Women Eutrepranuers - The Next Step :: Exploratory Essays Research Papers

  Ã‚  Ã‚   During the 1990's, American women have made unprecedented moves away from corporate business into the home-based work world. Seeking a way to incorporate their career and personal interests with family responsibilities, they are tearing down the stereotype of Supermom and replacing it with Mompreneur, a new image that allows for more creativity, flexibility, and personal expression. The growth of home-based women-owned businesses has been phenomenal, especially when the traditional role of women is taken into consideration. Until the 1950's (excluding a period during the early 1940's when women took up positions in the workforce vacated by men fighting in World War II) America still embraced the ideal woman as a Donna Reeves stereotype (Scott 274). A woman was meant to stay at home and attend to her domestic duties, nurture her children, and support her husband in all things -- all done with grace, style, and no murmur of discontent (Behr and Lazar 18-19)!    Girls born during the 1950's grew up in a transitional world. Older women were beginning to make inroads in the work world, but there was as yet no emphasis on goal- setting, no encouragement to take up a career. Neither was there discouragement, but the lack of parental and teacher guidance created a generation of lost women, many of whom now face their midlife years with little or no idea of what to do with themselves.    The generation that followed these lost women was more fortunate. Opportunities in the work force were opening up, and schools were beginning the slow process of restructuring and rethinking needed to encourage young women to seek career options. Many of these young women embraced this new opportunity, creating a generation of over-achievers who sought to carve out a place for themselves as equals in the corporate world. These women spawned the term Supermom and, in doing so, created an entirely new set of issues for women to face.    Foremost among these issues was burnout. A majority of typical Supermoms were part of two-income families where both husband and wife worked long hours. In the words of one Maryland woman who found herself with all the domestic duties in addition to her full-time career: "Something had to give. I thought, 'This is not right. I'm cheating someone and I'm probably cheating everyone,' ... I needed to be home" (Yoest 1).

Price Policy

The purpose of this essay is threefold. First,to identify specific factors and the environment affecting an export price policy. Second, to analyse thisthese factors within our firm and to extract the best decisions given our starting point. Finally, to consider the above and to give guidelines governing thatwhat should be applied in the international marketing price. It should be noted that in some cases due to an information deficiency, assumptions should be madee. â€Å"Pricing is the moment of truth† (Stottinger,2001).Probably this affirmation is essentially valid in domestic marketing, even more in international marketing. Surprisingly, the literature in this area is characterized by a gapthere is a gap in the literature in this area. Given theirits importance, pricing havehas not attracted much academic research interest compared with other tools of marketing (Stottinger, 2001). Nevertheless, this should not be and cannot be a barrier for the quality of this essay. Albau m and Duerr (2008) no havehave not given a clear message regarding the level of difficulty about practice of establishing an international price.However, for a large influx of authors export price differs from domestic price, and due to thatthis the environment is sui generis in each country (Jain, 1989). It is the writer? s opinion that an overview of the challenge gives the impression that it is somewhat more difficult than in domestic marketing. Sometimes the pricing affair is too tangled to be pliant to a general sort of description (Diamantipoulous and Mathews, 1995). In summary, despite of finding similar market threats in the international â€Å"arena†, every market havehas non-identical consequences and a â€Å"constellation†of elements (Kublin,1900).All of this leads to talk of international factors affecting pricing. The goal is to analyze the factors and bring them in line with our product. Sometimes these factors are so-called such aslabelled â€Å"Interna l† and â€Å"External† factors (Tellis, 1986). The writer’s intention is not to follow the system of any author concretely and to blend the most important literature and match with the firm. To avoid excessive interminable details, these factors are exclusively factors that differ from domestic factors, or actorsthose such as competition, or buyer’s perception that are present in the domestic market but now are completely unknown in the new scenario. Cost has been and is being one of the most vital factors affecting price determination (Albaum & Duerr, 2008). It is useful because the system cost creates a limit where prices below are not permitted to stayit creates a system where prices are not permitted to stay below a certain limit. (Simon,1995). Historically, the quandary is somewhere between direct cost and full cost.The choice of the cost floor depends on the company's goal. In the futureLater the company'sthis goal will be explained, but so far, it i s enough to say that full costs fits better. The company objectives are to build a new market in the long-run, and using full cost enabling the company to recovered all the cost.. Apart from a â€Å"new† packaging, the new central cost is based on transportation. It is important to take into account theat volume of the product when consideringis another important costs. (Albaum & Dueer).In some cases companies fail due to only takinge into account this factor (Backman, 1953). It given that should we mightis essential that we emphasize other factors. Market conditions: it is time to analyze demand. An important idea of our demand is the concept of elasticity. Should I give as done thatThe elasticity of our customer tends not to be inelasticgreat. A pPerson who owns a pedigree dog or an exotic animal, tends to give allwant the best for their animals, and consequently are less price-sensivitysensitive (or there is less price sensitivity).Broadly speaking, they buy regardless of price, but always in the limits of consumer? s price awareness. â€Å"The better differentiated the product, the more difficult it is to make a comparison between different products and the higher the quality and the prestige image of the product, the lower the price sensivity†. (Nagle, 1987). Theseis three characteristics should beare present in our product, therefore the customer should tend to be â€Å"inelastic† Competition is a pivotal factor and reflects supply in economic theory.Cost draws a minimum price, demand delineates a maximum price, and competitors will condition a final price between these limits. (Albaum & Duerr, 2008). Due to lack of information, it should be assumingassume some level of competition. The firm must expect some degree of competition, but owing to the kind of product (premium product for a pedigree animal) the market should be clearly delimited. Anyway, in this stage the advice for the firm should be to stay aware of our nearest competit ors and extract value information of the background of our competitorsfrom our competitors’ background.Legal or political: widely speaking, after the Treaty of Maastricht and the constitution of the European Community the legal or political issues between European countries have been removed. It Ccan be interesting to mention one aspect of the legislation related with our product, and in last instance it can affect price decision. The European Parliament has passed some regulation concerning to animal feeds, certifying that Community legislation on animal health is properly binding and fulfilling.The law of the EU is directly applicable in UK, therefore, it should be noticed that if our firm has passed the controls for selling in UK there is not going to be a problem achieveing a license to sell around Europe. It is not necessary to argue about economic themes since has been created a homogeneous economic area has been created. Company policies and marketing mix: It is inevit able to speak about the product of the company. Price should be related to product considerations (Albaum & Duer, 2008).The characteristics of the product – i. e type of demand, physical and psychological attributes, packaging, quality, degree to which competitors are considered acceptable substitutes differentiation, state of maturity and so on – influence the prizeprice. (Kaplan, Dirlam, Lanzillotti,). Assuming that Edzell Wood has a product range and product positioning similar to that sold for garden and aviary birds under the Charnwood brand some specifications should be made for relating price and product.If the product range is large and product positioning is premium, this makes it advisable to establish a rather high price. To what extent will depend more or less highon its weighting with other factors. Some studies, under some premises, have showned that â€Å"high price† is associated with â€Å"high quality†( ) It can be interesting to speak a bout the nature of the product that Edzell is selling and to connect this with the buyer’s perception, another relevant factor.Following Nelson (1970) (Darbi and Karni 1973) goods can be divided into two types: experience good and credence goods. † An experience good is one whose features can be ascertained only upon consumption. A second category might be that of credence goods, when quality cannot be determined even after consumption†. With all probability, our product may be among experience goods and credence goods. It is the writer's opinion that in this field the labels brand didn't succeed because it is a kindthe type of good where the brand plays a crucial role.Have you seen animal feeds branded by tesco? The consumers are in part blind and are using non – physical attributes to value the utility of the product and transform this utility in terms of money. It might be a compulsory stop to speak at length about terms such us value and utility but it is beyond the scope of this essay. Suffice it to say that if the consumer is not in a position to judge accurately the value of the product directly, consumers intending to reduce the risk will be willing to pay higher prices as safeto remain safe.Pet owners or Zoological centres want to give all the best for their animals. People don’t eat feeds animalsanimal feed and consequently cannot check the quality of the product. It is the total package including complementary features such as veterinarian advice, delivery, support with any problem related with the animal and food, analysis of components, demonstration about quality, certificates, as well as the symbolic features such as prestige and status that are perceived as delivering more value than our competitors in a pricing point (Hanna & Dodge, 1995).The company should take advantage of this. It is time put on the table matto analyse how the pricing philosophy and pricing objectives play a strong role in this process. In l ine with previous aspects it should be speak about price strategy. It is strongly adviceadvisable to the firm to follow a strategic pricing related to a product differentiation. The firm should stressed differentiation through   product characteristics and position in the industry that are conducive to putting the emphasis on the value of our brand name and enjoying some price premiumpremium prices in consequence.Pricing models can be mixed and matched. Probably there is no a strategy price (skimming,sliding down the demand curve, ando so on) that fsuits perfectly with our task. The price strategy should be a relatively high price related with a high premium product, putting the emphasis in the quality and the complementary features. It should try to implement some promotions to try to encourage the customer to know the product in the first stage. It can be dangerous to play upping or downing the price, becausedue to the quality image can be affected.The objective of our price str ategy should integrated goals such uas, obtaining the highest return on investment, maintaining or increaseing market share, meeting a specified sales goal, meeting a specified profit goal, profit maximisation, meeting competition and so on (Teacher). The objective of our price strategy should integrate goals such as, obtaining the highest return on investment, maintaining or increasing market share, meeting a specified sales goal, meeting a specified profit goal, profit maximisation, meeting competition and so on (Teacher)Firm and management: the international experience of the firm and commitment to the venture are important factors. Assuming that Edzell does not have international experience and it is a small enterprise it should be noticeded that it is important to advise the firm's members about the importance of pricing decisions. Furthermore, the firm should be completely conscious and to have a strong commitment withto go internationalexpanding internationally. This is commo nly forgotten in some companies, especially smaller ones. , Aall of thisthese factors influence setting the right price.It is usual to forget this in some companies, especially in small companies. A crucial place occupies the price decision controlPrice decision control occupies a crucial place – the step within the firm at which the decision is tooktaken. (Myers,Cavusgil, Diamantopoulous, 2002). To verifyied that the person who sets the prices has the skills to do it. It is important not to forget channel distribution as a factor affecting price. A product ishas much more than a physical value,value; it is also on how it is sold and after-sales service and so on.The customer’s willingness to pay is directly influenced by these features. The firm should teach the channel distribution how to give this high quality service. Remembering that animal feed is a very intangible product for the buyer and these details are the key point to give a message in consonance with our price. In our case, assuming that direct export has been choosedchosen the goal should be relatively factibleachievablee(? ). Also regarding channels and distribution our firm should avoid structures tending to result in export-price scalationthe escalation of export price (Cavusgil and Zou, 1994).It is necessary to highlight that a good relationship with the channels is very useful to control the final price. (Bowersox et al, 1992). It is the writer? s opinion that the choice ofto choose a direct mode of exportationing hasis have been influenced by theseis parameters. Our company should weight up the benefits of pricing the goods and services in euros or in sterling. Intuitively, most eurozone customers will prefer to see prices in euros. Using a sterling prices list may lose part of our business. The main disadvantage of making and accepting euro payments is that it exposes our firm to currency risks.One way to hedge against exchange rate movements can be to arrange a forward fore ign exchange contract – this is an agreement initiated by you to buy or sell a specific amount of foreign currency at a certain rate, on or before a certain date. In the field of price quotation, our exportations should use the system definition based on Incoterms (International Commercial Terms). Although the detail of which incoterms should be choosechosen is beyond the scope of this essay, exporters should consider some factors.Between others; shipment, insurance coverage, availability of information, currency convertibility problems, and son on (Albaum ; Duerr, 2008). Ultimately, price quotations should be in a form that customers and channels find suitable, and at least as convenient for the customer as those offered by competitors. Anyway, the price quotations should be reflected in the final price. All of these factors should be complemented with some basic guidelines. Pricing flexibility is a principle that should guide all the decisions. The right placeprice(? today, cannot be the right price tomorrow. The issue, more than to think if our price havehas to be higher, lower or the same level compared with our domestic prices or the competition prices it is to set the right price in the right moment. Probably, some factors hashave been omitted but not forgotten due to limited space. And always remember that setting a price â€Å"It is not a science, but it is an art. †Ã¢â‚¬  (John I. Leahy, Black ; Decker) Bibliography Stottinger, B. (2001) Strategic export pricing: a long and winding road. Journal of International Marketin, 9 (1). 40-55Jain, S. C (1989) â€Å"Standardization of international marketing strategy: some research hyphoteses† Journal of marketing, Vol 53, January, pp. 70-9 Kublin, M. (1990) â€Å"A guide to export pricing†, Industrial Management, Vol. 32 No. 3, pp. 29-32 Diamantopoulos, A. and Mathews, B. (1995), Making pricing decisions: A study of Managerial Practice, Chapman ; Hall, London. Mathews, B. Cavusgil , Diamantopoulos, A. (2002), Antecedents and actions of export pricing strategy: A conceptual framework and research propositions. European Journal of Marketing, Vol. 36, No ? , 2002, pp. 159-188.

