By using a Big Picture framework (Exhibit 9), we can analyze the facts and strategies of the company and how the company is executing their strategies. We can also gain knowledge of overall corporate and marketing strategy of Costco. Let’s take a look at each module. Business Objective: We are already aware that our Fundamental Entity will be Costco and Costco’s current goal is expanding the business simultaneously by providing high quality products and goods to the members at low potential prices or wholesale as a core competence. In addition to providing low prices on good quality products, Costco struggles to be a value advantage to all societies where they do business. Marketing Objective: Costco is also known as one of the largest wholesale club in the market and Costco has a very good customer base. However, younger generation is not part of the customer base so currently, Costco performing acquisition activities dedicated to acquiring new younger consumers and steal consumers from the industry. …show more content…
By recognizing the group of customers it will make them more responsive for company’s marketing strategies. Currently, Costco’s main variable under segmentation is demographic variable (age, education, gender, income, household, marital status). As discussed above, Costco’s concentration to the steal younger generation of the industry. Product: Costco provides their members low prices on specific private and a limited category of branded products in the high range of merchandising segments. Costco’s private brand which is Kirkland Signature is well known for its value and quality. Costco makes a good percentage of their sales from private labels. Main products are books, electronic gadgets, furniture, outdoor living, apparel, jewellery, and food and
Do you like shopping? Both Costco and Sam’s Club are very popular stores. They are both in the top ten biggest retailers in the world. They bring in a ton of money to the people that own them. They are both Warehouse Clubs, which means they are massive stores that require a membership to enter.
I would put Costco, Sam’s club and Amazon in formalization stage, collectivity stage and elaboration stage respectively. Since the Costco success because of its discipline, but it has been slow to expand into new areas. Sam’s club focused on digital, more specific, in mobile app, but it hired only decision scientists for the membership team, which means it needs for delegation with control. I Would classify Sam’s strategy as focused differentiation, because Sam made a major investment in digital and it cuts private brand down to one in order to push its suppliers to innovate which is different with others. Although the strategy has indeed increased the sales of Sam’s club and make it convenient, but it is not enough to beat amazon and Costco,
The strategic limitations which are often faced by membership clubs such as Costco, Sam’s Club and BJ’s wholesale club include, aggressive marketing of other retail firms, a limit to the total number of customers by being membership-only clubs and warehouses, and the increasing growth of internet retailers. Although these membership clubs do face a few limitations, each club offers a plethora of benefits which significantly outweigh the limitations they face. For example, Costco’s competitor Walmart may implement a variety of marketing advertisements for name brand paper towels such as Brawny, Bounty, and Viva, but consumers say Costco’s house brand, Kirkland, is just as good if not better than name-brand competitors and is offered at great prices. With this, aggressive marketing may have the potential of limiting some customer decisions to choose non-membership retailers over membership clubs; however,
Lauren Ryan Professor Buckingham GEOG 123, Section AN 8 December 2014 Costco: A Cut Above the Rest Introduction Costco Wholesale Corporation, in terms of their business practices and ethical standards, stands out above the rest. From the beginning, the owners, James Sinegal and Jeffrey Brotman, decided they wanted to avoid the corrupt practices associated with globalizing. No company is completely free from or unaffected by globalization; but Costco has done a pretty good job being fair in all of its transactions and affairs. From when it started to where it globalized, Costco’s process for globalizing and the reasoning behind it have made them not only a great company but also an incredibly successful company.
When it came down to marketing and advertising Costco strategy is to maintain direct mailing and keeping marketing expenses low. Their growth strategy is to expand their company
Introduction: The following is a situation analysis for Costco Wholesale Corp. Key issues are noted, and recommendation is provided. Current Situation: The discount membership concept was pioneered by Sol Price, who opened the Price Club in 1976. Jim Senegal got his start in retail working at Price Club at the early age of 18 loading mattresses.
National brands as well as store brands Costco provides a mix of national brands and store brands for their customers. National brands, also known as manufacturers brands, are goods that are designed and produced by the vendor and sold to many different retailers. The vendor is then tasked with maintaining the product’s quality and developing the product’s brand image through various marketing activities. Store brands, however, are designed and produced by the retailer. The retailers is responsible for designing, developing, producing the products they place in their stores.
Costco is an international retailer with 474 locations in 10 countries. Costco warehouses present one of the biggest and most high-class product category selections to be found under single roof. Costco takes advantage of online and mobile commerce and it is identified best practices in global e-commerce management. This report indicates Costco’s mission and vision, organizational structure, and their strength and weaknesses of competitive position, and performance evaluation, which is identified financial analysis. Moreover it includes identification of environmental analysis which PEST analysis, SWOT analysis and Porter’s five forces analysis.
• They are not properly engaged in work when compare to Costco.
Market Segmentation: To be of value market segments must be measurable, substantial, accessible, differentiable, and actionable (Kotler & Keller, 2012). Segmentation of demographics for Costco is vast as the current product offerings include all genders, ethnicities, incomes. age groups, and social classes. When considering demographics, it is important to consider the average or typical characteristics of the target market. As mentioned earlier the target market or focus for this company is supplying the small- to medium-sized business and targets the middle- to high-end consumer with its private label brand Kirkland Signature.
Abstract Motivation is the process through which people are stimulated to increase their actions and performances to accomplish the set goals for an organization or a company. Costco, a retail store created a culture that motivates its employee to keep coming back to work. The stimulating key factors for Costco employees are desire for getting more pay, opportunities for promotion, ability to be treated with respect by the headship of the company as family, and recognition by the customers to provide good customer service at low price. This paper has not only discussed the strongest motivational factors for Costco employee, but it equally suggested another motivational system that can allow employees to select their valued benefits from a list
• Efficient staff • Promote from within whenever possible (98%) • Resources to execute crafted strategy • Contributory Offerings-Optical, gas station, pharmacy • Explicit policies and standard operating procedures • Organization of work effort and workflow • Information and operating systems-Relevant reporting of data • Motivation and Rewards-Bonuses • Corporate and company culture success by word of mouth • Internal leadership at the branch level • Evaluating Performance and Initiating Corrective Adjustments • Added more membership options to augment sales growth • Added contributory profit centers to increase consumer repeat trips to store • Added website sales to highlight higher end offering private label • Observations and/or examples • Costco created and stuck to a
Costco is a leader in the warehouse member club market. They specialize in selling bulk groceries and using their immense buying power to help get savings on items and then pass those savings on to their members. They opened their first warehouse in Seattle in 1983. Costco is unique amongst retailers because they only mark their products up 15 percent (Inside Costco CNBC). In terms of the wholesale club market segment, Costco is one of only three main players.
What are the two types of core competencies that drive a firm’s competitive advantage? Which firms demonstrate a clear competitive advantage because of (a) major value-creating skills/core capabilities and/or (b) superior assets or resources? Which firms have demonstrated sustainable sources of competitive advantage? The two core competencies that drive a firm’s competitive advantage are cost leadership and differentiation.
How are recruiting, job design, and organizational strategy at Frito-Lay Linked? How does one influence the other? Frito-Lay created a metric for each position; this metric links organizational strategy and job design which enables HRM to recruit the right people for the right job. Frito-Lay’s goal or organizational strategy is to increase sales volume by getting additional display space in high traffic areas and create a highly structured job for RSRs that included carefully planned driving routes to minimize driving time, stocking procedures, and utilization of the truck.