Openness and Industrial Response in a Wal-Mart World: A Case Study of Mexican Soaps, Detergents and Surfactant Producers
This paper uses a case study approach to explore the effects of NAFTA and GATT membership on innovation and trade in the Mexican soaps, detergents, and surfactants (SDS) industry. Several basic findings emerge. First, the most fundamental effect of the NAFTA and the GATT on the SDS industry was to h...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2006/08/7014508/openness-industrial-response-wal-mart-world-case-study-mexican-soaps-detergents-surfactant-producers http://hdl.handle.net/10986/9303 |
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okr-10986-93032021-04-23T14:02:41Z Openness and Industrial Response in a Wal-Mart World: A Case Study of Mexican Soaps, Detergents and Surfactant Producers Javorcik, Beata Keller, Wolfgang Tybout, James BENCHMARK BORDER CROSSING BORDER CROSSINGS BOTTLENECKS BRAND BRAND NAMES BRANDS CAUSTIC SODA COMMERCIAL POLICY COMPETITIVENESS CONGESTION CONSUMER PREFERENCES CONSUMERS COST OF TRANSPORT CROSSING DEBT DEVALUATION DEVELOPMENT POLICY DIESEL DIESEL FUEL DOMESTIC MARKET DRIVERS DRIVING DUMPING ECONOMETRIC ANALYSES ECONOMIES OF SCALE ENVIRONMENTAL REGULATIONS ENVIRONMENTALLY FRIENDLY ALTERNATIVE ESTABLISHED BRAND EXPORT GROWTH EXPORTS FREE TRADE FUEL CONSUMPTION HIGH LEVELS INDUSTRIAL SECTOR INFLATION INFLATION RATES INPUT PRICES INSPECTION INTERNATIONAL TRADE INVENTORY LATIN AMERICAN LAUNDRY MARGINAL COST MARGINAL COST PRICING MARKET ACCESS MARKET ENTRY MARKET ENTRY COSTS MARKET SHARE MARKETING MONOPOLY NATURAL RESOURCES PRICE ADJUSTMENTS PRICE CHANGES PRICE INDEX PRICE INDICES PRODUCT QUALITY PRODUCTION COSTS PRODUCTION EFFICIENCY PROFIT MARGINS RAIL RETAIL RETAIL PRICES RETAILING SAFETY SODIUM SOUTH AMERICAN STRUCTURAL CHANGE SUBSTITUTE SUBSTITUTION SUPPLIER SUPPLIERS SUPPLY CHAIN TARIFF BARRIERS TOTAL SALES TRADE BARRIERS TRADE LIBERALIZATION TRADE REFORMS TRANSPORT TRANSPORT COSTS TRANSPORT ECONOMICS TRANSPORTATION TRANSPORTATION COST TRANSPORTATION COSTS TRUCKS TRUE VEHICLES WAREHOUSES WASHING WHOLESALERS This paper uses a case study approach to explore the effects of NAFTA and GATT membership on innovation and trade in the Mexican soaps, detergents, and surfactants (SDS) industry. Several basic findings emerge. First, the most fundamental effect of the NAFTA and the GATT on the SDS industry was to help induce Wal-Mart to enter Mexico. Once there, Walmex fundamentally changed the retail sector, forcing SDS firms to cut their profit margins and innovate. Those unable to respond to this new environment tended to lose market share and, in some cases, disappear altogether. Second, partly in response to Walmex, many Mexican producers logged impressive efficiency gains during the previous decade. These gains came both from labor-shedding and from innovation, which in turn was fueled by innovative input suppliers and by multinationals bringing new products and processes from their headquarters to Mexico. Finally, although Mexican detergent exports captured an increasing share of the U.S. detergent market over the past decade, Mexican sales in the U.S. were inhibited by a combination of excessive shipping delays at the border and artificially high input prices (due to Mexican protection of domestic caustic soda suppliers). They were also held back by the major re-tooling costs that Mexican producers would have had to incur to establish brand recognition among non-Latin consumers and to comply with zero phosphate laws in many regions of the U.S. 2012-06-27T13:56:55Z 2012-06-27T13:56:55Z 2006-08 http://documents.worldbank.org/curated/en/2006/08/7014508/openness-industrial-response-wal-mart-world-case-study-mexican-soaps-detergents-surfactant-producers http://hdl.handle.net/10986/9303 English en_US Policy Research Working Paper; No. 3999 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Mexico |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
BENCHMARK BORDER CROSSING BORDER CROSSINGS BOTTLENECKS BRAND BRAND NAMES BRANDS CAUSTIC SODA COMMERCIAL POLICY COMPETITIVENESS CONGESTION CONSUMER PREFERENCES CONSUMERS COST OF TRANSPORT CROSSING DEBT DEVALUATION DEVELOPMENT POLICY DIESEL DIESEL FUEL DOMESTIC MARKET DRIVERS DRIVING DUMPING ECONOMETRIC ANALYSES ECONOMIES OF SCALE ENVIRONMENTAL REGULATIONS ENVIRONMENTALLY FRIENDLY ALTERNATIVE ESTABLISHED BRAND EXPORT GROWTH EXPORTS FREE TRADE FUEL CONSUMPTION HIGH LEVELS INDUSTRIAL SECTOR INFLATION INFLATION RATES INPUT PRICES INSPECTION INTERNATIONAL TRADE INVENTORY LATIN AMERICAN LAUNDRY MARGINAL COST MARGINAL COST PRICING MARKET ACCESS MARKET ENTRY MARKET ENTRY COSTS MARKET SHARE MARKETING MONOPOLY NATURAL RESOURCES PRICE ADJUSTMENTS PRICE CHANGES PRICE INDEX PRICE INDICES PRODUCT QUALITY PRODUCTION COSTS PRODUCTION EFFICIENCY PROFIT MARGINS RAIL RETAIL RETAIL PRICES RETAILING SAFETY SODIUM SOUTH AMERICAN STRUCTURAL CHANGE SUBSTITUTE SUBSTITUTION SUPPLIER SUPPLIERS SUPPLY CHAIN TARIFF BARRIERS TOTAL SALES TRADE BARRIERS TRADE LIBERALIZATION TRADE REFORMS TRANSPORT TRANSPORT COSTS TRANSPORT ECONOMICS TRANSPORTATION TRANSPORTATION COST TRANSPORTATION COSTS TRUCKS TRUE VEHICLES WAREHOUSES WASHING WHOLESALERS |
