Walmart Goes South Case Study Chapter 8

 

Santamaria 1

Wal-Mart Goes South1. How has the implementation of NAFTA affected Wal-

Mart’s success in Mexico?

The North American Free Trade created in 1994 affected Wal -Mart`s success inMexico in three specific ways. Wal-Mart had a marketing campaign where

it offered “EveryDay Low Prices”

, but this was not quite true in Mexico because it had significant importcharges on many of the products brought from the U.S. After the implementation of NAFTA,Mexico became a free trade zone. This made it possible for Wal- Mart to reduce its tariff from 10% to 3 %. This led the government to solve the logistical problem due to the fact thatMexico`s transportation system was below average. NAFTA encourages Mexico to improvethe transportation system, which lowers the logistical cost. Additionally, NAFTA allowsforeign investment in Mexico. As a result, Wal-Mart was able to build manufacturing plantsin Mexico because of the cheap labor. In this particular case we can observe how low laborcost contributes to obtain low import tariffs therefore leads to cheaper products. Wal-Mart`ssuccess in Mexico was definitely possible because of the NAFTA implementation.2. How much of Wal-

Mart’s success is due to NAFTA, and how much is due to Wal

-

Mart’s

inherent competitive strategy? In other words, could any other North American retailer havethe same success in Mexico post-NAFTA, or is Wal-Mart a special case?NAFTA benefits every company that is willing to operate abroad. This agreementsolved some difficulties but Wal-Mart`s inherent competitive strategy was effective in theMexican Market. As we all know Wal-Mart`s strategy to win against its competitors is itsoffered prices. The company is considered leader in the market because it has the capability

Book case studies

Part 1: The business in the global environment
Chapter 1 Introduction to the business enterprise
Chapter 2 Globalization and the business environment

Part 2: Economies and markets
Chapter 3 National economies in the global environment
Chapter 4 International trade and global competition
Chapter 5 Strategies in a globalized world

Part 3: Societies in the international environment
Chapter 6 Cultural and social environments
Chapter 7 The political environment
Chapter 8 The legal environment

Part 4: Global issues and business
Chapter 9 Financial markets
Chapter 10 Technology and innovation
Chapter 11 Ecology and climate change
Chapter 12 Ethics and social responsibility
Chapter 13 Critical themes in perspective


Chapter 1 Introduction to the business enterprise

OPENING CASE STUDY: The rise of the social web sees Facebook soar in popularity

  • Geographical focus: United States, global
  • Industry: Social web
  • Critical themes: Globalization, Changing societies, CSR
EXPLORING THE GLOBAL BUSINESS ENVIRONMENT: The Brics take the stage
  • Geographical focus: Brazil, Russia, India, China
  • Industry: Various, including manufacturing and natural resources
  • Critical themes: Globalization, Emerging economies, Multi-dimensional environment
MEET THE CEO: Guido Zegna, CEO of Italian luxury group, Zegna
  • Geographical focus: Italy, global
  • Industry: Retailing, fashion
  • Critical themes: Globalization, Changing societies, Emerging economies
CLOSING CASE STUDY: Cemex constructing a brighter future
  • Geographical focus: Mexico, global
  • Industry: Building materials, construction
  • Critical themes: Emerging economies, Globalization, CSR

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Chapter 2 Globalization and the business environment

OPENING CASE STUDY: Geely of China acquires iconic Swedish carmaker, Volvo

  • Geographical focus: China, Sweden
  • Industry: Automotive
  • Critical themes: Emerging economies, Globalization
EXPLORING THE GLOBAL BUSINESS ENVIRONMENT: Bumpy road for global car companies
  • Geographical focus: United States, Global
  • Industry: Automotive
  • Critical themes: Role of the state, Globalization, Multi-dimensional environment
MEET THE CEO: Paul Bulcke, CEO of Nestlé, the Swiss food company
  • Geographical focus: Switzerland, global
  • Industry: Food
  • Critical themes: Globalization, Emerging economies
CLOSING CASE STUDY: Nokia rises to the challenge of the changing mobile phones market
  • Geographical focus: Finland, Global
  • Industry: Mobile phones, telecommunications
  • Critical themes: Globalization, Emerging economies

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Chapter 3 National economies in the global environment

OPENING CASE STUDY: Polish entrepreneur puts best foot forward

  • Geographical focus: Poland
  • Industry: Retailing, shoe manufacturing
  • Critical themes: Changing societies, Emerging economies
EXPLORING THE GLOBAL BUSINESS ENVIRONMENT: Ireland’s roller coaster economy
  • Geographical focus: Ireland, European Union
  • Industry: Pharmaceuticals, computers
  • Critical themes: Role of the state, International risks, Globalization
MEET THE CEO: Jeff Kindler, CEO of Pfizer, the US pharmaceutical company
  • Geographical focus: United States, global
  • Industry: Pharmaceuticals
  • Critical themes: Globalization, Role of the state, CSR
CLOSING CASE STUDY: Tata’s prospects mirror those of India
  • Geographical focus: India, global
  • Industry: Various, including manufacturing
  • Critical themes: Globalization, Emerging economies