How useful is Joseph Fletcher’s “Situation Ethics” as a guide to human behaviour? Essay

Rudolf Bultmann claimed that Jesus Christ had no ethics except for â€Å"Love thy neighbour as thyself†. This is what the Anglican Joseph Fletcher based his theory of Situation Ethics on. Fletcher opposed the idea of Legalistic and Antinomian Ethics. Legalistic ethics is where there are absolute rules to what should and should not be done. Fletcher said that Legalism couldn’t accommodate the â€Å"exceptions to the rule† and that rejecting a particular aspect of the law than you surely must reject it all. For example the law â€Å"Do not kill† may require more laws to allow killing in self defence, killing in war, killing unborn babies etc. and doing this contradicts the law in the first place. Antinomian Ethics means â€Å"against law† and people using this approach do not live by an ethical system at all. Fletcher is against this not only because it is unprincipled but also on the basis of existentialist ethics, which argues that reality is composed of singular event and moments in time and Antinomian ethics follows no predictable direction from one situation to another. Situation ethics is based purely on agape love for all. That every ethical decision we make should be made on the premise that â€Å"the end justifies the means†, and that the most loving action with a pure motive is the best one. He claims that Jesus’ Sermon on the Mount should be our moral code rather than the Old Testament’s Ten Commandments. Jesus’ ethics of â€Å"love thy neighbour as thyself† can be related to every ethical dilemma, whether modern or old. â€Å"Jesus said nothing about birth control, large or small families, childlessness, homosexuality, masturbation, fornication, premarital intercourse, sterilisation, artificial insemination, abortion, sex, foreplay, petting and courtship. Whether any form of sex (Hetero, Homo or Auto) is good or evil depends on whether love is fully served.† (Fletcher quoted by Jenkins) Fletcher pointed out that even Jesus broke Jewish law if love was better served by doing so. â€Å"Christ Jesus †¦ abolished the law with its commandments and legal claims.† Ephesians 2:13-15 Christians of all denominations can use Fletcher’s theory, which is an advantage as religious disputes and anger between the Protestants and Catholics is such a divide in the Christian religion. Situation ethics could help break down the barriers and unite a faith once again, as situation ethics main principle is love. Fletcher developed six fundamental principles. These are: 1) No actions are intrinsically right or wrong. Nothing is good in and of itself except for love. Actions are good if they help people and bad if they don’t. One cannot expect to live responsibly with moral absolutes. 2) Good actions should not be done for reward (E.g. experiencing a good feeling or seeking altruistic deeds in return) but should be done for their own sake. Jesus and Paul taught love as the highest principle above the Law. 3) Justice is love at work in the community. 4) Love is practical and not selective. We should show love to all, even our enemies. Christian love is unconditional. 5) Love is the end – never a means to something else. 6) Humans have the responsibility of freedom. They are not bound by any Law. With this comes the responsibility to ‘do the most loving thing’ in every situation. â€Å"Fletcher claims that it is a mistake to generalise. You can’t say ‘Is it ever right to lie to your family?’ The answer must be, ‘I don’t know, give me an example.’ A concrete situation is needed, not a generalisation. ‘It all depends’ may well be the watchword of the Situationist.† (Vardy & Grosch p.130) There are many benefits to Situation Ethics. The Bible does not cover many modern topics such as abortion, artificial insemination etc and situation Ethics allows us to work out which is the most loving action with the most loving end. It is also true to the Gospel representation of Jesus and what rules he lived by rather than living by the Old Testament or Jewish laws such as the Ten Commandments, which Jesus came to amend. Situation ethics is flexible, practical and allows for certain actions if the motive is pure and loving for others. It allows the evaluation of actions to choose the least wrong out of two wrong actions, which a legalist cannot do. There are however many criticisms which mostly come down to the problem of knowing what the most loving action is. As we cannot predict actions of other or even actions of our own, it is difficult to know whether the most loving end will actually come or whether an unseen factor may emerge and change the outcome. Selfish people also may twist situation ethics to suit themselves. Agape love is only an ideal to follow as closely as possible not to live by, as it is difficult to see things from an objective point of view. How can we be sure that an action comes out of Agape? Who is to decide whether an action is pure by motive? Can God only decide this at Judgement Day? Another very important criticism is that it can be argued that Hitler was killing Jews out of love for the Arian race and the future of the world. Does Situation ethics allow for such actions that have been dubbed â€Å"Wrong, and that’s that.† such as the Holocaust, September the Eleventh and the Bali bombing? Although the arguments for situation ethics are very convincing and useful for everyday life, the criticisms cannot be ignored, as they are very plausible and important for world issues and topics. A way that considers both Situation ethics and legalism and is somewhere in between is Proportionalism. Proportionalists believe moral rules can only be overridden if there is a proportionate reason in a particular situation. This includes both Natural law (killing, stealing, lying, cheating) and the Situational ethics view. Proportionalists believe that these laws should be adhered to unless there are good reasons not to. This allows for flexibility and a certain amount of relativism whilst still using the fundamental aspects of the Bible. An evil like pain, death or mutilation is, in itself, pre-moral or non-moral, and should never be described as ‘moral’. It is the act as a whole, which is right or wrong, and it is the person, or the person in his or her acting, who is morally good or morally bad. (Bernard Hoose quoted by Vardy & Grosch) I conclude that Fletcher’s situation ethics is highly useful for Christians in everyday life for all the reasons above. However I do believe that there has to be a balance and in my opinion it seems that Proportionalism is the best and most moral route to follow. It contains principles of both Situation ethics and Legalism and seems to make the most sense.

Case Analysis of Wal-Mart Mexico

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 added Wal-Mart superstores (shifting Aurrera to a budget niche and relabeling its stores Bodega) and Sam’s Club warehouse stores, as well as introducing two new restaurant formats. Wal-Mart-Cifra had fewer grocery stores (though more stores of all formats) than either of competitors Gigante and Comercial Mexicana as of 1993, but had overtaken them by 2000 and today has 326 Wal-Mart, Aurrera, Sam’s, and Superama stores. Wal-Mart rolled out its â€Å"every day low prices† (EDLP) policy in Mexico in 1999-2000. It controlled 49 percent of Mexican supermarket sales in 2001. Wal-Mart also began to post price comparisons with other chains, a practice that in 2002 got it expelled from ANTAD, Mexico’s National Association of Supermarket and Department Stores. Today, 62 percent of Wal-Mart Mexico’s shares are owned by the U. S. based parent, Wal-Mart Stores. 2. Vision The vision of the Company summarizes their commitment to Mexico: â€Å"Contribute toward improving the quality of life for Mexican families. † Their basic belief is Respect for the Individual, Service to Our Customer, and Strive for Excellence, with Integrity being the underlying principle. 1. 3 The Mission Statement The mission upholding the Company’s permanence and success is value creating. All their efforts, strategies and actions are aimed at this objective. . Organizational Chart: Exhibit: 1 Exhibit: 1 2. Divisions of Wal-Mart Mexico: Wal-Mart Mexico’s size and geographic coverage dwarf those of its competition. It operates 694 stores in 73 Mexican cities. The Retail formats of Wal-Mart Mexico are: †¢ Bodega Aurerra †¢ Wal-Nlart Supercenter †¢ Sam’s Club †¢ Superarna †¢ Suburbia and †¢ Vips Although 360 of these stores are self-service (the others are restaurants [Vips] and department stores [Suburbia]), Wal-Mart Mexico has 55 percent of the Mexican retail market. The three major formats (Aurerra, 30 percent; Wal-Mart Supercenter, 27 percent; and Sam’s Club, 29 percent) together provide more than 86 percent of its revenues. 44 percent of the entire countries population is concentrated in 25cities metro areas. A bit more than 18 percent live in the capital city’s metro area. Mexico’s rural population accounts for about 34 million or about 33 percent of the country’s total population. The retail industry does not have a ingle outlet in the rural concentrations, which leaves the market to neighborhood Stores, public markets, or street vendors, which, as individual businesses, do not have a significant presence in the market as a whole. |FORMAT |NAME |#OF STORES |# IN 25 MOST IMPORTANT |% IN 25 MOST IMPORTANT | | | | |URBAN AREAS |URBAN AREAS | Warehouse |Bodega Aurerra |161 |117 |73% | |Suparmarket |Superama |50 |50 |100% | |Hypermarket |Supercenter |86 |74 |86% | |Savings Club |Sam’s Club |61 |42 |68% | |Restur ant |Vips |209 |190 |91% | | |El Porton |46 |42 |91% | |Apparel |Suburbia |53 |53 |100% | |Total | |666 |568 |85% | 3. 