Case 4: Competition Among the North American Warehouse Clubs: Costco Wholesale Versus Sam’s Club Versus Bj’s Wholesale

1771 Words Aug 3rd, 2012 8 Pages
Case 4: Competition among the North American Warehouse Clubs: Costco Wholesale versus Sam’s club versus BJ’s Wholesale
Jriya Palanachsuk

Southern New Hampshire University
July8, 2012

Competition among the North American Warehouse Clubs: Costco Wholesale versus Sam’s club versus BJ’s Wholesale
Case Summary According to the case, in the year 2010, the nearly $ 125 billion discount warehouse and wholesale club segment of the North American retailing industry concluded of the tree major competitors, which are Costco wholesale, Sam’s Club (both of them belongs to Walmart) and BJ’s Wholesale Club. The three warehouse clubs operated no- frills, self service big box facilities where customers could choose from relatively narrow
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Five Force Model To talk about Porter’s Five Force analysis, the components of Five Force model are Threat of new
entrance, Customer bargaining power, Bargaining power of supplier, Threat of
substitute product and servicer, Intensity of competitive rivalry. The companies need to worry about industry competitors and fix the problem that might come from intensity of competitive rivalry and substitute product and servicer. These two factors bring stress to the companies. However, the companies do not need to worry much about the another three components of five Force model which are Threat of new
entrance, Customer bargaining power, Bargaining power of supplier.
Industry rivalry There is a wild competition among three of them Costco, Sam’s Club and BJ’s wholesale. As we know from the book, active rivals may compete one another to differentiate their products by providing better performance features or higher quality customer service and so on. In this case, the competitors strive to get the better or higher product quality and sell them at lowest prices in the best location possible. Also, the problem occurs from the customer, which is low switching cost. The customers are not required to spend a lot if they want to switch the brand. Thus, the company needs to find the best way to keep their customers.

Threat of
substitute product and servicer This is a very serious problem that brings

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