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Chapter 4 International trade and global competition

OPENING CASE STUDY: BHP Billiton digs deep in global markets

  • Geographical focus: Australia
  • Industry: Mining
  • Critical themes: Role of the state, Multi-layered environment, CSR
MEET THE CEO: Robert McDonald, CEO of Procter & Gamble (P&G)
  • Geographical focus: United States, global
  • Industry: Consumer goods
  • Critical themes: Globalization, Emerging economies
EXPLORING THE GLOBAL BUSINESS ENVIRONMENT: Africa’s natural resources: the example of Ghana
  • Geographical focus: Ghana
  • Industry: Oil, gold
  • Critical themes: Emerging economies, Role of the state, International risks
CLOSING CASE STUDY: Volkswagen builds on strengths in global markets
  • Geographical focus: Germany, global
  • Industry: Automotive
  • Critical themes: Globalization, CSR, Role of the state

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Chapter 5 Strategies for globalization

OPENING CASE STUDY: South Korea’s Kepco: the new global force in nuclear power stations

  • Geographical focus: South Korea, Middle East
  • Industry: Nuclear power
  • Critical themes: Multi-layered environment, Globalization
MEET THE CEO: Jorgen Buhl Rasmussen, CEO of Carlsberg, the Danish brewer
  • Geographical focus: Denmark
  • Industry: Brewing
  • Critical themes: Globalization, Role of the state, CSR
EXPLORING THE GLOBAL BUSINESS ENVIRONMENT: Mexico: the lagging OECD economy
  • Geographical focus: Mexico
  • Industry: Various, including manufacturing
  • Critical themes: Role of the state, Changing societies, Multi-dimensional environment
CLOSING CASE STUDY: Sony seeks to revive profitability
  • Geographical focus: Japan, global
  • Industry: Electronics
  • Critical themes: Globalization, International risk

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Chapter 6 Cultural and social environments

OPENING CASE STUDY: When cultures collide: Vale of Brazil takes over Inco of Canada

  • Geographical focus: Brazil, Canada
  • Industry: Mining
  • Critical themes: Changing societies, Multi-dimensional environment
MEET THE CEO: Yorihiko Kojima, CEO of Mitsubishi Corporation, the Japanese trading group
  • Geographical focus: Japan, global
  • Industry: Trading activities
  • Critical themes: Globalization, Emerging economies, International risk
EXPLORING THE GLOBAL BUSINESS ENVIRONMENT: The Arab world looks to the past and the future
  • Geographical focus: Middle East, North Africa
  • Industry: Natural resources
  • Critical themes: Changing societies, Multi-dimensional environment
CLOSING CASE STUDY: Variety is the spice of life for McDonald’s
  • Geographical focus: United States, United Kingdom
  • Industry: Fast food outlets
  • Critical themes: Changing societies, Globalization

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Chapter 7 Political environments

OPENING CASE STUDY: SAB Miller reaps rewards for investing in emerging markets

  • Geographical focus: United Kingdom, South Africa, emerging markets
  • Industry: Brewing
  • Critical themes: Emerging economies, Globalization, Multi-dimensional environment, CSR
MEET THE CEO: Zhang Xin, CEO, Soho China
  • Geographical focus: China
  • Industry: Property
  • Critical themes: Role of the state, Changing societies, Multi-dimensional environment
EXPLORING THE GLOBAL BUSINESS ENVIRONMENT: Hungary finds political consensus elusive
  • Geographical focus: Hungary, European Union
  • Industry: Various, including manufacturing
  • Critical themes: Role of the state, Changing societies, Multi-dimensional environment
CLOSING CASE STUDY: Gazprom: seeking new markets but weighed down at home
  • Geographical focus: Russia
  • Industry: Energy
  • Critical themes: Role of the state, Globalization

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Chapter 8 Legal environments

OPENING CASE STUDY: Anyone for a fake iPhone?