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 of Wal-Mart Mexico’s stores are located in the 25 most important metro areas in the country. 4. Geographic Coverage [pic] [pic] 5. Responsibilities To the Stakeholders The Customer — The word ‘always' can be seen in virtually all of Wal-Mart Mexico’s literature. Their belief is that the customer is always right, and the stores are still driven by this philosophy. Their commitment to the customers is to Offer the right merchandise assortment, in the right amount, and at the right time at Everyday Low Prices, Always. they ensure and improve the quality of their service to provide the best possible shopping experience. Shareholders – Look after and grow the equity they have been entrusted with, observing the highest standards of integrity and the Corporate Governance best practices is their commitment towards their shareholders. The actions include †¢ foster transparency, timely presentation of information to the shareholders and ethical company management, which in turn contributes towards increasing the value of the Company, all within a control environment and with Corporate Governance best practices. †¢ Through the Statement of Ethics and Compliance program, they ensure that Integrity is an ever-present and global principle. †¢ They develop and every day instill a culture of compliance with beliefs, laws, standards and policies. The Employees – Wal-Mart Mexico believed in listening to employees and challenging them to come up with ideas and suggestions to make the company better. Its first contribution as a corporate citizen is its employment of more than 109,000 people throughout the country and the extensive training programs (4. 2 million hours in 2004) it provides for those employees. The firm highlights its diversity since 48 percent of its employees are female. At each of the Wal-Mart stores, signs are displayed which read, ‘Our People Make the Difference. ‘ One of Wal-Mart's goals was to provide its employees with the appropriate tools to do their jobs efficiently. They provide a sound organizational culture (Integrity, Respect for the Individual, Service to Our Customers, and Strive for Excellence). Personal and professional development for their people is a priority, as well as providing job security for them and economic stability for their families through continuous growth as a company and the diversity of our operations. They have also created programs to improve the quality of life for our Associates, promote gender equality, and benefit the Associates as well as their families. The Community– Wal-Mart is involved in many community outreach programs and has launched several national efforts through industrial development grants. They create and foster programs that promote development and improve the quality of life for all families throughout Mexico. Their initiatives to do so are †¢ Through their programs and on-going support of organizations, they contribute towards generating sustainable changes and creating solutions for malnutrition and food safety issues throughout the country. †¢ They convert community actions into local commitment, allowing each business unit of the Company to become an agent of change. †¢ Wal-Mex also provides direct financial assistance to support high impact projects regarding nutrition for communities in need. The Suppliers — The commitment towards their supplier is to support their development, growth and Consolidation. The purchasing agents of Wal-Mart are very much focused people. ‘Their highest priority is making sure everybody at all times in all cases knows who's in charge, and it's Wal-Mart'. ‘Even though Wal-Mart was tough in negotiating for absolute rock-bottom prices, the company worked closely with suppliers to develop mutual respect and to forge long-term partnerships that benefited both parties'. Actions include the following †¢ They provide development opportunities to suppliers through constant growth. †¢ Through Regional Trade Fairs Wal-Mart Mexico develop local suppliers as a means of providing additional support for small and medium enterprises. They have created areas of development for the textile and garment-making industry, the production chain for perishables, and new regional products. †¢ Our information systems help suppliers to plan production and buy of raw materials, thereby creating greater operations efficiencies and market competitiveness. 6. Financial Analysis: [pic] Financial Highlights 7. Strategic Analysis 7. 1 SWOT Analysis: A scan of the internal and external environment is an important part of the strategic planning process. The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. Thus, it is instrumental in strategy formulation and selection and simultaneously to develop a competitive advantage. Strengths: ? Good Corporate Citizen: Wal-Mart Mexico has a positive reputation in Mexico as a good corporate citizen, having received prestigious awards for its actions. It publishes an annual social responsibility report, highlighting its activities as a corporate citizen in Mexico. Wal-Mart Mexico has been certified as a â€Å"Socially Responsible Enterprise† since 2001, one of only a handful of companies in Mexico to receive such an honor. ? Market Leader: It is by far the leader in the Mexican retail industry after less than a decade and a half of operations there providing low-price goods to everyone. ? Largest Private Employer: Wal-Mart is Mexico s largest private employer, with 109,057 employees in valuable jobs in many local communities with 55 percent of the Mexican retail market. Wal-Mart argues that its first contribution as a corporate citizen is its employment of more than 109,000 people throughout the country and the extensive training programs (4. 2 million hours in 2004) it provides for those employees. The firm highlights its diversity since 48 percent of its employees are female. ? Large Market Share: Today, 62 percent of Wal-Mart Mexico’s shares are owned by the U. S. based Parent, Wal-Mart Stores. ? Largest Foreign Subsidiary Wal-Mart Mexico is the largest foreign subsidiary of Wal-Mart Stores and provides approximately 25 percent of the parent’s foreign sales. Environmental Performance Wal-Mart Mexico’s environmental performance includes investing over $8 million in 2003 and 2004 to open 73 water treatment plants and a variety of recycling, energy conservation, and pollut ion-reduction activities. It also emphasizes that more than 90 percent of the products sold in its stores are supplied in Mexico. ? Local Suppliers Wal-Mart Mexico sources from local suppliers. It has leveraged its volume buying power with its suppliers. It negotiates the best prices from its vendors and expects commitments of quality merchandise. So it can minimize the cost of the goods and can offer the customers a lower selling price as well. Good promotion and sponsorship Wal-Mart Mexico also is involved in a number of philanthropic activities, including programs focused on education, nutrition, homelessness, and health. In 2004, it sponsored a National Wal-Mart Mexico Volunteer Day, and 2,476 of its associates participated. ? Good Location Good location is one of the very important criteria for being successful in the industry. The vast majority of Wal-Mart Mexico’s stores are located in the 25 most important metro areas in the country. The retail industry does not have a single outlet in the rural concentrations, as these areas do not have a significant presence in the market as a whole. Increased sales Volume Wal-Mart Mexico’s large volume of sales also indicate its strength. The firm’s net income has increased dramatically from 2002 to 2004, from $485 million to $702 million. the total square meters of space have increased between 2001 and 2004, as have sales per square meter and net income per square meter. ? Proper Segmentation Wal-Mart Mexico has a clearly defined target market. The Aurerra format is targeted at lower- to lower-middle income classes; these Bodega stores offer 48,000 SKUs. Sam’s Club targets consumers and businesses buying in volume. The Wal-Mart Supercenter stores, Superama are located in residential areas for convenience. Wal-Mart Mexico’s Suburbia department stores target the middle class, offering fashionable apparel at reasonable prices. Weaknesses: ? Location: Though majority of the stores of Wal-Mart Mexico’s location are very good, one of the stores has been located near a world historic site, the pyramids of Teotihuacan, has elicited global disapproval from activist groups and is a public relations disaster drawing large local protests. For many, it is just another example of Wal-Mart’s lack of sensitivity to community and humanity. ? Lack of clear Strategic plan Though Wal-Mart Mexico has a clear Vision, Mission and strategy they do not have an integrated version of these. Thus, they need a clear strategic plan