Competition between Emerging Market and Multinational Firms: Wal-Mart and Mexican Retailers

We analyze how competitive dynamics within the Mexican retail sector have shifted following the entrance and ascendance of Wal-Mart, and how Mexican retailers have responded individually and collectively to Wal-Mart's dominance. We discuss implications for strategic management and international business research as well as for managers of emerging market firms that face dominant foreign competitors. Within fifteen years of entering Mexico, Wal-Mart has become the dominant retailer and controls a larger market than all its rivals combined. Rival Mexican retailers have responded collectively via legal action and a purchasing cooperative as well as individually via heterogeneous individual responses, which include focusing on entering the United States market, altering positioning in the Mexican market, and identifying ways to become more competitive in terms of prices and localization of offerings.