In Mexico, Wal-mart is defying its critics - Article Example

In Mexico, Wal-Mart is defying its Critics Wal-Mart realized that the Mexican retail market wasvery difficult to penetrate because it was dominated by local retailers and businesses whose prices were seen as pocket-friendly compared to foreign invaders’. In addition to this, Mexico has experienced social and economic strife that has significantly lowered the purchasing power of its poor, while the middle class continues to grow. The inability of other foreign retail giants (Carrefour SA is a recent example) to succeed by adapting to Mexico’s economic conditions also signaled a major challenge.

However, when everything had been considered, it became clear that microeconomics and macroeconomics had made people (especially those in small towns) poorer. The solution was to improve their purchasing power by offering them commodities at the lowest possible prices, lower than what local retailers were offering. In retrospect, it is safe to say that macroeconomics and microeconomics had a huge impact on Wal-Mart’s strategy in Mexico. The biggest retailer in the world had to develop a pricing strategy that would enable it to enter and remain in the Mexican retail segment.

It is not often that a scenario like this is witnessed, especially when a large company like Wal-Mart is involved, but the economic conditions in Mexico meant that the company had to conform or go and try its luck elsewhere. Its pricing strategy is particularly damning evidence that the target market always dictates company approach and business strategy. Poor Mexican people were not going to work harder in order to afford Wal-Mart’s products; the company had to conform to their needs by formulating its pricing and accessibility around them and their purchasing power.

That is the influence of macroeconomics and microeconomics.