This was the first time that Walmart operated internationally under a CEO who spent most of his life in the United States. Sam Walton was known as an indigenous business man who wanted all of his employees to think how to improve and develop the company. There was no reason to change this mind set and go arrogantly into a
new market not paying attention to the Mexican customers’ needs and preferences.
Henry Davis, the CEO of Cifra, was a born Mexican who was sent by Cifra to study at Harvard University. Therefore he knew both life styles: the US and the Mexican. In 1991 when Walmart negotiated with Mexicans biggest retail market Cifra there where political negotiations ongoing weather there will be a free-trade agreement
between the United States. “Cifra’s president, Henry Davis, said that the prospect
of
free trade between the two countries helped make the deal attractive.” By founding
the joint venture Walmart avoided to compete against an already established local company that had highest market shares. Walmart now had a local guide who showed them ho
w to sell products in Mexico and a direct reach to Cifra’s costumers.
After the initial joint venture “Walmart had set up several other joint ventures with its Mexican partner […]”. In 1997 all these joint ventures merged with Cifra. “Wal
-Mart then took a controlling, 51 percent stake in Cifra for $1.2 billion. The company
thereby held a majority stake in the largest retailer in Mexico […]” and the name
changed to Wal-
Mart de México y Centroamérica –
which can be seen as an expansion into the whole Central American region