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Case Analysis of Wal-Mart Mexico

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1. Introduction

1.1 History: Wal-Mart first stuck its toe into Mexico in 1991 through a joint venture with Cifra, Mexico’s leading retail company, initially limited to developing Sam’s Club warehouse stores in Mexico. The tremendous success of the first Sam’s Club stores and the impending passage of the North American Free Trade Agreement (NAFTA) encouraged further collaboration, and Wal-Mart and Cifra expanded their joint venture through the 1990s. Wal-Mart purchased a majority stake in Cifra in 1997. Prior to the joint venture, Cifra’s lineup included Aurrera autoservicios (superstores selling food, clothing, and a variety of other items), Superama supermarkets, Suburbia department stores, and Vips restaurants. To this roster, Wal-Mart …show more content…

Target Segments:

One of the secret of Wal-Mart Mexico’s success is that it has a clearly defined target market. The Aurerra format (162 stores) is targeted at lower- to lower-middle income classes; these Bodega stores offer 48,000 SKUs. Sam’s Club (61 stores) offers a much more limited variety of products (4,000 SKUs) and targets consumers and businesses buying in volume. The Wal-Mart Supercenter stores (89 units) offer the widest variety of goods (80,000 SKUs). Superama (48 stores) contributes only 3 percent of the company’s sales; these stores offer a variety of goods (35,000 SKUs) but are located in residential areas for convenience.

Wal-Mart Mexico’s Suburbia 50 department stores target the middle class, offering fashionable apparel at reasonable prices; these stores contribute 6 percent of the company’s sales. The Vip’s chain of restaurants (284 locations) represents 3 percent of the company’s sales. The vast majority

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