The legal entanglements that come from hard-fought battles to prevent the opening of Wal-Mart stores adds to the companys cost structure, which in turn compromises its ability to deliver on its primary differentiating feature. These costs are something we at Acme hope to avoid, as we feel that we are contributing to Mexicos economy by providing quality jobs and making possible knowledge transfer.
The case of Wal-Mart in Mexico is valuable for Acme was we prepare to move into Nuevo Laredo. It illustrates both the opportunities and risks that come from entering into foreign markets. The Mexican market is large, rapidly growing, and with a strong middle class. We at Acme Motors have substantial competitive advantages that can be won by entering this market. The combination of affordable Mexican labor and our well-developed techniques and systems will help Acme become more profitable. Furthermore, it will also give us a gateway into the Mexican market. Firms like Wal-Mart have shown conclusively that American business acumen and systems can be applied successfully to the Mexican market. Moreover, we feel that the cost advantages we will gain from setting up in Nuevo Laredo will restore Acmes strength.
The move into Mexico is a win-win situation for Acme Motors. There are going to be challenges, of course. Mexican workers will need to receive more training in Acmes work systems. There may be language and cultural barriers. Moreover, unlike Wal-Mart, we do not wish to be seen as cultural imperialists. In fact, we see this relationship as mutually beneficial, wherein Acme provides good, stable, well-paying jobs in exchange for the opportunity to reduce costs and enter a new market.
We expect there will be knowledge transfer as well, and this will benefit the Mexican economy. The same happened with Wal-Mart – most Mexican supermarkets have now adopted Wal-Marts purchasing and distribution techniques in order to streamline their own businesses.
Thus, we feel that while there may be some short-run costs associated with setting up in a new country, we also believe that the long-run benefits will greatly outweigh those costs. Our move into Nuevo Laredo is a bold step to securing the future of Acme Motors, and we trust that you will understand the benefits of this move. A proper partnership with the citizens of Mexico will allow Acme to not only receive substantial benefits from our investment, but to give significant benefits back to our new host country.
No author. (2008). Wal-Mart celebrates 50 years of contributions to improve the quality of life for Mexican families. Wal-Mart. Retrieved October 26, 2008 at http://walmartstores.com/FactsNews/NewsRoom/8588.aspx
Diaz, Cyntia Barrera & Lopez, Gabriela. (2007). Wal-Mart stock slide a sign of short-term turbulence. Reuters. Retrieved October 26, 2008 at http://www.reuters.com/article/consumerproducts-SP/idUSN3034873320070530
Orlandi, Lorraine. (2005). As Wal-Mart expands in Mexico, opposition grows. San Diego Union-Tribune. Retrieved October 26, 2008 at http://www.reuters.com/article/consumerproducts-SP/idUSN3034873320070530
Carlsen, Laura. (2004). Wal-Mart vs. The pyramids of the sun and moon. Counterpunch. Retrieved October 26, 2008 at http://www.counterpunch.org/carlsen10152004.html.