  • Geographical focus: China, global
  • Industry: Telecommunications
  • Critical themes: International risk, Globalization
EXPLORING THE GLOBAL BUSINESS ENVIRONMENT: Barriers on the rise in the ‘borderless’ world of the internet
  • Geographical focus: China, global
  • Industry: Internet services
  • Critical themes: Role of the state, Changing societies
MEET THE CEO: Mike Lynch, CEO of Autonomy, a British software company
  • Geographical focus: United Kingdom
  • Industry: Software
  • Critical themes: Globalization, CSR
CLOSING CASE STUDY: The crash which brought down an aircraft forever: Apportioning blame for the Concorde crash
  • Geographical focus: United Kingdom, France
  • Industry: Aviation
  • Critical themes: Role of the state, Multi-layered environment

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Chapter 9 Financial markets

OPENING CASE STUDY: The base of the pyramid: Microfinance goes global

  • Geographical focus: Bangladesh, global
  • Industry: Finance, social enterprise
  • Critical themes: Changing societies, CSR
EXPLORING THE GLOBAL BUSINESS ENVIRONMENT: Britain loses its shine in global finance
  • Geographical focus: United Kingdom, global
  • Industry: Finance
  • Critical themes: Globalization, Role of the state
MEET THE CEO: Kenichi Watanabe, CEO of Nomura, the Japanese investment bank
  • Geographical focus: Japan
  • Industry: Finance
  • Critical themes: Multi-layered environment, International risk, Multi-dimensional environment
CLOSING CASE STUDY: From cheese to chocolate: Kraft takes over Cadbury
  • Geographical focus: United Kingdom, United States
  • Industry: Food
  • Critical themes: Globalization, CSR

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Chapter 10 Technology and innovation

OPENING CASE STUDY: Applied Materials: Thinking small leads to thinking big

  • Geographical focus: United States, global
  • Industry: Solar energy
  • Critical themes: Globalization, CSR
EXPLORING THE GLOBAL BUSINESS ENVIRONMENT: Shake-up in the global pharmaceutical industry
  • Geographical focus: Global
  • Industry: Pharmaceutical, biotechnology
  • Critical themes: International risk, Globalization, CSR
MEET THE CEO: Kiran Mazumdar Shaw, Chairman and Managing Director of Biocon, the Indian biotechnology company
  • Geographical focus: India
  • Industry: Pharmaceutical, biotechnology
  • Critical themes: Emerging economies, Globalization, Multi-layered environment
CLOSING CASE STUDY: What lies behind Samsung’s competitiveness?
  • Geographical focus: South Korea
  • Industry: Electronics, telecommunications, microchips
  • Critical themes: Globalization, CSR, Changing societies

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Chapter 11 Ecology and climate change

OPENING CASE STUDY: BYD is fired up – on batteries

  • Geographical focus: China
  • Industry: Batteries, automotive
  • Critical themes: Emerging economies, Globalization
EXPLORING THE GLOBAL BUSINESS ENVIRONMENT: Balancing development and conservation: Brazil’s dilemma
  • Geographical focus: Brazil
  • Industry: Natural resources, agriculture
  • Critical themes: Emerging economies, Multi-dimensional environment, Changing societies
MEET THE CEO: Khalid al-Falih, CEO of Saudi Aramco, the oil producer
  • Geographical focus: Saudi Arabia
  • Industry: Petroleum
  • Critical themes: Changing societies, CSR, Globalization, Role of the state
  • CLOSING CASE STUDY: Oil companies scramble for stakes in Iraq’s oilfields
  • Geographical focus: Iraq
  • Industry: Petroleum
  • Critical themes: Changing societies, CSR, Globalization, Role of the state

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Chapter 12 Ethics and corporate social responsibility

OPENING CASE STUDY: Cargill, the ‘farm-to-fork’ giant

  • Geographical focus: United States, Indonesia, global
  • Industry: Agriculture
  • Critical themes: Globalization, CSR
EXPLORING THE GLOBAL BUSINESS ENVIRONMENT: Food security in the world: a safer future?
  • Geographical focus: Global
  • Industry: Agriculture
  • Critical themes: Multi-layered environment
MEET THE CEO: Paul Polman, CEO of Unilever
  • Geographical focus: United Kingdom, Netherlands
  • Industry: Consumer goods
  • Critical themes: Emerging economies, CSR
CLOSING CASE STUDY: Wal-Mart: Can bigger be better?
  • Geographical focus: United States
  • Industry: Retailing
  • Critical themes: Multi-dimensional environment, Multi-layered environment, CSR

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Chapter 13 Critical themes in perspective

OPENING CASE STUDY: Shining a spotlight on working conditions at China’s Foxconn

  • Geographical focus: China
  • Industry: Manufacturing
  • Critical themes: Changing societies, CSR, Globalization
CLOSING CASE STUDY: Oil spill in the Gulf of Mexico sparks a re-think of regulation in the oil industry
  • Geographical focus: United States
  • Industry: Oil industry
  • Critical themes: CSR, Role of the state, Multi-layered environment

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