Costco Versus Sam's Club

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Week 4: SWOT ANALYSIS
Jeffrey Tang
Professor Wong
September 28, 2012

CHANGE DIAGNOSTIC
The navigator basis of image has the control to navigate the company through external issues. Costco employs a divisional organizational structure that is nationwide and divided into three different divisions. Each division is controlled by an Executive Vice President and the regions are divided for the Senior Vice President. Costco opens its stores in different states such as the first time to open in South Carolina, “It’s pretty much spread like wildfire” (McMaster, 2001). One of the pressure for change was the economy and the recession that the businesses encountered and to be more strategic than its competitors to sell products as bulk to save money and make the consumer happy especially with large families. Sam’s Club does not have as much pressure as Costco would since Sam’s Club is a subsidiary of Walmart which is the largest retail store chain all across the world. “In this image, some, but not all, change intentions are achievable. Power, processes, interests, and the different skill levels of managers affect their ability to produce intentional change outcomes” (Ian Palmer 26). Costco and Sam’s Club are able to embrace the changes and the great outcomes by thousands of members who shop at the companies. Costco differ from other retail companies by the wholesale products that consumers can buy in bulk while still saving money in the long run even with the annual membership that Costco and Sam’s Club charges.

The other change manager at Costco and Sam’s Club is that they both utilize the highlights of the goals as a coach because the way training goes, both warehouse company focuses on not only delegating the work but actions leading with words. For example, when customers are shopping for a certain item and the manager trains the employees on the products, what’s coming in and what’s going out, and also following schematics to ensure customers that when they shop at each parenting store, the customers are able to find the product in any store and in any state.

One of the models that Costco and Sam’s Club seem to use is the 7-S Framework because the managers have goal sets, strategies and structure on how to train the employees and how they want the job to be performed. As a warehouse company, new products will arrive such as groceries and out goes the old because they are perishable. Based on the readings, “The 7-S Framework was developed by the McKinsey & Company consultants Robert Waterman Jr., Tom Peters, and Julien Phillips. It is based on the propositions that organizational effectiveness comes from the interaction of multiple factors and successful change requires attention to the interconnectedness of the variables. They characterize the factors into seven categories: structure, strategy, systems, style, staff, skills, and superordi-nate goals (Ian Palmer 125). The only bad thing about the 7-S framework is that its weakness is viewing at the external aspects because the products sold are not for just one type of demographic but more than one by offering different type of products and services.

SWOT Analysis
Since Costco and Sam’s Club are both huge warehouse retailers, each one has strengths, weaknesses, opportunities, and threats. Not only are the analyses internal, they are also external. Both have high employee retention because they do treat the employees well by offering above average salaries and great benefits. As for externally, both warehouse companies offer other products and services such as food courts, sell and install tires, gasoline, and business cards. As the class textbook says, “The Strategic Inventory involves a much more sophisticated analysis than that provided by the ubiquitous SWOT analysis (strengths, weaknesses, opportunities, threats). The danger with SWOT analysis is that it very easily becomes a listing not of strengths but “believed strengths,” not of weaknesses but...
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