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Managerial economic EssayWal-Mart had a marketing campaign where it offered either Day Low Prices, but this was not quite true in Mexico because it had significant import charges on many of the products brought from the U. S. After the implementation of NAFTA, Mexico became a let go of 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 position that Mexicos transportation system was below average. NAFTA encourages Mexico to improve the transportation system, which swallows the logistical cost.Additionally, NAFTA allows foreign investment in Mexico. As a result, Wal-Mart was able to build manufacturing plants in Mexico because of the tawdry labor. In this particular case we can observe how low labor cost contributes to obtain low import tariffs therefore leads to cheaper products. Wal-Marts success in Mexico was unquestionably possible because of the NAFTA implementation. Q uestion 2 How much of Walmarts success is due to NAFTA, and how much is due to Walmart,s inherent competitive strategy? In other(a) words, could any other U.S retailer feature the same success in Mexico post-NAFTE, or is Walmart a special case? NAFTA benefits every play along that is willing to operate abroad. This understanding solved some difficulties but Wal-Marts inherent competitive strategy was effective in the Mexican Market. As we all know Wal-Marts strategy to win a turn overst its competitors is its offered prices. The company is considered leader in the market because it has the capability to offer the lowest prices for this reason Wal-Mart is considered to have a large negotiating power.They can carry off with suppliers to drop prices and consequently lower prices. In my opinion NAFTA benefits plus Wal- Marts purchasing power was the combination that allowed the company to be successful. Wal-Mart uses time inventory system which allows them to keep track of what the y need and overstep this to their suppliers. Wal- Marts purchasing power is not available in other companies therefore if competitors any to survive they should compete against the companies prices or change the type of business. Question 3 What Have Comerci and Sorina done to remain competitive?What else do you thinks hey need to do remain competitive in the tuture? Comerci and Soriana torm a purchasing consortium that would allow them to negotiate better bulk price from suppliers. Comerci plump out by opening new stores. Enter into several strategic alliances including with Wallmarts major competitor in US. Soriana bought Gigante supermarket chain and gain greater purchasing efficiencies for its larger network of supermarkets. Upgrading the supply chain and distribution channel system, reducing the using of warehouse that can cut cost of proceeding and logistic.Developing a strong relationship with supplier could make a comerci and soriana get a exclusive right of supplier , su ch as unnecessary tenure on short term credit, lower rate on short term credit, lower price of product and so on. Create customer loyalty benefit, such privilege card or coupon, this action could make the customer loyal to comerci or soriana. Multiple source advantage, by doing this comerci and soriana could get more than choice in choosing the supplier, which one could give a better rate and good service. Lobby for government intervention in avoiding a monopoly player in the arket, such as impose a regulation on floor price.Question 4 What do you think of Walmarts strategy in Mexico and Central America, and how have bilateral agreements and geographic proximity played a role in their success? What challenges do you think Walmart de Mexico e Centrameca will face as it continues to expand in Mexico and Central America? Walmart in Mexico penetrated the market with a Joint venture with its local player. This Joint venture helped Walmart gain better knowledge of the Mexican market an d supplied Walmart with upplier connections, knowledge about the local culture as well as helping Walmart to work with local authorities.This ensured successful expansion of Walmarts power in the Mexican markets, gaining the greatest influence in the shortest time period. Bilateral agreement and geographic proximity played a roled in wallmart success interm of gain and glide slope into more product and suppliers. Also have a better coordinate the network of 14 distribution centers in mexico and 11 central America, locating Wallmarts strategically throughout the region. Apart from it, Wallmart also stablished multiformat operations approach in the region to address different consumer segment