A) In my opinion Costco uses integrated cost leadership/differentiation strategy. Several key aspects to discuss, prices employees and business model.
First and foremost, prices, Costco prices products 14% or below the actual cost of goods, recycles products every several months to provide greater verity if the product is not selling as well. In addition, Costco moves the products in the store to force the customers to go on a so called Easter egg hunt effectively introducing customers to new products. In addition, more frequent customers could elect for the more expensive $110 membership that allows for a 2% cash return at the end of the year from all the shopping done at Costco trough out the year. Such a move effectively eliminates the membership costs, but increases the sales of the items otherwise customer would not purchase in large quantities. Such pricing and product selection invites different walks of life to the store. In the store persons could purchase bargain products along with high end products such as TVs, Grills jewelry at much discounted prices. Inevitably differentiating itself from the competitors.
Second, employs, because it is considered the happiest company to work for employees are staying and working for the company …show more content…
The model entails that the membership allows a person access to goods and services otherwise not available in other retail outlets. This allows the customer to buy products in bulk, have access to rear luxury goods and much better discounts. Low prices allow for more offensive competition, and low overhead for less money spent per each club. Each register has 2 employees one ringing up the product the other boxing the product in the boxes to cut on the time spent at the register (perhaps the most annoying part of shopping in general). Although Costco is not valued as a high earnings company it excels in amount sold throughout the year on consistent
First and foremost, prices, Costco prices products 14% or below the actual cost of goods, recycles products every several months to provide greater verity if the product is not selling as well. In addition, Costco moves the products in the store to force the customers to go on a so called Easter egg hunt effectively introducing customers to new products. In addition, more frequent customers could elect for the more expensive $110 membership that allows for a 2% cash return at the end of the year from all the shopping done at Costco trough out the year. Such a move effectively eliminates the membership costs, but increases the sales of the items otherwise customer would not purchase in large quantities. Such pricing and product selection invites different walks of life to the store. In the store persons could purchase bargain products along with high end products such as TVs, Grills jewelry at much discounted prices. Inevitably differentiating itself from the competitors.
Second, employs, because it is considered the happiest company to work for employees are staying and working for the company …show more content…
The model entails that the membership allows a person access to goods and services otherwise not available in other retail outlets. This allows the customer to buy products in bulk, have access to rear luxury goods and much better discounts. Low prices allow for more offensive competition, and low overhead for less money spent per each club. Each register has 2 employees one ringing up the product the other boxing the product in the boxes to cut on the time spent at the register (perhaps the most annoying part of shopping in general). Although Costco is not valued as a high earnings company it excels in amount sold throughout the year on consistent