for the future. ? Easily copied strategy Competitors are learning to respond to Wal-Mart’s size, efficiency, and success. Wal-Mart stores operate according to their ‘Everyday Low Price' philosophy. All of the main competitors are now competing with Wal-Mart now offers some version of its â€Å"every day low prices† (EDLP) formula. Wal-Mart’s competitors insist that there is now no significant price difference, and many Mexican consumers seem to have drawn the same conclusion. Opportunities: ? Scope of Diversification The convenience stores like corner stores, public markets, and street vendors business is relatively new in Mexico, there is a scope of diversification in future for Wal-Mart Mexico. Joint ventures Through a 50—50 joint venture with Office Depot and a 51—49 joint venture with Radio Shack, Grupo Gigante runs 98 Radio Shack stores throughout Mexico. Seems that Wal-Mart Mexico has an opportunity to follow such approaches to be more successful in future. ? Improved services Like Soriana, another competitor of Wal-Mart Mexico it can provides: discount specials, loyalty card programs, big-ticket item raffles and contests (e. g. , a BMW X5 automobile), outgoing employees, and mariachi band entertainment in order to appeal to female middle-class consumers. ? Foreign Penetration Grupo Gigante is successfully penetrating foreign markets. Wal-Mart Mexico can also follow the same like its competitor in order to enter in a new era. ? Strategic Plan Though Wal-Mart Mexico does not have a clear strategic plan, there is a scope to make a good one to do better in future. Threats: ? Aggressive Competitive moves of Competitors The competitors of Wal-Mart Mexico proved themselves as quick respondents. They took various desperate initiatives to response with Wal-Mart Mexico’s approaches. As result shows that The Comercial Mexicana (CM) has slipped to third in terms of market share in the Mexican retail sector. Grupo Gigante currently has 13 percent market share in the Mexican retail industry. Soriana’s sales have grown at an annual rate of 17 percent since 1994, and it has no debt. Some of their initiatives are: i. Appealing logos of competitors Chedraui’s corporate logo indicates â€Å"Chedraui: It Costs Less. † Its mission is simply â€Å"to provide the products that customers want at the best price. † ii. Foreign Penetration Grupo Gigante is successfully penetrating foreign markets. iii. Joint Ventures Through a 50—50 joint venture with Office Depot and a 51—49 joint venture with Radio Shack, Grupo Gigante runs 98 Radio Shack stores throughout Mexico. iv. Superior Services Soriana provides: discount specials, loyalty card programs, big-ticket item raffles and contests (e. g. a BMW X5 automobile), outgoing employees, and mariachi band entertainment in order to appeal to female middle-class consumers. v. Prices differences Comercial Mexicana and Soriana now aggressively publicize price differences with Wal-Mart and Aurrera. Wal-M art’s competitors insist that there is now no significant price difference and now many Mexican consumers seem to have drawn the same conclusion. ? ANTAD The Asociacion Nacional de Tiendas de Autoservicio y Departamentales (ANTAD) is the trade association that represents the retail industry in Mexico. Wal-Mart left ANTAD in October 2002 because the association’s new ethics code explicitly stated that members should not publish any type of promotions stating another member’s prices. Since Wal-Mart is not a member of ANTAD, all ANTAD members now publish their lower prices compared to Wal-Mart’s, when they have them. ? Sinergia Because of Wal-Mart’s huge purchasing power, three other retailers—Comercial Mexicana, Gigante, and Soriana—have formed a purchasing cooperative. This cooperative, Sinergia, first introduced in 2002 to compete against Wal-Mart. The cooperative was first thought of as a competitive-directed measure for purchasing imported goods, mainly electronics, where Wal-Mart has been enormously successful, but it now has been extended to such other types of merchandise as groceries and packaged food. ? Specialized Retailers The Mexican retail sector is fragmented; there are a wide variety of retail formats, many of which are informal. Because many shoppers in Mexico do not have access to automobiles, and may not have large refrigeration space to store perishables, very small independent grocery stores have thrived for decades throughout Mexico. This business is controlled by the two Mexican beer makers. Cerveceria Modelo, with the Extra stores and 7-Eleven; and Cerveceria, Cuauhtemoc Moctezuma, with Oxxo (about 3,OOO stores). The concept is beginning to include gas stations, and many small entrepreneurs have a limited regional presence. Major national chains exist in the department, pharmacy, and electronics store formats. ? Mexican Economy The Mexican economy is very volatile; the retail sector is subject to this volatility. Throughout the latter half of the 1990s, inflation and interest rates still annually averaged well over 10 percent. The peso continues in decline in value relative to the dollar. The economic volatility has a negative impact on consumers and business alike. Mexican consumers are very price sensitive because of the economic challenges that the country faces. ? Various Criticisms Despite extensive social responsibility activities and its record as the largest private employer in the country, the potential for criticism of its purchasing practices and supplier and employee relations, as well as its impact on local small businesses and communities, loom as a significant threat 7. PEST Analysis: PEST Analysis The purpose of PEST analysis is to analyze the external environment and identify the strategic opportunities and threats in the organizations operating environment that will affect to it pursues its mission. This analysis requires assessment of the environment in which the company op erates. It also analyzes the country or national environment of the country and takes into account the wider socio economic and macro–environment that may affect the company and the industry. Political Factors Government: Mexico is a federal republic—hence its official name Estados Unidos Mexicanos—operating under a centralized government. Governmental powers at the federal level are divided between executive, legislative, and judicial branches, but in political practice the executive, that is, the presidency, has had strong control over the legislative branch. Only in recent years has the legislative branch seen its power increase because of the strengthening of the multiparty system. The president is elected by popular vote for a six-year period and is both the chief of state and head of government. The president appoints cabinet members. The legislative branch is a bicameral National Congress consisting of the Chamber of Deputies and the Senate. The Chamber of Deputies has five hundred members, elected for three-year terms; the Senate has 128 members, elected for six-year terms. In the judicial branch the Supreme Court of Justice is the highest tribunal. The federation is made up of thirty-one states and the Federal District (the capital). Each state has a governor, who serves a six-year term, and a unicameral legislature. Both are elected by popular vote. Before 1997, the chief of the Federal District was appointed by the president, but has since been elected directly by popular vote. The Federal District also has an Assembly of Representatives. The local administrative level is the municipality, which is governed by a popularly elected mayor and a municipal council for three-year terms. Suffrage is universal and mandatory (but not enforced) for those over the age of eighteen. Leadership and Political Officials: The modern presidency stands in a long tradition of pre-Columbian rulers (tlatoani), Spanish colonial viceroys, and nineteenth century and revolutionary caudillos. The president holds great discretionary powers. Power and leadership are attained through the management of personal relations, which are ruled by principles of loyalty, trust, and reciprocity. These informal networks are interconnected in a pyramidal way and form the real centers of decision making. Vertical patron-client relations can be found in all segments of society. Interactions between politicians, union leaders, top bureaucrats, and ordinary people also take place through these networks. In recent years, academic credentials and technocratic knowledge have become more important than political and electoral experience. Besides being chief of state and head of government, the president has traditionally been the leader of the Institutional Revolutionary Party (PRI), which held power from 1929 to 2000. During much of the twentieth century, Mexico was a one-party democracy. The PRI emerged from the revolution and incorporated mass organizations of workers, peasants, and urban middle classes. Because of its particular origins, its longevity in power, and the influence of diverse interest groups, the PRI is difficult to classify ideologically. There are two other significant parties in Mexico. The conservative National Action Party (PAN) began enjoying electoral success at the state level in 1985. The social-democratic Party of the Democratic Revolution (PRD) emerged as a breakaway movement