The Success Story of Wal-Mart in Mexico


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Case Details:

Case Code : BSTR264
Case Length : 14 Pages
Period : 1991 - 2007
Pub Date : 2007
Teaching Note :Not Available
Organization : Wal-Mart de Mexico SAB de CV
Industry : Retail
Countries : Mexico, USA

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts Contd...

Positive Image Helped

Analysts felt that Walmex's retail operations certainly helped make the regular household items more affordable for Mexicans. During its initial years, Walmex published price comparisons showing how much cheaper its prices were compared to other retailers. This forced other retailers to improve their services and bring down prices too. This competitive environment fostered by Walmex ultimately benefited the Mexican customers. When Mexico experienced an economic setback in 1994, other foreign retailers like Sears Roebuck & Co. and Kmart sold out their stakes and quit the country, but Wal-Mart stayed on.

During this time, the company established and improved its market share in Mexico's retail sector and that indicated its own confidence in the Mexican economy's long run prospects...

Outlook

Walmex established itself as a company that was largely unbeatable on the price front. This widely held perception in Mexico helped it grow as the Mexican market was predominantly price conscious. It was seen both by the people and the government of Mexico as a company that catered to the large section of people with low incomes. On the same lines, Walmex successfully diversified into selling drugs and into banking. Walmex also stepped up competitiveness based on both price and quality, forcing the local retailers such as Commercial Mexicana, Soriana, and Gigante to gear up their efficiency...

Exhibits

Exhibit I: A Note on Retail Market of Mexico
Exhibit II: Milestones in Wal-Mart History
Exhibit III: Share Price Movement of Wal-Mart and Walmex
Exhibit IV: Walmex's Various Retail Formats
Exhibit V: Key Financials of Walmex


 

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