Costco Case Study

1896 Words 8 Pages
Register to read the introduction… Costco has fewer warehouses but greater sales and revenues. Costco customers also shop at Costco more frequently than Sam’s Club customers and, on average, spend more each visit as well. Costco’s dominance may be the result of better innovation. Costco offers luxury items and was the first to sell fresh meat and produce, and gasoline. This is important because innovation is a key factor in assessing competitors in an industry.
Last, Wal-Mart is also in direct competition with large supermarket retailers. Production capacity in the grocery industry is quite populated and Wal-Mart poses a serious threat to many supermarket retailers, both large and small. Because the industry is so crowded, even the large supermarket retailers are seeking to differentiate themselves in order to stay afloat.
There is a very broad base of customers and a significant demand for low prices. Last, the threat of new entrants is weak. Wal-Mart has a scale of operation that is so great, it would take years, maybe even decades, for a new company to be on the same level. Even prominent companies today would have an extremely difficult time matching the costs and prices Wal-Mart
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Other departments include but are not limited to stationary and office supplies, hardware, home improvement, paint supplies, arts and crafts, cosmetics and toiletries, shoes, books and magazines, greeting cards, and confectionery. Wal-Mart has also encroached into home electronics, automotive supplies, pharmaceuticals, jewelry sales, photo finishing, travel planning, and home gardening. More recently Wal-Mart has begun to move into the grocery store business with its new "Neighborhood Markets." Everywhere the store has a department, it competes with those businesses, which specialize in that sector, often putting smaller competitors out of business. Wal-Mart can be judged by the fear it puts into its potential competitors and by the uproar caused by them protesting a Wal-Mart incursion, as is the case with grocers.

4) Do you agree with his/her solution?

Yes. The company's competitive strategy is to dominate every sector where it does business. It measures success in terms of sails and dominance over competitors. Its strategy is to sell goods at low process, outsell competitors, and to expand. Generally, Wal-Mart does everything it can to win over competitors.

5) If yes, why, if not, also why

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