Comprehensive Case----What’s Ahead for Costco? 1. 1) Costco is the largest U.S. membership warehouse club player with nearly one-half of total U.S. warehouse club sales. The firm’s no-frills, self- service, members-only clubs are positioned well to attract both business seeking to buy in bulk and individual consumers hoping to discover a great deal while stocking up for home.
2) Because the firm has a treasure-hunt environment A multi-channel retailer, Costco operates warehouse clubs; Costco Business Centers, which carry only merchandise catering to small businesses; and Costco Home, which is a furnishings-and-furniture outlet. Costco gains additional sales through its E-commerce Web sites and catalogs. 2. TNS Retail Forward’s market positioning model provides a good framework for understanding Costco’s strategy. Identifying the company’s market strategy objectives: target customers, core goods and services, core competition, and key appeals. Successful market positioning depends on the execution of the six keys: merchandising; pricing; promotion; customer service; location and physical facilities; and organization, systems, and processes. 3. 1) Because Costco offers a limited number of sku’s, inventory is brought through payment terms rather than through working capital.
2) Costco offers a selection of quality name brands at lower prices than traditional competitors. An important element of the company’s merchandising strategy is to carry only those products on which it can provide its members with significant cost savings. 4. Manufacturers that refuse to accommodate Costco’s demands for lower prices may find themselves displaced by a similar Costco private-brand product, which may sell just as well or better than the manufacturer’s brand. 5. It relies on creating “buzz” or word-of-month recommendations. 6. With regard to its physical facilities, Costco has been quite flexible at adapting its club size and product offerings. And it will build more market share in different countries. It will open larger-than-average formats to accommodate recent merchandise initiatives. That is the goal of the company and by taking the steps that they have in the past twenty years they are establishing and growing a successful retailer that will allow for more opportunities in the future. It continues to open larger-than-average formats to accommodate recent merchandise initiatives. 7. Strengths -- 1. Import various goods to foreign countries, make the product variety , choose the more naturally than general retailers
2. A large number of replenish onr's stock, can be a lot of cost reduction, reflected in On the price
3. The offer to try to eat, can taste the flavor of the ingredients, customer first, prompt consumers to buy
4. Due to the import of American goods, attracted some love with beauty Domestic customers
5. Special goods, more can't see on market, competitive compared
Weaknesses – 1 some family and small family may be less likely to store visit 2. Some fresh food is also very large packaging, don't sell, Or get eaten, it would be easy to broken
3. Because of the membership, lose non-members of the customers 4. A lot of imported goods is made in Taiwan did not, on the maintenance may can't find the suitable parts
Opportunities -- 1 combine with nearby stores for a business circle, increase set force
2. in recent years, more and more consumer preference for American goods
3. with the circulation network popularization, the network popular group in recent years
4. In recent years, the Internet free flow of information spread, consumers can quickly accept the commodity information, and facilitate the order.
Threats -- 1Tend to have fewer social population, and dinks scale year after year Less demand growth, great packaging
2. The industry competition is intense, trade with super low price to sell, At the product profit, vicious competition 3. Not only the counterparts, importers and businesses are also competitors hand.