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What changes, if any, should Grupo Bimbo make to its global strategy in order to be more successful internationally?

Grupo Bimbo’s global strategy is experiencing growing pains at different international markets but I think it’s natural and makes sense for them to go global given that they already have a huge market share in their domestic market. In order for Grupo Bimbo to be more successful internationally, they need to follow the changing consumer demand patterns and customize their products to match to the different cultural tastes and preferences. The production and distribution processes need to be more flexible and not just simply follow the process that they have in Mexico. As long as they have the continued stream of cash flow coming from the cash cow, Mexico, Grupo Bimbo should continue to implement its global strategy to expand and adjust to the challenges that other markets present.

What changes should they make in the US market?

Because of the high proportion of unsold inventory in the US supermarkets, as high as 14%, compared to the Mexico supermarkets, margins are being cut. This could be due to the high competition and not enough of a recognizable core brand in the US. This problem could potentially be solved by increasing marketing and branding so that they be distinguish themselves a bit more from their competitors and thus reducing that unsold inventory.

Grupo Bimbo should also reduce the number of products that it offers in the US. Some products simply do not fit the taste of the majority of Americans other than Mexican immigrants. Grupo Bimbo should rationalize and drop some of their product offerings. It should continue to research and assess what products could work in the US before mass producing and distributing.

Lastly, Grupo Bimbo experiences the same issues with the labor unions just as their competitors. It’s a big issue in the US because labor unions are common and breaking them down is usually very challenging. If possible, Grupo Bimbo need to hire consulting services like DSA to market a series of post-IO conversion services in order to decrease costs and increase margins.

What changes should they make to improve profitability in Brazil?

In Brazil, the problems facing Grupo Bimbo is not as severe. Grupo Bimbo has already learned much from their mistakes. They have started to offer products that are suitable to its citizen’s tastes, started to learn and work more with the hypermarkets that dominate the region, and work independent sales people to distribute its products across the country. The thing that I think it could do better is by competing with the artisanal breads but producing the same, if not better quality and it has done in Mexico and mass producing and distributing these products.

Should they remain in China, and if so how should they pursue long-term profitability?

Yes. Grupo Bimbo has learned from much of its mistakes from the other global expansions and have carefully crafts its expansion strategy for China. They should continue to improve on productivity and research on the Chinese consumer tastes. Given that there are also no dominate players in the bread market in China, Grupo Bimbo should continue to market and brand itself while work out better distribution and pricing plans for its products.

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