OXXO fosters cooperation in key Latin American markets
Johnson is visited by Eduardo Padilla, CEO of OXXO, who engaged in a frank discussion with students about navigating Latin America.
OXXO, a convenience store chain with nearly 10,000 stores in Mexico and Colombia, has shown no signs of abating growth in those markets, explained Eduardo Padilla, MBA ’81 and CEO of the FEMSA Commercio division. Padilla told students at Cornell University’s Johnson Graduate School of Management in April 2012 that the approach of the company is to encourage greater teamwork.
This pervades the OXXO culture from store design to how bonuses are issued, with team performance being the focus. OXXO opens hundreds of stores every year, but the strategy is to increase same-store sales by understanding shopping patterns and introducing new, relevant, products to the chain. OXXO aims to meet two key needs to keep customers returning to their locations – legitimacy and relevance.
Padilla said OXXO’s analysis of 4 billion receipts to understand shopping patterns has led the company to identify shopping “occasions.” These include thirst, craving, time optimization, hunger, people gathering, daily allowances, and replenishments. OXXO cut prices on items associated with people gathering, daily allowances and replenishments to become competitive with the major box stores, leading to higher sales in all eight occasion areas.
The company’s collaborative culture has encouraged input from all divisions regarding store design to encourage greater relevance to customers, Padilla said, even at the risk of competitors gaining shared information. The environment of an organization dictates the behavior of employees, he said. OXXO wants to build the value of trust among employees and encourage them to be successful so they will be willing to be more ambitious and undertake initiatives.
When asked how he managed the culture of the organization as the CEO he stated that “being a boss is given to you, being a leader requires work and recognition of others talents.”