After the interesting class we had about mercadona, i think is very important to talk to you about a big company in Mexico, named: OXXO.
Oxxo haves an interesting story, at the beginning OXXO was founded in Monterrey in 1977, following a FEMSA marketing plan to use company-owned stores to promote and market the Cerveceria Cuauhtémoc beer brands. This distribution method bypassed the traditional Mexican network of local wholesalers, in the first stores, the only products sold were beer, snacks and cigars. The success of the stores was such that the project kept growing and OXXO built new locations rapidly, becoming a ubiquitous presence in Mexican cities. In 1998, the 1000th store was opened. On July 6, 2011 was announced the opening of the 9000th store, established in Oaxaca.
Today OXXO operate the largest and most profitable convenience-store chain in Latin America—OXXO. With 11,700 stores strategically located in all over Mexico and now in Colombia, OXXO is the largest nationwide seller of Coca-Cola products in the country. In 2012 OXXO was opening 3 stores a day.
The commercial and marketing strategy of OXXO is to suit consumers’ needs, offering consumers convenient services such as nearby locations, 24 hour service in most cases, fast and comfortable shopping experience, easy access, and the ability to pay utility bills directly at our stores, the possibility of paying flight tickets from Viva Aerobus and Volaris airlines in its over 11,700 stores, and now the customers can make deposits to debit cards for most of the Mexican banks.
OXXO Business Model focuses on developing key competencies, such as:
- Store segmentation according to the specific needs of the local customers.
- Price strategies that enable points of sale to compete with supermarkets, thus increasing revenues and traffic in the stores.
- Alliances with suppliers to achieve better purchasing terms and greater credit.
- Inventory optimization and waste reduction.
- Utilization of consumer information gathered through sales-point systems.
- Constant reduction of the average expense per store.
OXXO Numbers as December 31, 2013.
And talking about Logistics, OXXO has 16 distribution centers which are strategically located all around Mexico to support OXXO’s business operation, FEMSA Logístic is currently the supplier of 100% of the operation of distribution in Mexico to all its stores, in charge of the administration of a dedicated fleet. The challenge of operating the OXXO distribution network is in transporting the goods to all establishments caring for service, quality and cost of deliveries.
Solution came from the design of a specialized vehicle for retail; and operationally it covered the delivery of goods from the Distribution Centers to the stores, the administration of “Cross-Docks” to minimize costs and make more efficient deliveries; dynamic routing and restructuring of delivery points with the use of advanced technology tools.
Here is a video explaining a little bit what OXXO is.