Studyspark Study Document

Strategic Alliances Term Paper

Pages:3 (726 words)

Sources:1+

Subject:Countries

Topic:Mexico

Document Type:Term Paper

Document:#42279543


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 and high inflation, the government of Carlos Salinas introduced free market reforms that rendered the country's conditions attractive to Wal-Mart. Since Salinas assumed office in 1988, Mexico's economy was growing at 4-5% yearly and with an increase in disposable income at 70%. Although it was considered a very poor country by American standards, 30 of its 80 million people could be classified as middle class, the affluent segment concentrating in Mexico City and two others. Wal-Mart's Sam Walton and a founder of Cifra in Mexico believed that the NAFTA agreement and conditions augured well. A decade earlier, Mexicans cried out against colonial and economic imperialism. But that cry died out later.

2) Wal-Mart's competitive advantage consisted of a combination of culture and supporting information and logistics systems, which it found difficult to transfer to franchisees. These difficulties were high prices, an unsuitable distribution system, poor infrastructure, crowded roads, lack of leverage with local suppliers, improper selection of merchandise and government bureaucracy impositions on labels and instructions in Spanish (Hill).

3) Wal-Mart had intended to license its brand name to franchisees, expand via wholly owned subsidiaries, or enter into joint ventures with a Mexican company, Cifra. Because of the difficulties in transferring its culture and systems to franchisees and realizing its negligible knowledge about Mexico, Wal-Mart entered into a 50-50% joint venture with Cifra as part of its globalization expansion program.

4) Unlike other foreign ventures that moved out of Mexico City during the 1994 peso crisis, Wal-Mart took advantage of the crisis to build its market share, with 63 stores in operation at that time. It only put off expansion plans for 25 additional stores in 1995. In the meantime, it strongly improved its operational efficiency by opening a distribution center in…


Sample Source(s) Used

BIBLIOGRAPHY

1. Hill, CWL. (2002). International business competing in the global marketplace. In Entry Strategy and Strategic Alliances (515-519), 4th edition. INC Group: McGraw-Hill Companies

2. Weiner, T. (2004). Wal-Mart invades and Mexico gladly surrenders. Retrieved December 20, 2004 from Progressive Trail.Org. Website: http://www.progressivetrail.org/articles/031207/Weiner.html

Cite this Document

Join thousands of other students and "spark your studies."

Sign Up for FREE
Related Documents

Studyspark Study Document

Strategic Alliances

Pages: 3 (925 words) Sources: 1+ Subject: Business - Management Document: #11521145

Strategic Alliances This week, we are looking at strategic alliances. Under what circumstances would you agree with someone who said that alliances are very risky? A dubious strategic alliance is one when one partner is deceitful and inclined to reap a benefit for himself at the cost of other individuals who a part of the alliance. Examples of such a situation include concealing important information, not honoring promises, and shirking responsibilities. According

Studyspark Study Document

Strategic Alliances and Growth Alliances Should Be

Pages: 8 (2843 words) Sources: 6 Subject: Business Document: #28138218

Strategic Alliances and Growth Alliances should be structured in one of four ways: as an equity alliance, as a non-equity alliance, as a global alliance, or as a joint venture (Cartwright & Schoenberg, 2006; Rigsbee, 2000). How the alliance is structured depends on several different things, because not all alliance structures would be appropriate for all types of companies or all types of negotiations. It is very important that the alliance

Studyspark Study Document

Alliances Strategic Alliances and Growth in This

Pages: 6 (1911 words) Sources: 4 Subject: Business Document: #17703490

Alliances Strategic Alliances and Growth In this modern era when the corporate world is full of competition and every organization is running for its own benefits and generating revenues, alliances and acquisitions are of immense importance. Different firm shave different criteria's of entering into alliances or acquisitions and it primarily depends upon the present situation of the business as well as on the nature of the business. An alliance is an agreement

Studyspark Study Document

Strategic Alliances in the Hospitality

Pages: 16 (4558 words) Sources: 14 Subject: Recreation Document: #21737573

While companies of all types and sizes stand to benefit from strategic alliances, the relevant literature indicates that companies competing in the hospitality industry are particularly well situated to gain a competitive advantage in this way. In this regard, Rahatullah and Raeside report that, "The strategic alliance literature reveals that resources alone can not bring competitive advantage, but complementary resources can contribute to the strategic fit of partners in the

Studyspark Study Document

Strategic Alliances Between Multinational Corporations

Pages: 2 (580 words) Sources: 3 Subject: Business Document: #60765199

Strategic Alliances in Multinational Corporations Hewlett-Packard, Starbucks and Wal-Mart all have invested decades of time and expertise into how they structure strategic alliances globally, and each has taken a unique and differentiated approach to fulfilling their strategic objectives for Corporate Social Responsibility (CSR) in the context of these relationships. The intent of this analysis is to address how strategic alliances benefit these companies, an analysis of CSR initiatives arising out of

Studyspark Study Document

Strategic Alliances Describe Each Company the Companies

Pages: 2 (580 words) Sources: 3 Subject: Business Document: #97881181

Strategic Alliances Describe Each Company The companies analyzed are the Eastcom Systems and Convergence Strategies. Strategic alliance between Eastcom Systems and Convergence Strategies is formed in direct response to customer demands for International TEM solutions in EMEA and APAC regions. The alliance was formed in November 2009 wherein Eastcom Systems Pte Ltd., the global provider of world class universal cost optimization solutions for large and medium sized enterprises, formed an alliance with

Join thousands of other students and

"spark your studies".