Question

Francisco Martínez is CFO of Comercial Mexicana SA, a retail chain in Mexico. Commenting on Walmart's entry into Mexico, Mr. Martínez notes, "I buy 20,000 plastic toys, and Walmart buys 20 million. Who do you think gets them cheaper?" Which strategic principles are evident in this comment?

A) Walmart's buyer power and cost leadership
B) Walmart's barriers to entry and differentiation
C) Walmart's loose bricks and switching costs
D) Walmart's focused differentiation and supplier power
E) Walmart's discount policies for customers

Answer 1

The strategic principles evident in Mr. Martínez's comment are Walmart's buyer power and cost leadership.

Step-by-step explanation:

The strategic principles evident in Mr. Martínez's comment are Walmart's buyer power and cost leadership (Option A). Walmart's massive scale allows it to negotiate lower prices from suppliers, giving them a significant advantage in purchasing power. This allows Walmart to offer cheaper prices to customers compared to their competitors.