How Has the Implementation of Nafta Affected Walmart’s Success in Mexico?

1000 Words4 Pages
1. How has the implementation of NAFTA affected Walmart’s success in Mexico? Walmart’s marketing campaign has been “everyday low prices”. This was not the case in Mexico prior to NAFTA. Walmart was paying higher tariffs to import American goods. Once NAFTA was implemented, Mexico became a free trade zone. This made it possible for Walmart to reduce its tariffs from 10% to 3% creating a level playing field with its competitors. With the signing of NAFTA, it also opened up the doors to foreign investment in Mexico. Walmart was also paying huge fees for goods to be shipped from Europe and Asia into Mexico. Once these companies knew that building manufacturing plants in Mexico they could keep the costs low by…show more content…
Their distribution system also helps to reduce expenses. Walmart builds what they call “distribution centers”. These centers receive the merchandise that is sold in the Walmart stores. The merchandise is then sorted and moved by a complex system of bar codes. The inventory information then transports it to various stores using company owned fleets. This central distribution center helps with the negotiating process because of the larger volume of merchandise being purchased at once. NAFTA helped Walmart in Mexico by lowering the tariffs to bring their pricing structure down. This was one of the challenges they faced when starting their venture into Mexico. The import charges of goods being brought into the country made their products not as competitive. After NAFTA, Walmart was back to having the advantage of lower prices. I think that the post NAFTA era made it difficult for any company to do business in Mexico. The price to bring goods into the country gave the companies in Mexico a better advantage. After NAFTA, many companies had a better chance of being price competitive in foreign countries such as Mexico. 3. What have Comerci and Soriana done to remain competitive? What else do you think they need to do to remain competitive in the future? These companies retaliated by trying to

More about How Has the Implementation of Nafta Affected Walmart’s Success in Mexico?

Open Document