Competitive Advantages This paper will discuss the competitive advantages of Costco and Riordan Manufacturing. An analysis will be performed to expose which competitive advantages Riordan has in common with Costco. An estimate on which competitive strategies Riordan would use to improve innovation and sustainability of business operations domestically and internationally will be given. An explanation will also be presented to describe how the competitive strategies chosen may affect the sustainability of long-term performance and how the global market would affect the business strategy of Riordan. Like Costco, Riordan manufacturing generates greater sales and margin to optimize their investment. Riordan’s sales and product strategy has been proven effective through their pricing and product selection, which sustains their strategic goals and objectives. To retain their customers, they increase their sales through employee satisfaction. The exceptional customer service is implemented in order to satisfy their financial performance as part of their objective. This puts Riordan in the lead to achieve their goals and secure some of the largest accounts to increase their market. The value and the effectiveness of Riordan manufacturing is truly as effective using the SWOT analysis. They also exemplify ways to generate planned revenues with the delivery of their product, which in turn strengthens their competitive advantage. The structure of their plan is based on financial goals, action plans and objectives with reviews of their performance. Riordan is a plastic manufacturing company that could improve their business operations by producing innovative materials with environmental concerns in mind. These improvements in business practices will redesign their products, which will refine Riordan’s global strategy and opportunity to meet customer needs. The redesigning of their product will hence make them globally competitive and innovative. Riordan chose the pricing and product selection strategy because of the customer base they would attract. Like Costco, Riordan focuses on a certain group of customers. These customers are looking for and expecting a higher quality product. Different from the lower quality products that Riordan’s competitors are manufacturing. These higher end products cost more; however, the customer base prefers better quality over quantity. A higher percentage of the customer base is typically more willing and able to continue purchasing Riordan’s products on a regular basis even when the economy is poor. This type of strategy ensures Riordan a maximum growth opportunity when the economy is strong and a minimal impact on growth when the economy is weak. Focusing on the satisfaction of the customers is important to Riordan. High quality and satisfied customers are intertwined and cannot be accomplished individually. Linked to high quality and customer satisfaction is employee satisfaction. Riordan focuses on supporting their employees to help in the accomplishment of the company’s goals. To do this Riordan realizes to maintain employees the company must keep them happy to minimize the attrition rate. According to Caitlin H., Costco maintains annual employee turnover rate of 17% (Caitlin H., 2012). This is the same type of goal Riordan is trying to accomplish. By maintaining a low attrition rate, Riordan maintains a well-trained and experienced group of employees. This experienced group of employees helps to increase and maintain the efficiency of the Riordan Manufacturing Company. Riordan knows that it will cost more money in the long run to hire and train new employees, compared to keeping and maintaining current employees. The money saved is freed to use in other facets of the company. These employed strategies will save Riordan money, create and maintain a loyal customer base, and ensure the sustainability of the company no matter the condition of the economy.
The combining of historically separate and distinct markets that are national into a larger global marketplace is known as the globalization of markets. As with any form of globalization, a business will need to understand that there are international measurement issues. At Riordan Plastics, they began with an international measurement with hopes that they could prepare the company properly for the global market. The globalization of production is also known as the sourcing of a service or services from one location. That location can go around the world in order to take advantage of the differences in the national costs of things like factors and production in capital, labor energy, and also land.
There are some international measurement issues that include things such as historical comparisons, budget analysis, and also return on investments (Wheelen & Hunger, 2010). Dr. Riordan insisted on using the resources that were available as a tool to try and increase the organizations profits at the time the business was started. This was because when Riordan became an international business, the rate of return, and customer satisfaction were two factors that were most important. They also needed a good historical comparison and a proper budget analysis in order to help them maintain positive global success.