Download file to see previous pages...
As for pricing, the major strategy of Costco is that their prices should be for sure lower than those of the competitors. The company sells its products at prices 15-20% lower than other retailers or department stores. The philosophy of the organization is that while other companies are trying to sell at higher prices, Costco should be always finding ways to sell even cheaper.
The business believes the major advantage of this strategy is that, first of all, in such a way they offer value. Secondly, this allows to make sure there will be no competitors in their niche – the company makes its prices so low that nobody else can enter their market. Thirdly, the goal of low prices is not only to sell today, but to be building a brand and a system that will be in the market for years. So, though shareholders’ income might not be as high as that of the rivals, Costco is aiming at long-term income instead of short-term financial success.
The major distribution channels of the company are its warehouses, to which people come and choose products to buy. Another source of sales is their web-site, which allows to buy items that might not be available at the warehouse. Another advantage of the web-site is speeding up the sales process. For example, a customer may upload photos into the online photo center and pick the pictures at the local warehouse in about an hour. Selling at warehouses allows to company to save on fancy retail stores, salespeople, space rent fees and other attributes of traditional distribution. In addition, the warehouses’ working hours are shorter that those of other retailers, thus allowing Costco to save on labor.
However, thought the company seems to be pretty successful, it is exposed to certain risks related to both the country’s economy and the company’s operations mode and strategy. According to Costco, among the greatest risks of the company is strong competition – Costco competes with a great number of retailers, department
...Download file to see next pagesRead More
The enterprise is capable of functioning at limited gross margins and proffering least prices as compared to the traditional proprietors. The Costco has maneuvers all these through distinct fast inventory turnover, greater quantity purchases and self service abilities without frills that incorporates producing larger quantities and attractive product brands and names to the customers (Thompson, 2008).
Center of discussion in this paper is Costco as a wholesale merchandise corporation having a large network of warehouses spread along different regions in the European and Asian markets. The company earns competitive advantage in conducting sales of both branded and private label products at highly competitive prices across the different global regions. \
Costco company deals with various activities in assorted countries and is devoted in offering their customer quality services at affordable prices. The company provides a range of merchandise and storage departments that are designed to make shopping exercise enjoyable because it ensures the guarantee of satisfaction to its customers.
There is a constant movement of items and sometimes confuse the price tags and disorient regular customers. This may mislead customers and they may be embarrassed when they are making payments at the teller. The store is fairly clean and the items are generally well organized and tidy. Similar items are located in close proximity hence this makes things easier for the customer.
Costco has now expanded its operations to European, Asian and African economies because of its fairly sustainable global business strategies. Indeed, the company has adopted the strategy of adaptation of its American products or brands in which it alters
There are certain strategies that can be implemented by the management of Costco in order to hedge its declining position.
Since Costco is operating at very low margin they cannot afford to charge credit cards and incur high
The company has a good future since it has opportunities to penetrate into new markets.
Costco is a membership warehouse club whose core aim is to bring its members the best prices on brand-name merchandise. Costco provides a diverse selection of merchandise, and the
Secondly, Costco has successfully implemented the best cost provider strategy by offering high quality products, at a relatively lower price, compared to competitors in every market that it serves. These offensive strategies
es have discovered the need to have highly effective and motivated workers to steer the growth and success of a company; this is why, most businesses are relying on their human resource department in order to develop effective strategies that for empowering their