What is competition like in the North American wholesale club industry? Which of the fi ve competitive forces is strongest and why? Use the information in Figures 3.4, 3.5, 3.6, 3.7, and 3.8 (and the related chapter discussions on pp. 57-70) to do complete five-force analysis of competition in the North American wholesale club industry. 2. Do all three warehouse club rivals—Costco, Sam’s, and BJ’s Wholesale—have highly similar strategies? What differences in their strategies are apparent? Does one rival have a better strategy than the others? Does one rival have a somewhat weaker strategy than the other two? 3. Which of the three warehouse club rivals has been the strongest financial performer in recent years? Support your answer with calculations based on the data in case Exhibits 2, 6, and 7. Use the financial ratios presented in Table 4.1 of Chapter 4 to help you with the needed number crunching. 4. Does the data in case Exhibit 5 indicate that Costco’s expansion outside North America (the U.S. and Canada) is financially successful? Why or why not? 5. Five years from now, is Costco’s standing as the industry leader likely to be stronger or weaker? Are the other two rivals likely to gain or lose ground on Costco? Why or why not? 6. What recommendations would you make to Jim Sinegal regarding the actions that Costco management needs to take to sustain the company’s growth and improve its financial performance? 7. What actions do you think management at Sam’s Club should take to boost revenue growth and overall financial performance? 8. What actions do you think management at BJ’s Wholesale should take to boost revenue growth and overall financial performance?
1. What is Costco’s business model? Is the company’s business model appealing? Why or why not?
Business Model is used to exemplify the methods and ways which we used to generate planned revenue. The Costco’s business model is to generate high sales volume and rapid inventory turnover by offering low prices on limited selection of national branded and select private-label products in wide range of merchandise categories. Costco’s offers these products to their members who are of two types’ business members and gold star members. This business model is tempting because it gives a test to Costco’s management to continue to devise strategies and methods through which they can keep hold of existing members and catch the attention of new members. Otherwise they will suffer failure because there will be a risk that discontented members will not renew their membership. This business model takes company towards total quality management.
2. What are the chief elements of Costco’s strategy? How good is the strategy?
Strategy is the organization’s pre selected means or approach to gaining its goals or objectives, while keeping in view current and future external conditions. Costco’s strategy’s elements are: • Low prices
• Limited product lines and selection
• Treasure hunt shopping environment
By keeping low prices Costco’s is following cost leadership strategy which is good because on this base they can compete with their competitors. By limited product lines and limited selection they are offering limited 4000 items which are less as compared to its competitors. Costco’s is adopted market development strategy by capturing new markets for existing products. By treasure hunt shopping environment they provides such product at low prices to its members which they believe will not be available in next visit. This works as an incentive and members try to take maximum advantage and therefore Costco’s sales volume increases. At Costco’s warehouse products are not offered in every size. The strategy they followed is that by offering every size their efficiency will decrease therefore it is said intelligent loss of sales.
Posted by Zita Mac. | Posted Date: 8/7/2011 12:04:29 PM
3. Do you think Jim Sinegal is an effective CEO? What grades would you give him in leading...
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