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Changes in Maro environment - Essay Example

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As a result of this crisis, consumers’ demand of its products was affected due to which the firm’s profitability was hampered. Social factors of the economy also impacted…
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Changes in Maro environment
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Changes in Maro environment

Download file to see previous pages... Wal-Mart in Mexico was impacted due to the 1994 currency crisis. Due to currency crisis, the interest rate was decreased in the Unites States as a result of which the amount of net capital inflows in Mexico was adversely impacted. With this macroeconomic variables’ impact, Wal-Mart’s credit position was affected which brought the firm in unstable position through increased level of cost and decreased productivity. The case of Wal-Mart in Mexico is a practical implication of the political decisions’ impact, which is a macroeconomic factor, upon the operations of a firm (Oxelheim, Wihlborg, & Zhang, 2009).
The similarity between the strategies adopted by McDonald’s in China and Wal-Mart in Mexico is that both the firm strived to come out of certain adverse consequences of the macro environment and succeed in the respective markets. The difference between the strategies is that McDonald’s followed ‘customer driven’ strategy whereas Wal-Mart followed ‘competition driven’ strategy.
This is because McDonald’s focused on implementing various ways of winning customers’ belief, while on the other hand, Wal-Mart concentrated on gaining competitive advantage through adoption of various innovative strategies such as opening up of banks in its stores.
In the case of McDonald’s expansion strategy in China, the Chinese governmental policies towards foreign companies attempting to acquire China’s natural resources impacted upon the firm’s cost during entering the market as they had to make use of channels for avoiding this entry barrier. Utilization of channels accompanied extra cost for the company and also in certain cases, the firm had to compromise with its business structure for reducing the entry barriers.
Again the case of Wal-Mart’s expansion strategy in Mexico had been highly impacted due to the trading situations between Mexico and the US resulting in various ...Download file to see next pagesRead More
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