implementing the strategy by building solid working relationships with both suppliers and employees, being aware and taking notice of the most intricate details in store layouts and merchandising techniques, capitalizing on every cost saving opportunity, and creating a high performance spirit. This strategic formula is used to provide customers access to quality goods, to make these goods available when and where customers want them, to develop a cost structure that enables competitive pricing, and to build and arrest a reputation for absolute trustworthiness. Wal-Mart Mexico has been regarded as an industry leader in ‘testing, adapting, and applying a wide range of cutting-edge merchandising approaches Wal-Mart’s secret of having phen omenal track record in Mexico is that it has brought a set of superior management techniques and technologies.\r\nPress accounts have emphasized Wal-Mart’s low-price strategy, high-technology distribution network, and intense pressure on suppliers for discountsâ€â€Å"the same formula” as in the United States, Wal-Mart de Mexico also has connected with and replicated the U. S. Company’s huge, modify distribution network. With NAFTA eliminating most trade barriers, Wal-Mex has direct associate to U. S. -based distribution centers, but also has built twelve distribution centers within Mexico31. In addition to heightened efficiency, this multiplies Wal-Mex’s power as a purchaser, since Wal-Mart consolidates orders for all goods from outside(a) the United States. Another contributor to Wal-Mex’s success is its use of a wide range of formats to appeal to varied classes of consumers, and in particular lower income consumers. Wal-Mart succeed to r each economies of scale which reduces its costs of sales.\r\nWith this system, goods are continuously delivered to stores within 48 hours and often without having to inventory them. Lower prices also eliminate the expense of frequent sales promotions and sales are more predictable. Cross docking gives the individual managers more control at the store level. Wal-Mart has been led from the top but run from the bottom, a strategy developed by Sam Walton and carried on by a small group of senior executives. . Although recent growth has led Wal-Mart to add more management layers, senior executives strive to maintain its unique culture. 11. Limits to the success story Mexican retailers have proven to be quick studies.\r\nAll three of the main national autoservicio chains competing with Wal-Mart now offer some version of its â€Å"every day low prices” (EDLP) formula. Comercial Mexicana and Soriana now aggressively publicize price differences with Wal-Mart and Aurrera. In addition, some of the large suppliers (especially soft drink and snack food manufacturers) have begun to print suggested prices on their packages, deterring retailers from charging more. Wal-Mart’s competitors insist that there is now no significant price difference, and many Mexican consumers seem to have drawn the same conclusion. Similarly, squeezing suppliers has become commonplace for large Mexican retailers.\r\nExecutives from competing chains report that they have also begun to shift toward centralized, highly automated distribution and tracking systems, and to create detailed procedure manuals. The net result of Mexican chains’ emulation of Wal-Mart is that Wal-Mex’s share of sales among the top five Mexican retailers has remained steady for the last two years. Closer to home, Wal-Mart has struggled in northern Mexico, particularly the Monterrey area. Executives of another chain offered several analyses of Wal-Mart’s difficulties in the region. Soriana and the Texas-based HEB were already entrenched by the time Wal-Mart arrived. Wal-Mart made some early merchandising mistakes, opening essential Bodegas that had done well in central Mexico but left more sophisticated northern customers cold.\r\nFinally, as polarization between rich and poor increases in Mexico, Wal-Mart’s approach of selling to a broad middle faces structural limits. 12. Suggested Strategies ‘One little questioning thing can wipe out split of good things. So every move in its business operation ought to be well thought-out and executed. Wal-Mart demand to address few areas in order to maintain or to capture an even stronger long term business position: Single-business strategy — Wal-Marts success is mainly based on its concentration of a single-business strategy. This strategy has achieved enviable success over the last three decades without relying upon diversification to sustain its growth and competitive advantages.\r\n assumption its current position in the industry, Wal-Mart may want to continue its single-business strategy and to push hard to maintain and increase market share. However, there is risk in this strategy, because concentration on a single-business strategy is similar to ‘putting all of a firms eggs in one industry basket. In other words, if the retail industry stagnates due to an economic downturn, Wal-Mart might have difficulty achieving past profit performance. Other than this some other suggested strategies could be: 1. Expanding into states where it had no stores; 2. Continuing to change its current markets with new stores; 3. Perfecting the Super center format to expand Wal-Marts retailing reach into the grocery and supermarket theater of operations 4.\r\nAnd last but not the least following the current low cost strategy through minimizing the operating cost and as well as the selling cost. 13. Conclusion The ever-changing market presents continuing challenges to retailers. First and foremo st, retailers must recognize the strong implications of a ‘buyers market . Customers are being offered a wide choice of shopping experiences, but no one operation can capture them all. A closer look at Wal-Mart’s performance in Mexico indicates that it is neither invincible nor exceptionally exploitative. Imitation by competitors, income polarization, and economic hardship that steers consumers toward the informal sector will limit Wal-Mart de Mexico’s reach in the future.\r\nHence, technology, demographics, consumer attitudes, and the advent of a global economy are all conspiring to revisal the rules for success. Success in the next decade will depend upon the level of understanding retailers have about the new values, expectations, and needs of the customer. If Wal-Mart continues its customer-driven culture, it should remain a retail industrleader well into the next century. ———————†Ernesto Vega Chairman of the B oard Eduardo Solorzano professorship and CEO Xavier del Rio Executive crime Present, Real the three estates Rafael Mature Executive Vice President and brain Financial Officer Jose Angel Gallegos Executive Vice Present, Human Resources\r\n'