Question

Which AAA strategies did Grupo Bimbo utilize in the US? Which AAA strategy should be the dominant strategy for Grupo Bimbo US going forward?  

Answer 1

Grupo Bimbo’s globalization challenges :
Industry competition: highly fragmented and competitive industry structure, with different players in different countries

Demand patterns: Consumption habits heavily influenced by cultural legacy, demographics, tastes, fashion (e.g. low-carb diets in the US) and price sensitivity

Distribution Networks: retailers bargaining power and location, country geography, transportation infrastructure, as well as labor relations affect distribution chain and costs.

Administration: regulatory frameworks wary widely among countries for labor relations, new business registration

AAA strategy: Adaption, Aggregation and Arbitrage

Grupo Bimbo utilized Adaption (local responsiveness) strategy in US while increasing its operations in US (it is actually headquartered in Mexico).

Mexico and the United States share a common border on the northern side. Despite their close physical proximity and Mexican adaptations to western styles, lots of dissimilarities are observed in the culture, beliefs, traditions and norms of social conduct of the people in these two countries. A vast majority of Mexican people use Spanish language. In fact, Mexico is the country which has the largest Spanish speaking population in the whole world. On the other hand, English is the most popular language among the Americans. However, the Spanish language is the second most common language in the United States after English. Mexican foods are famous all over the world. They are very appetizing because of their flavors as well as the use of colors and decorations. Americans have a large variety of styles of cooking. Most of their traditional cuisines have undergone a sea change over a period of time, due to the influence of various immigrant communities.

Going forward, it should utilize Aggregation (economies of scale) as it looks to expand in US.