How Is Costco Successful Compared To Their Competitors

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.

Costco and Sam's Club Introduction There are so many stores where people can get their groceries and basic needs. Where do you get your groceries from? Out of all the stores Costco and Sam's Club are the mainstream ones with a variety of products. Costco and Sam's Club share many similarities and differences when it comes to their membership, environment/food court, and customer service/experience. Membership Costco and Sam's Club both offer memberships and to shop in the stores or online you must have a membership.

Keeping costs low allows for the deeper discounts that attract their members. Costco has avoided placing stores in high rent areas such as near malls and it keeps cost down by offering a no frills shopping experience with concrete floors and no unneeded decor. Another cost saver is limiting store hours of operation. All of this supports the goal of “take care of our members”.

They also have fresher foods and being a competitor for places like McDonalds and Taco Bell. According to

Maybe they will be able to create smaller supermarkets and hardware stores that still give reasonably cheap prices but they, in my opinion, will not be the same booming stores they

They also market Yoplait, El Paso, Bisquick and Betty Crocker which are very strong brands. One criticism that I have for this company is that it is very dependent on the US Market for the bulk of its sales. They have a growing international presence but I think that they should be stronger. The one competitive issue that such a company has is a great deal of private labeling. The retailers that sell their products are

 Why has Loblaw’s strategy been successful? Loblaw success can be attributed to its efficient operations, its customer loyalty programs, the popularity of its private label brands, and large-scale purchasing efficiencies. Loblaw has showed a good understanding of the Canadian grocery market due to its time-tested strategy. The company has presence in virtually all Canadian provinces with a tailored value chain that helps them achieve high revenue and standards. Additionally Loblaw offers competitive wages and benefits.

In Costco’s macro-environment, a variety of factors could affect the company’s economic viability. External factors such as inflation, foreign currency exchange rates, levels of unemployment, reduced consumer confidence, and changes in tax policies could unfavorably affect the demand for Costco’s products and services. Prices of some goods and services including food products, are often variant and subject to fluctuations deriving from changes in domestic and foreign supply and demand, competition, taxes, labor costs, or delays in delivery which could significantly affect Costco’s sales. Therefore, the product’s costs and selling could also increase affecting financial results. Other important economic factors include the increasing international

If Costco were to enter the market in Cyprus, the company would first have to ensure it offers products and services that align with the needs and lifestyles of Cypriots. Geopolitical Analysis         Cyprus lies in the eastern

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.

Key Trends – Globalisation One of the main opportunities Costco has is more global expansion to specific targeted countries. Although operating in many countries, Costco is heavily dependent on the U.S. and Canadian markets. It still has the opportunity to expand into the Asian and Australian markets where it has a limited presence. Costco has the capability to operate about 100 stores in Taiwan, Korea and Japan combined and about 20 stores in Australia. It currently has 41 stores in Taiwan, Korea and Japan combined and 6 stores in Australia.

3.0 Concepts 3.1 Resources and Capabilities In order to achieve and sustain competitive advantage, a business needs both resources and capabilities. Resources are assets that are owned or employed by an organization. The organization utilizes and uses these assets to carry out their business operations. Resources can be grouped either tangible assets or intangible assets.

Costco’s business model is centered around offering a smaller range of products at incredibly low prices which attracts the consumer. In order to supplement this lowered profit margin, they require their shoppers, both businesses and individuals, to purchase annual memberships. The membership fee accounts for a majority of the company’s profit. Furthermore, Costco operates its under a wholesale warehouse style which eliminates the need for excess handling and workers in the store. The stores are stocked to carry certain big ticket, ‘limited time offer’ goods so that customers feel the need to take advantage of the deal because it may not be there when they next return.

Specifically, Ralph’s (similar stores are Vons and Albertson’s) and Whole Foods (similar stores are Gelson’s and Trader Joes) are two firms that utilize cost leadership and differentiation. On one hand, we have Ralph’s using cost differentiation by providing a broad range of merchandise at a decent price. On the other hand, we have Whole Foods that has implemented a differentiation strategy by marketing their merchandise as healthier (organic). The trade of for both companies is that they are attracting less consumers by just marketing to a specific crowed. For instance, if Whole Foods had lowered their price and still sold premium merchandise, soon Ralph’s would be in trouble.

Costco is high aggressiveness retail firms due it sells