At that point, the competitive advantages of the American retailers would shine through. U.S. companies that lack these competitive advantages would see no benefit from entering the Mexican market, regardless of NAFTA.
3. Comerci's main move to remain competitive was to try and match Wal-Mart's buying power. It tied with another competitor to form a buying group, in the hopes that it can lower its cost of goods sold to a level that would allow it to compete with Wal-Mart. This appears to have been the main strategic response the company has made to compete.
Ultimately, Wal-Mart derives its buying power from its global scale. In addition to its massive U.S. market, it buys for Mexico and Canada at the same time, and often its goods from China are sold by its stores there as well. This means that Comerci cannot match the buying power of Wal-Mart no matter with whom it enters a buying group.
The advantage of this strategy is that it does improve the company's buying power. The first disadvantage of this strategy is that it does not do enough to match Wal-Mart's buying power. The second disadvantage is that it fails to address the many other ways that Wal-Mart outcompetes Comerci, including the other ways that impact on the company's overall cost structure. Comerci's actions are insufficient, and unlikely to succeed. The company is going to need a much broader customer base -- beyond Mexico -- in order to even approach the buying power of Wal-Mart now that Wal-Mart has half the Mexican retail market.
4. Comerci is in a difficult position. Mass market retailers usually struggle when Wal-Mart enters...
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