Value Chain

Topics: Value chain, Strategic management, Value Pages: 2 (743 words) Published: June 5, 2014
Value Chain Analysis-Costco Corporation
Brief on the Organization
Costco is among the leading global retailers which provide customers a wide range of merchandise, ranging from small to well-known brands. The company began operations in 1983. Over the years, Costco has been a retailer in low cost membership-only leader, in warehouse club of merchandise. Moreover, Costco does not offer frills warehouse business models as its competitors do.  Costco’s major competitors are BJ’s Wholesale Club and Sam Club (Costco, 2010). Applying the tools presented in this SSP, Costco provides a detailed analysis for transforming business operations relative to industry rivals. This is done in order to create profits and attain maximum shareholder’s value. A close examination of Costco’s Value chain suggests that the company uses a utilitarian approach, which maximizes the benefits for all stakeholders. The Concept of Value Chain and Information Technology Impact Nowadays, competitive advantage mainly derives itself through information technology in business models. Therefore, such supportive activities as information systems, R&D or general management are usually the most important source of differentiation advantage. Technology innovations continue to shape Costco’s value chain. Through information technology, Costco obtains strategic significance by changing the way companies operate. The most important concept is the value chain an organization has entrenched itself in; incorporating communication increases cooperation which leads to the productivity process of connecting groups that create activities toward a value system. Costco usage of the smartphone applications is only used to make personal judgments and predict purchases. Costco utilizes social media platforms to enhance online shopping. The company continues to offer online shopping to its members. However, customer’s privacy is at risk using the smartphone data, and the corporation...

References: Costco (2010). Why Become a Member.
Gilmartin, B. (2014). Costco Earnings Preview: Superb Execution, Perennially Overvalued
 Mascarenhas, O
Porter, M. E., & Millar, V. E. (1985). How information gives you competitive advantage.
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