Walmart Influence in Singapore

International Business: Walmart Goes South

What can local retailers like Comerci do to compete against Walmart?

Although, there is not much that competitors like Comerci could do against Walmart since the giant retailer is already capitalizing on several of its strengths within the Mexican market. Initially, before NAFTA specifically, Walmart did face some challenges when it entered the Mexican market, such as higher import charges and finding it hard to live up to its slogan “Every Day Low Prices,” restocking unnecessary store items being unaware of the local demand, logistics problems due to poor roads and cultural clashes. However, as soon as NAFTA came to rescue Walmart, it was much easier for the giant retailer to work smoothly in the Mexican market. Comerci and other retailers are struggling to keep up with the strong strategies Walmart uses to keep its process low, fighting against the high local wages that Walmart is paying, a central distribution system second to that of the Pentagon, and strong supplier connections.

Still, suppose they want to remain competitive. In that case, the retail rivals in Mexico can think of a renewal of their marketing strategies, become more environmentally sustainable and promote themselves as more sustainable corporate entities. It could help create a strong environmental-friendly image in the target market’s minds, which is one of the emerging trends these days (Chen et al., 2021). Customers are more aware of the company’s CSR efforts than before and associate a company’s good efforts with social accountability, highly contributing to their profits. 

Other useful tactics could be creating a strong organizational culture so employees are retained easily and lobbying for governmental proximity to gain benefits when policies are changed. Since NAFTA primarily benefitted Walmart, Comerci and similar retail rivals should also contemplate getting the government’s support for their local advantages. 

How can NAFTA be beneficial to suppliers of Walmart?

As NAFTA provided a free-trade zone to businesses, the suppliers found it valuable to work with Walmart. Shipping products to Canada and building connections within the Mexican market became convenient. Walmart did not have to pay high tariffs for getting goods imported to Mexico. The cheap labor costs assisted Walmart’s suppliers in gaining access to suppliers and strengthened their relations so that the competitiveness quotient would remain low. 

Since access to several products could now be possible after NAFTA, Walmart’s suppliers became more efficient than their performance in other regions. The time taken to gain access to raw materials and their better quality would no more be a problem due to free trade. The free roaming of products from one place to another would influence the retail suppliers’ credibility more than ever as they would be able to transfer goods from one area to the next within no time. The tariff adjustments under the NAFTA agreement would help Walmart suppliers to readjust their power within the supply chain configurations. The attractiveness of getting access to products on time would help the supplier be closer to Walmart, further empowering the supplier relationships for Walmart, which has been a strength of the company for years now. 

Also, when suppliers can avoid two of the most crucial factors related to tariffs- cost control and passing expenses to consumers- it would enable them to build persistent relations with Walmart (National Retail Federation, n.d.). This would be a huge advantage for Walmart suppliers since it would not increase the cost under high tariffs due to the NAFTA agreement and help Walmart deliver what it promises in its Everyday Low Prices slogan.