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How will the Joint Venture Kmart Survive in the Mexican Market - Essay Example

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How will the Joint Venture Kmart Survive in the Mexican Market

The Mexican customer(Harvard Business School, 1999) is mostly from the uneducated sector. Most of the parents force their children to leave school after having five years of education. This is because the parents need a helping hand to augment the small family income.
Since the ElPuerto de Liverpool and Kmart International have already agreed by signing the joint venture contract, the issue now is whether the joint venture will survive or not in until the next performance evaluation period. Since The Mexican customer behavior is different from the customer wants and needs of the American people, there is a need study what the company's next moves will be in order to survive.
El Puerto de Liverpool has signed a joint venture agreement with Kmart International to put a Kmart retail store in Mexico. Mexicans earn an average of United States $3.94 per day. The Managers in companies in Mexico are asking for a basic income of United States $ 10,000. This is because they come from rich families. Mexicans buy in small quantities daily from the butcher, fish shop, baker and street vendors due to their low income. Most of the working population of Mexico belong to the below fifteen year old age. It is customary for parents to stop sending their children to school. The children are asked to help work and feed the family. The advantage here for Kmart is that young people always prefer changes in procedures of doing things.
They prefer to while the time from 2:30 to 4:30 having siesta or snacks. They prefer fresh food and dislike frozen food. In the Canadian & US retail environment, people prefer to buy in big quantities in department stores and retail stores, often, once a week because food in the these countries are low priced. The Mexicans, Canadian & Americans prefer to buy food and other products from the United States. "If it is from the US, It must be better". Mexicans usually spend 38.75% of their total income purchasing Food. The rest of the money is spent on Drinks and tobacco.
K mart went bankrupt in Canada when NAFTA was implemented here. But at the same time, Walmart Canada was the number one in terms of sales in Canada. In fact, Kmart was not considered a threat to the market share of the other two retail stores in Canada.
We can evaluate the success of the joint venture by the sales and net income that it will generate. If the joint venture results in big sales, then the joint venture is a success. Another criteria for evaluating a joint venture is whether it has been giving taking care of the environment by not polluting the environment or taking care of its waste disposal system. Still another major criteria is whether it has adhered to Mexico's government rules and regulations. The last criteria is whether it has hired Mexican employees and thereby helping the unemployment situation of Mexico. By hiring Mexican employees, it has helped Mexico economically and socially. By following the rules and regulations of Mexico it has accomplished the political requirements of the company.As to whether to put in place one, two or more stores immediately or one stores every month, the recommendation is to start first with a test project. The test project is ...Show more

Summary

El Puerto de Liverpool and Kmart International of the United States have signed a joint venture agreement to put Kmart, Mexico. The Chief Executive Officer is thinking how he will put the plans of operating a Kmart in Mexico. He is deciding whether to hire people from Mexico or get Americans, He is analyzing whether to use the American style of retail marketing(Strickland, 1999), or implement another marketing strategy(Collins & Devanna,1992)…
Author : simonisdavon
How will the Joint Venture Kmart Survive in the Mexican Market essay example
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