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Wal-Mart, Mexico, and NAFTA
Was NAFTA the reason for Wal-Mart's success in Mexico or was it Wal-Mart's new competitive strategy? Wal-Mart's generic competitive strategy is clearly that of a 'low price' model in all nations where the retailer is located. It sells a seemingly infinite amount of goods and services in an undifferentiated fashion. The main reason that consumers go to Wal-Mart is because of its prices. Wal-Mart claims to offer one-stop shopping with the lowest prices a consumer can find in the area. Without offering such low prices, the store has little traction in the market, given that other retailers offer a more expansive product line of specific items, offer specific special deals, and offer greater prestige to the customer in terms of store name. NAFTA (The North American Free Trade Agreement) marked a watershed in Wal-Mart's relationship with Mexico. Today, Wal-Mart is the largest private employer in Mexico and claims 55% of that nation's retail market.
It is true that Wal-Mart has undeniably created certain advantages for itself not directly bestowed by NAFTA. It has taken advantage of Mexico's lower labor and operational costs by...
The latter is linked to Mexican participation in GATT rather than NAFTA.
However, the critical aspect of Wal-Mart's success is still linked to the fact that after the passage of NAFTA and subsequent tariff reductions, Mexican retailers could offer more American consumer imports at a cheaper price to Mexican consumers. Greater bargaining between suppliers drove down costs, and because of its ability to operate on an economy of scale, Wal-Mart, unlike smaller Mexican retailers, could pass these savings on to the consumer.
Cost is often king when it comes to selling virtually any and every item to consumers, other than specifically 'luxury'-branded goods or highly specialized items (such as gluten-free bread for consumers with celiac disease, or specially designed shoes for serious athletes). Wal-Mart was, because of NAFTA's impact on the competition between suppliers and its sheer size, was finally able to provide Mexican…
Zimbabwe did not sign the Kimberley Accords, an agreement used to introduce ethical mining practices to the diamond industry. Combined with his policy of land seizure, President Mugabe is using the nation's diamond supply to support his rule and hold onto his position of power within the nation, after decades of bloody rule.
Lieberman, Rachel. (2008, September 9). Majority stake in Williamson diamond mine acquired by Petra. Israeli Diamond News. Retrieved January 28, 2011 at http://www.israelidiamond.co.il/english/News.aspx?boneID=918&objID=4031
In Tanzania, one of the nation's largest diamond mines was acquired in 2008 by Petra, which is based in Jersey (United Kingdom). This adds Petra's global diamond portfolio. The exchange was for a cash interest of $10 million bestowed to the Tanzanian government, illustrating the willingness of the African nation to do business with corporations of former colonial powers of the region.
Wal-Mart is the name that is well-known to all the households these days because it has established itself as the largest retailer the world over. The sales of Wal-Mart are growing with every passing day as the sales totaled up to more than $280 billion, according to the reports published in 2004. However, it should be noted Wal-Mart did not appear on the international with more than 4500 stores in
At that point, the competitive advantages of the American retailers would shine through. U.S. companies that lack these competitive advantages would see no benefit from entering the Mexican market, regardless of NAFTA. 3. Comerci's main move to remain competitive was to try and match Wal-Mart's buying power. It tied with another competitor to form a buying group, in the hopes that it can lower its cost of goods sold to
However, Switzerland has moved very slowly as a nation in accepting new cultures and outsiders. Swiss citizenship is nearly impossible to obtain. The nation is dependent upon a small, closely-knit band of citizen-soldiers for its defense. Socially, women were only given the right to vote in Switzerland in the second half of the 20th century, well after other nations. In other words, an American business manager must be prepared
Wal-Mart At the time that Wal-Mart embarked on a program of international expansion, the United States was undergoing negotiations with Mexico and Canada over the North American Free Trade Agreement or NAFTA and this brought Mexico to the attention of Wal-Mart as a fit global venue (Hill 2002). Although the Mexican economy, at the time, was beset with huge barriers to cross-border trade and investment, substantial state involvement in business activity
Wal-Mart is the world's largest retailer, and it has been significantly affected by the forces of globalization. This paper will consider those forces in the context of both the company's vision and in terms of organizational theory. Globalization Wal-Mart has been opportunistic in its approach to globalization. The company famously has become the subject of studies on globalization not just for its retail reach but for its supply chain management. Wal-Mart's vision
This analysis shows that the financing need will be $ billion, and that the net income will account for $13.749 billion of that. Wal-Mart will then need to find additional financing of $3.257 billion in order to fund its operations for the coming year.Part II.The sustainable growth rate for Wal-Mart is the ROE * (1-dividend payout ratio). The ROE for Wal-Mart last year was $13643 / $80535 = 16.9%The dividend