Walmart In Mexico Case Study

Wal-Mart’s success is also attributed to the in-store bank branches it created proving its innovativeness in the Mexican market. Wal-Mart had received permission from the Mexican government to install in-store bank branches and the company finished the installations in 2007 (Lyons 5). The Mexican government saw Wal-Mart as being capable of stopping the oligopolistic tendencies of international banks operating in Mexico. Consequently, this would make financial products more affordable to the Mexican people most of whom could not afford to open bank accounts before. The banking operations proved successful as it eased the traffic in the stores and boosted sales for the giant retailer. Wal-Mart was also successful in Mexico because of its comprehension

The company changed from the U.S. system of using robots in its distribution networks to using Mexican laborers. These workers earned around U.S. $5 a day and were satisfied (Lyons 6). The efficiency at which these workers functioned in the distribution systems ensured that the products were always available in the Wal-Mart stores. Consequently, this positively affected the low-pricing strategy of Wal-Mart and it opened more stores to cater for the rise in demand for the products. Another factor for the success of Wal-Mart in Mexico is the economies of scale it enjoys in Mexico. It has ensured that the company is always a step ahead of its competitors. The large economies of scale make it possible for the giant retailer to offer discounts and to implement its low pricing strategy. Consequently, it has led to an increase in demand for Wal-Mart’s products as Mexicans are attracted to the low prices. The move has resulted in small competitors who do not enjoy economies of scale to close down their

It is because in 1998 after the Asian financial crisis, the South Korean economy had started reviving at a fast rate (Lyons 7). The growing economy, therefore, offered attractive venture opportunities for the giant retail company. Also because of the financial crash, the Korean currency was trading artificially low making it lucrative for the U.S. domestic economy if the company was to venture into the South Korean market. Wal-Mart managed to establish only sixteen stores in the country (Lyons 7). There are particular reasons as to why Wal-Mart failed in South Korea. The first reason is the Korean culture. Wal-Mart has a domestic and global strategy of low pricing. The business model did not go well with South Korean consumers. The customers just like their German counterparts have a culture of preferring high-quality goods (Lyons 8). The low pricing products offered by Wal-Mart appeared to be of an inferior quality. South Koreans are known for being workaholics and work efficiently to facilitate their high maintenance lifestyle. They, therefore, do not appreciate low-priced