Question: OF THE FOLLOWING TEXT, REWRITE/ WRITE A BETTER HYPOTESIS

Background

Fomento Economico Mexicano S.A.B. de C.V., better known as FEMSA is a multinational company that deals in the drinks industry, commercial sector and restaurant industry. The company dates back to 1890 when it was constituted in Monterrey, Mexico. FEMSA started their operations with the commercial chain of OXXO. It operates primarily in Mexico and other Latin American countries such as Brazil, Argentina, Colombia, Central America, Venezuela and Uruguay. It started its association with The Coca Cola Company in 1993 with the sole purpose of distributing their drinks in Mexico. It was until 1998 that FEMSA started to go public on the New York stock exchange. It was a decade after that in 2003, FEMSA closed a deal that made Coca Cola FEMSA the biggest Coca Cola bottler in Latin America (this deal was at that moment the biggest one closed by a Mexican company). On 2010, in search of a bigger part on the drink industry, FEMSA exchanges its total of its operations on the beer business for a total of 20% stake at the Heineken Company, one of the world leaders on this industry, having business with more than 70 countries all around the world.

Coca Cola Femsa has its headquarters in Mexico City. It employs around 320 thousand people all around the countries that it has business with. Coca Cola FEMSA is the largest Coca Cola distributor in the world by volume. It is managed by Jose Antinio Fernandez (chairman), John Santa Maria Otazua (CEO) and Eduardo Padilla Sliva (CEO of FEMSA). It has a revenue, as of 2019, of $194.2 billion dollars, a net income of $15.8 billion dollars and their total assets are worth over $13.3 billion dollars. Altogether their 2.8 million points of sale attribute FEMSA a total of 360 million consumers.

Problem definition

The "Conglomerado Fomento Econmico Mexicano" (Femsa) posted a net attributable loss of 1.93 billion Mexican pesos (US$92 million) in fiscal 2020, compared to a profit of 20.69 billion pesos (US$990 million) in the previous year, following the impact of the mobility restrictions imposed by the Covid-19 health contingency on the company's retail businesses.

As in all companies, an increase in profits rather than losses was expected in that year, but Covid-19 was not expected and therefore generated large losses, especially in the shopkeepers and grocer's sector. The pandemic provoked the company to accelerate the adoption of digitalization in its processes. Covid-19 has left great lessons for companies, especially when it is about the adoption of digital tools. Given this scenario, Coca-Cola FEMSA could not be left behind, and is now accelerating the rhythm to serve its customers and consumers with digital platforms.

Among the company's initiatives is that it is leveraging its digital capabilities, as is the case of taking multichannel orders via B2B platforms, contact centers and WhatsApp to respond to the demand for its products.

Coca-Cola Femsa, according to the pricing policy followed by the company, considered adjustments above inflation, which is too high, but due to the economic situation facing the country, they decided to be in line with the inflationary index. They wanted to face a stable environment in Mexico in terms of costs. It's also responsible for meeting the needs of its markets as well as satisfying consumer demand by offering more than 100 brands of soft drinks and beverages, being one of the world's public bottlers of branded beverages. Coca-Cola Femsa, according to the pricing policy followed by the company, considered adjustments above inflation, which is too high, but due to the economic situation facing the country, they decided to be in line with the inflationary index. They wanted to face a stable environment in Mexico in terms of costs.

Approaching the problem:

The unit of analysis is Coca-Cola Femsa's attempt to go digital. The result of the success is the increase in sales. 1. The pandemic did not sit well with anyone, sales were quite good before the health contingency, but when it arrived sales went down and also business efficiency. 2. At the beginning, as with everything unknown, it was not very well accepted by some and was difficult for others. 3. All the Shopkeepers were driven to have to join the digitalization, as it would be the new strategy due to the pandemic. 4. They had very strict prices above the inflation level but due to the pandemic and the economic situation of the countries they had to catch up with the inflation rate.

Research questions:

1. How did covid-19 affect the shopkeepers?

2. How did it affect Coca-Cola Femsa's strict pricing?

3. Will there be greater consumption in this stage of digitalization?

4. Will they feel more comfortable being able to monitor their products and have instant responses to any inconvenience?

Hypothesis

The digitalization of services will allow Coca-Cola Femsa to increase its sales, as well as speed and attention.