Abstract

This case discusses the success story of Wal-Mart, the world's largest retailer, in Mexico. Wal-Mart started its international operations in 1991 with its entry into Mexico. The company entered in Mexico through a joint venture with Grupo Cifra SA de CV (Cifra), a leading Mexican retailer. Wal-Mart later consolidated its position in Mexico by acquiring a major stake in Cifra. Many analysts felt that Cifra gave Wal-Mart a good platform to quickly establish its operations in Mexico. Moreover Wal-Mart's low-price strategy suited the aspirations of the local Mexican population, a large majority of whom were in favor of low priced products. Wal-Mart was seen as a supplier of quality food, groceries and other supplies at affordable prices. Wal-Mart also received permission from the Mexican government to set up in-store bank branches. Many expected that Wal-Mart would bring a similar kind of competition in the financial services sector and make financial products more affordable to the Mexican people. The case discusses the factors that contributed to Wal-Mart's success in Mexico and also the challenges the retailer had to face in Mexico.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the factors that contributed to Wal-Mart's success in Mexico
• Understand the issues and challenges faced by a large retail giant while expanding its operations to a developing country.

Keywords

Wal-Mart de Mexico SAB de CV, Grupo Cifra SA de CV, Mexico Retail Sector, International Business, Expansion Strategy, Wal-Mart Stores Inc, Retail Giant, Low price strategy, banking sector, Trader protests, In-store bank branch, Financial Services, Organized Retail, Pyramids of the Sun and the Moon, Commercial Mexicana, Soriana, Gigante