from the PRI in 1987 and began governing Mexico City in 1997. Both the PAN and the PRD aim at democratization, but the PRD also proposes a more equal distribution of wealth. The dominance of the PRI in federal elections was finally broken on 2 July 2000, when the candidate of the PAN won a stunning victory with 43 percent of the vote. Social Problems and Control: Both petty and organized crime increased in the 1990s. Muggings and burglaries, increasingly violent, became widespread. Drug-related violence constituted another serious cause of concern. Public security has thus become a key issue for ordinary citizens and the authorities. At the same time, the police and the judiciary system are widely believed to be ineffective and lack public credibility, partially due to unresolved high-profile political assassinations and corruption. This has led to incidents of people taking the law into their own hands. Paid neighborhood watches are common wherever people can afford them. Private security guards no longer patrol only at banks and government buildings but also at medium-sized offices and shops. In response, the government founded an additional police force in 1999, the National Preventive Police. Military Activity: Mexico has had civilian presidents since 1946 and has not been involved in international disputes in recent decades. The primary role of the military is the maintenance of internal order. The Ministry of National Defense (the army and air force) and the marines together comprised an armed force consisting of almost 240,000 members in 1998. Military expenditures have increased substantially in recent years and amounted to $2. 5 billion (U. S. ) in 1996, accounting for almost 1 percent of the GDP. In recent years the military has been involved in two serious problems: the armed uprising in the state of Chiapas and the struggle against drugs. Mexico is a major supplier of marijuana and heroin to the U. S. market and is the primary transshipment country for cocaine from South America. In 1998 the government spent $147 million (U. S. ) to combat drug trafficking, an amount that has increased spectacularly in recent years. Economic Factors Mexico City is a place to love and loathe, with everything one expects to find in the world's third-largest metropolis (only Tokyo and NYC are bigger). Mexico's best and worst ingredients are magi-mixed in this polluted and bustling megalopolis of music and noise, brown air and green parks, colonial palaces and skyscrapers, world-renowned museums and ever-spreading slums. Mexico has been progressing economically since the Mexican Civil War in 1939 when its economy was devastated. Today, tourism, industry and agriculture play a major role in the country’s economy. Mexico has seen the fastest economic development in Western Europe since the 1960’s. Tourism has played a major role since the 1960’s and in the last 40 years, tourism has been the fastest growing economic sector of the country’s GDP, helping to accelerate growth overall. Millions of visitors flock to Mexico and contribute almost $50 billion USD to Mexico’s economy each year. Agriculture contributes less than 5% of the nation’s GDP, which is high compared to other countries in Western Europe. Fishing is another important economic sector for Mexico. Industry contributes about 35% of Mexico’s GDP, but industry is still somewhat dependent on foreign investment. The most common products from this sector are motor vehicles, steel, textiles, chemicals and ships. Mexico is among the world's most open economies, but it is dependent on trade with the U. S. , which bought about 82% of its exports in 2007. Top U. S. xports to Mexico include electronic equipment, motor vehicle parts, and chemicals. Top Mexican exports to the U. S. include petro leum, cars, and electronic equipment. There is considerable intra-company trade. Trade disputes between the United States and Mexico are generally settled through direct negotiations between the two countries or via WTO or North American Free Trade Agreement (NAFTA) panels. The most significant areas of friction involve agricultural products such as livestock and sweeteners. To address the issues that affect these industries in a manner consistent with the principles of free trade, the United States and Mexico have established technical working groups. During the last three decades Mexico has grown with an annual average rate of 4%, even with the changes from an inward-looking developing economic strategy towards a more open economy with a far-reaching trade liberalization program. But the story at the sub-national level is different; these changes have modified the regional development strategies and consequently the growth paths of the 32 Mexican states. There is evidence of an uneven growth, greater disparities and important differences in welfare standards among regions. Socio-Cultural Factors Orientation: Mexicans make several cultural subdivisions within the nation. The most common one identifies northern, central, and south or south-eastern Mexico. The extensive and desertlike north was only sparsely populated until the middle of the twentieth century, except for some important cities such as Monterrey. It has traditionally housed only small indigenous populations and is generally regarded as a frontier culture. Densely populated central and western Mexico is the cradle of the nation. Highly developed Indian cultures populated this region in pre-Columbian times and it was also the heart of the colony of New Spain. Many prominent colonial cities are major urban and industrial centers today. Southern Mexico has a tropical or subtropical climate and some rain forest. It is characterized by a strong indigenous heritage and is also the poorest part of the country. Demography: The preliminary results of the 2000 population census calculated the total number of Mexicans as 97,361,711. In 1950, the total population amounted to approximately 25 million, with the figure reaching nearly 50 million in 1970. These numbers demonstrate the rapid rate of demographic growth that was so characteristic of Mexico during the second half of the twentieth century. The growth rate has slowed, but the population is still very young. The average life expectancy in 1999 was estimated at sixty-nine years for men and a little over seventy-five years for women; the infant mortality rate was almost twenty-five per one thousand. In the late twentieth century, emigration to the United States (mainly of the illegal variety) became a significant phenomenon. Linguistic Affiliation: Spoken by more than 95 percent of the population, Spanish is the official language of Mexico and was introduced through conquest and colonization. Mexican Spanish has its roots in the Spanish of Spain. In terms of grammar, syntax, and spelling there are no important differences between the two, but the pronunciation and sound are different. Certain words from the principal Indian language (Nahuatl) are incorporated into Mexican Spanish, especially in the domains of food and household. Some of these words have also been incorporated into other languages such as the English ‘chocolate' from the Nahuatl ‘chocolatl'. The national culture of Mexico boasts sixty-two indigenous languages. In 1995 at least 5. 5 million people spoke an indigenous language. The level of bilinguism, however, was high at 85 percent. Symbolism: The most important icon of Mexican national culture is the Virgin of Guadalupe, which illustrates the pervasive influence of Roman Catholicism in the national culture. She is viewed as the â€Å"mother† of all Mexicans. The dark-skinned Virgin is the Mexican version of the Virgin Mary and as such represents national identity as the product of the mixing of European and Meso-American religions and peoples. Her image was used in the struggle for independence against the Spanish. Mexicans have developed a particular sense of uniqueness, which is expressed in the popular saying como Mexico no hay dos (Mexico is second to none). This sense is also expressed in numerous elements of popular culture such as food and music. Ethnic Relations: Social policies aimed at the emancipation of Indian groups and the elimination of profound socioeconomic inequalities have been employed since the 1930s. Nevertheless, indigenous populations are among the poorest and most marginalized groups in Mexico. Prejudice among broad sectors of the population toward Indians persists. Elites in provincial towns in predominantly indigenous regions are often openly racist. This situation has strained ethnic relations and there has been a rise of indigenous movements in recent years that demand a new space in the national culture. Most significant has been the outbreak of armed indigenous rebellion in the state of Chiapas, where the Zapatista Army for National Liberation declared war on the government in January 1994. Food: Mexico possesses an extensive and sophisticated culinary culture, with a great variety of regional dishes. Three products constitute the heart of most Mexican dishes: corn, hot peppers (chiles), and beans, products that stem from pre-Columbian times. Corn is consumed in all possible forms: as a cooked or roasted corncob (elote), cooked grain of corn, porridge (atole), as wrapped and steamed dough with filling (tamal), but most importantly as a tortilla, a thin, round â€Å"pancake. Tortillas are made from corn dough and come in many sizes, although the traditional tortilla that accompanies most meals has a diameter of approximately six inches (15 centimeters). When tortillas are filled with meat or other ingredients they are called tacos or quesadillas, which are especially popular in cent ral Mexico. Much of the sophistication of Mexican cuisine comes from the use of more than one hundred different types of chiles, which range from the large and â€Å"sweet† chile ancho to the small and extremely hot chile habanero. Mexican Family Values: The family is at the centre of the social structure. Outside of the major cosmopolitan cities, families are still generally large. The extended family is as important as the nuclear family since it provides a sense of stability. Mexicans consider it their duty and responsibility to help family members. For example, the will help find employment or finance a house or other large purchase. Most Mexican families are extremely traditional, with the father as the head, the authority figure and the decision-maker. Mothers are greatly revered, but their role may be seen as secondary to that of their husband. Machismo: Machismo literally means ‘masculinity'. There are different outward behaviors to display machismo. For example, making remarks to women is a stereotypical sign of machismo and should not be seen as harassment. Mexican males generally believe that nothing must be allowed to tarnish their image as a man. Hierarchical Society: Mexican society and business are highly stratified and vertically structured. Mexicans emphasize hierarchical relationships. People respect authority and look to those above them for guidance and decision-making. Rank is important, and those above you in rank must always be treated with respect. This makes it important to know which person is in charge, and leads to an authoritarian approach to decision-making and problem- solving. Mexicans are very aware of how each individual fits into each hierarchy–be it family, friends or business. It would be disrespectful to break the chain of hierarchy. Technological Factors Most scientific research in Mexico is conducted in the public universities, mainly in the National Autonomous University and the Autonomous Metropolitan University, both in Mexico City. The National Polytechnic Institute, also in Mexico City, is the foremost research institute in engineering and technology. In recent years there has been government support for developing research centers outside the capital. There is also an extensive network of specialized autonomous research institutes that are dependent on state finances such as the National Institute of Astrophysics, Optics, and Electronics and the College of Mexico. Just over half of the almost $2 billion (U. S. ) of federal expenditures in science and technology in 1998 was channeled through the Ministry of Public Education and another 34 percent was channeled through the Ministry of Energy. The majority of the latter funds are spent on research into the exploitation of oil. Public policy concentrates on three areas: promotion of quality and quantity of scientific research, establishment of linkages between science and industry, and the promotion of technological innovation. The National Council of Science and Technology is the most important funding agency for the physical and social sciences. In 1998 it had a budget of $287 million (U. S. , with 47 percent allocated to individual postgraduate grants, 25 percent to scientific research and technological development, and 22 percent to the National System of Researchers (SNI), a program of financial incentives to productive academics. In 1998, more than sixty-five hundred researchers were in the SNI. Information on corporate funding of research and development is unavailable but is estimated to be very modest compared to Mexico's main trading partners. Mexico's future development will have to be progressively more based on the effective generation and utilization of knowledge, in order to meet economic, social and environmental challenges. The role of the scientific & technological communities in knowledge supply and in its effective integration in innovation systems cannot be overemphasized. If it wants to invest coherently in its own S&T assets, and assert its own intellectual and scientific capacities in the global knowledge society, Mexico must strive to go beyond the level of being an â€Å"economic province† of the much larger and US-dominated NAFTA. Overall investment levels in S&T remains low, although substantial investment in local human resources and infrastructure is required to ensure the absorption, adaptation and application of world-class technology. For instances, Mexico's investment on RTD is the lowest of the OECD 2 (0. 31% of GDP), compares unfavorably with 0. 38% for Turkey and represents only one-seventh of the OECD average. This figure can also be compared with those of China (0. 7%), India (0. 8%) or Brazil (at least 0. 8%). Human resource formation, a critical output of research projects, also remains disappointingly low. Mexico trains fewer Ph. D. per year than comparable countries, with 3 Ph. D. s per million inhabitants, compared to 5 in India, 6 in Brazil and 19 in South Korea. Moreover, there is a significant regional disparity in the allocation of scientific resources, with 75% of all doctoral degrees being awarded by institutions in the Mexico City area. 8. Problem Symptoms: From the above strategic analyses it could be interpreted that, Wal-Mart's current strong competitive position and its past rapid growth performance can't guarantee that the company will remain as the industry leader or maintain its strong business position in the future, since there are huge threats for the Walmart in the Mexico city. Competitors are now taking aggressive competitive moves and successfully imitating their strategies and diminishing the Wal-Mex advantage. 9. Current Strategies: Low Cost Provider Wal-Mart stores operate according to their ‘Everyday Low Price' philosophy. According their vision to contribute to improve the quality of life for Mexican families, they invest to be near and offer them the best products at Every Day Low Prices. Wal-Mart has emerged as the industry leader because it has been better at containing its costs which has allowed it to pass on the savings to its customers. It continues to improve upon its key business processes, managing them centrally and investing in them heavily for the long term payback. 10. Strategy Implementation The key features of Wal-Mart Mexico's approach to implementing the strategy is the approach to implementing the strategy by building solid working relationships with both suppliers and employees, being aware and taking notice of the most intricate details in store layouts and merchandising techniques, capitalizing on every cost saving opportunity, and creating a high performance spirit. This strategic formula is used to provide customers access to quality goods, to make these goods available when and where customers want them, to develop a cost structure that enables competitive pricing, and to build and maintain a reputation for absolute trustworthiness. Wal-Mart Mexico has been regarded as an industry leader in ‘testing, adapting, and applying a wide range of cutting-edge merchandising approaches Wal-Mart’s secret of having phenomenal track record in Mexico is that it has brought a set of superior management techniques and technologies. Press accounts have emphasized Wal-Mart’s low-price strategy, high-technology distribution network, and intense pressure on suppliers for discounts—â€Å"the same formula† as in the United States, Wal-Mart de Mexico also has connected with and replicated the U. S. Company’s huge, Automated distribution network. With NAFTA eliminating most trade barriers, Wal-Mex has direct links to U. S. -based distribution centers, but also has built twelve distribution centers within Mexico31. In addition to heightened efficiency, this multiplies Wal-Mex’s power as a purchaser, since Wal-Mart consolidates orders for all goods from outside the United States. Another contributor to Wal-Mex’s success is its use of a wide range of formats to appeal to varied classes of consumers, and particularly lower income consumers. Wal-Mart succeed to achieve economies of scale which reduces its costs of sales. With this system, goods are continuously delivered to stores within 48 hours and often without having to inventory them. Lower prices also eliminate the expense of frequent sales promotions and sales are more predictable. Cross docking gives the individual managers more control at the store level. Wal-Mart has been led from the top but run from the bottom, a strategy developed by Sam Walton and carried on by a small group of senior executives. . Although recent growth has led Wal-Mart to add more management layers, senior executives strive to maintain its unique culture. 