| spellingShingle |
BENCHMARK BORDER CROSSING BORDER CROSSINGS BOTTLENECKS BRAND BRAND NAMES BRANDS CAUSTIC SODA COMMERCIAL POLICY COMPETITIVENESS CONGESTION CONSUMER PREFERENCES CONSUMERS COST OF TRANSPORT CROSSING DEBT DEVALUATION DEVELOPMENT POLICY DIESEL DIESEL FUEL DOMESTIC MARKET DRIVERS DRIVING DUMPING ECONOMETRIC ANALYSES ECONOMIES OF SCALE ENVIRONMENTAL REGULATIONS ENVIRONMENTALLY FRIENDLY ALTERNATIVE ESTABLISHED BRAND EXPORT GROWTH EXPORTS FREE TRADE FUEL CONSUMPTION HIGH LEVELS INDUSTRIAL SECTOR INFLATION INFLATION RATES INPUT PRICES INSPECTION INTERNATIONAL TRADE INVENTORY LATIN AMERICAN LAUNDRY MARGINAL COST MARGINAL COST PRICING MARKET ACCESS MARKET ENTRY MARKET ENTRY COSTS MARKET SHARE MARKETING MONOPOLY NATURAL RESOURCES PRICE ADJUSTMENTS PRICE CHANGES PRICE INDEX PRICE INDICES PRODUCT QUALITY PRODUCTION COSTS PRODUCTION EFFICIENCY PROFIT MARGINS RAIL RETAIL RETAIL PRICES RETAILING SAFETY SODIUM SOUTH AMERICAN STRUCTURAL CHANGE SUBSTITUTE SUBSTITUTION SUPPLIER SUPPLIERS SUPPLY CHAIN TARIFF BARRIERS TOTAL SALES TRADE BARRIERS TRADE LIBERALIZATION TRADE REFORMS TRANSPORT TRANSPORT COSTS TRANSPORT ECONOMICS TRANSPORTATION TRANSPORTATION COST TRANSPORTATION COSTS TRUCKS TRUE VEHICLES WAREHOUSES WASHING WHOLESALERS Javorcik, Beata Keller, Wolfgang Tybout, James Openness and Industrial Response in a Wal-Mart World: A Case Study of Mexican Soaps, Detergents and Surfactant Producers |
| geographic_facet |
Latin America & Caribbean Mexico |
| relation |
Policy Research Working Paper; No. 3999 |
| description |
This paper uses a case study approach to explore the effects of NAFTA and GATT membership on innovation and trade in the Mexican soaps, detergents, and surfactants (SDS) industry. Several basic findings emerge. First, the most fundamental effect of the NAFTA and the GATT on the SDS industry was to help induce Wal-Mart to enter Mexico. Once there, Walmex fundamentally changed the retail sector, forcing SDS firms to cut their profit margins and innovate. Those unable to respond to this new environment tended to lose market share and, in some cases, disappear altogether. Second, partly in response to Walmex, many Mexican producers logged impressive efficiency gains during the previous decade. These gains came both from labor-shedding and from innovation, which in turn was fueled by innovative input suppliers and by multinationals bringing new products and processes from their headquarters to Mexico. Finally, although Mexican detergent exports captured an increasing share of the U.S. detergent market over the past decade, Mexican sales in the U.S. were inhibited by a combination of excessive shipping delays at the border and artificially high input prices (due to Mexican protection of domestic caustic soda suppliers). They were also held back by the major re-tooling costs that Mexican producers would have had to incur to establish brand recognition among non-Latin consumers and to comply with zero phosphate laws in many regions of the U.S. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Javorcik, Beata Keller, Wolfgang Tybout, James |
| author_facet |
Javorcik, Beata Keller, Wolfgang Tybout, James |
| author_sort |
Javorcik, Beata |
| title |
Openness and Industrial Response in a Wal-Mart World: A Case Study of Mexican Soaps, Detergents and Surfactant Producers |
| title_short |
Openness and Industrial Response in a Wal-Mart World: A Case Study of Mexican Soaps, Detergents and Surfactant Producers |
| title_full |
Openness and Industrial Response in a Wal-Mart World: A Case Study of Mexican Soaps, Detergents and Surfactant Producers |
| title_fullStr |
Openness and Industrial Response in a Wal-Mart World: A Case Study of Mexican Soaps, Detergents and Surfactant Producers |
| title_full_unstemmed |
Openness and Industrial Response in a Wal-Mart World: A Case Study of Mexican Soaps, Detergents and Surfactant Producers |
| title_sort |
openness and industrial response in a wal-mart world: a case study of mexican soaps, detergents and surfactant producers |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2006/08/7014508/openness-industrial-response-wal-mart-world-case-study-mexican-soaps-detergents-surfactant-producers http://hdl.handle.net/10986/9303 |
| _version_ |
1764406455059873792 |