11. Limits to the success story Mexican retailers have proven to be quick studies. All three of the main national autoservicio chains competing with Wal-Mart now offer some version of its â€Å"every day low prices† (EDLP) formula. Comercial Mexicana and Soriana now aggressively publicize price differences with Wal-Mart and Aurrera. In addition, some of the larger suppliers (especially soft drink and snack food manufacturers) have begun to print suggested prices on their packages, deterring retailers from charging more. Wal-Mart’s competitors insist that there is now no significant price difference, and many Mexican consumers seem to have drawn the same conclusion. Similarly, squeezing suppliers has become commonplace for large Mexican retailers. Executives from competing chains report that they have also begun to shift toward centralized, highly automated distribution and tracking systems, and to create detailed procedure manuals. The net result of Mexican chains’ emulation of Wal-Mart is that Wal-Mex’s share of sales among the top five Mexican retailers has remained steady for the last two years. Closer to home, Wal-Mart has struggled in northern Mexico, particularly the Monterrey area. Executives of another chain offered several analyses of Wal-Mart’s difficulties in the region. Soriana and the Texas-based HEB were already entrenched by the time Wal-Mart arrived. Wal-Mart made some early merchandising mistakes, opening no-frills Bodegas that had done well in central Mexico but left more sophisticated northern customers cold. Finally, as polarization between rich and poor increases in Mexico, Wal-Mart’s approach of selling to a broad middle faces structural limits. 12. Suggested Strategies ‘One little bad thing can wipe out lots of good things'. So every move in its business operation ought to be well thought-out and executed. Wal-Mart needs to address few areas in order to maintain or to capture an even stronger long term business position: Single-business strategy — Wal-Mart's success is mainly based on its concentration of a single-business strategy. This strategy has achieved enviable success over the last three decades without relying upon diversification to sustain its growth and competitive advantages. Given its current position in the industry, Wal-Mart may want to continue its single-business strategy and to push hard to maintain and increase market share. However, there is risk in this strategy, because concentration on a single-business strategy is similar to ‘putting all of a firm's eggs in one industry basket'. In other words, if the retail industry stagnates due to an economic downturn, Wal-Mart might have difficulty achieving past profit performance. Other than this some other suggested strategies could be: 1. Expanding into states where it had no stores; 2. Continuing to saturate its current markets with new stores; 3. Perfecting the Super center format to expand Wal-Mart's retailing reach into the grocery and supermarket arena 4. And last but not the least following the current low cost strategy through minimizing the operating cost and as well as the selling cost. 13. Conclusion The ever-changing market presents continuing challenges to retailers. First and foremost, retailers must recognize the strong implications of a ‘buyers' market' . Customers are being offered a wide choice of shopping experiences, but no one operation can capture them all. A closer look at Wal-Mart’s performance in Mexico indicates that it is neither invincible nor exceptionally exploitative. Imitation by competitors, income polarization, and economic hardship that steers consumers toward the informal sector will limit Wal-Mart de Mexico’s reach in the future. Hence, technology, demographics, consumer attitudes, and the advent of a global economy are all conspiring to rewrite the rules for success. Success in the next decade will depend upon the level of understanding retailers have about the new values, expectations, and needs of the customer. If Wal-Mart continues its customer-driven culture, it should remain a retail industrleader well into the next century. ———————– Ernesto Vega Chairman of the Board Eduardo Solorzano President and CEO Xavier del Rio Executive Vice Present, Real Estate Rafael Mature Executive Vice President and Chief Financial Officer Jose Angel Gallegos Executive Vice Present, Human Resources

In the context of the period 1886 to 1998, how valid is the view that Essay

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Profitability Measures Case Study Example | Topics and Well Written Essays - 250 words

Profitability Measures - Case Study Example On the other hand, return on assets will show how efficiently and effectively the company’s assets have been used in increasing the company’s returns. From the analysis, it will therefore be feasible to rank the companies in terms of their performance. Q2. Return on equity is a better premise of evaluating the performance of firms than the return on sales. Shareholders who are the providers of capital will only get interested if they get value for their resources. Return on equity is therefore in line with the firm’s objective of wealth maximization. Return on sales shows the proportion of sales that constitutes the profits to the company. It can be subject to manipulation by the management and therefore not a reliable way of assessing management efficiency (Freberg & Boland, 2000). Managers can alter their revenue sources to include only profitable products and customers rather than all its activities. Margins also depend on the capital base. Q3. It is possible that firms, which are profitable, offer negative returns to their shareholders. To a nonprofessional this might look ridiculous though it is possible. Profitable firms may have high obligations on repaying their debts or the directors could enjoy high compensation at the expense of the shareholders. Moreover, the large profits could be retained hence making shareholders fail to feel the profitability of the company. All the criteria used in assessing company’s performance have limitations. The best way of ranking effectiveness should be based on the shareholders wealth

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Industrial Relations Law in UK - Essay Example The industrial relations law of a particular country have a strong nexus with its broad policies as far as human resource management and employee satisfaction are concerned. These laws imply the state of affairs within the operation sphere where the workers are the one's generating maximum profitability and efficiency through their positive contribution. (Collins, 2005) In this regard, the industrial laws deal with areas of integrating personal and organisational interest, apart from widespread applicability of suitable measures of motivation and training which in turn will contribute to the worker efficiency and a cost effective strategy for achieving organisational goals. This paper deals with the industrial relations law that has been prevalent in the United Kingdom or UK with a focus on comparing the same with international standards in terms of its right to strike and the freedom of association. The categories in this paper will broadly include legal and sociological implications and issues of the industrial law in UK. After several breakthroughs in defining the contextual implications of human resources and employee relationships, Sidney and Beatrice Webb created a stark picture of the quality of trade unionism in the 1894. This was a major revelation for the social historians of that time in context of their contribution to the analysis of the system followed in Great Britain in terms of industrial relations. This aspect of study even became a full fledged field of study at Oxford by 1908. (Hyman, 2003. p 37 to 56) It has also helped defined the right of association and strike as rights that are inherent in the employees workspace where he or she may demand a certain economic and social status depending on the level of contribution to overall productivity. This further led to the construction of a framework within which these employees can call themselves the workforce within a certain industry or organisation, and thereafter affiliate themselves with an organisation called trade union which wil l identify their rights and help them adopt methodologies like collective bargaining, negotiations and even strikes, if need be, to attain the same. In this regard, the trade unions call themselves the representatives of the workforce and fight for their rights. This has given rise to various theories in terms of collective bargaining as well as the formal conception of the right to associate and the freedom to strike, in industrial laws the world over. This revolution started with UK due its history of industrial development, where it has been hailed as an international pioneer of the industrial revolution. This is, therefore, the most comprehensive definition of the Right to Strike and the Freedom of Association in UK's industrial law, which provides for clauses and immunities under these rights. (Collins, 2005) In this case, it is imperative to move forward only after briefly touching upon the origin of this law. Thus, through a keen focus on trade unionism, which was major trend in the industrialisation process, by the scholars and historians of that time, Great Britain saw the birth and evolution of its industrial relations law, that helped define the context and framework within which collective bargaining and other activities like employer employee relations would be