2 PAGE CASE ANALYSIS The main issue of Costco vs. Sams article is the management efficiency. By comparing two companies retailing strategies, author gives us a clue of what might be the reason for Costco, being one step ahead of its competitor. Industry Analysis. Two largest companies Costco and Sams Club, represent the wholesale retail business in U.S. Both were founded in 1983, but while Costco founders had to start it from the scratch, Sams Club assets heavily depend on Wal-Mart stores network. Although in U.S. Costco has only 312 warehouses, comparing to Sams Club 532, it nevertheless managed to come up with larger income in year 2003.
The competition between two companies is very intense and recently they both started to expand internationally, in order to increase their efficiency. The unique problem facing Costco is to retain its upper hand in competition with Sams Club, while Sams Club main goal is to become more efficient, by adopting proper customer targeting strategy. Company Profile: Costcos product lines consist of 423 warehouses worldwide, from which 312 located in U.S. It retains leading position in wholesale business on U.S. market. Costcos financial position isnt as good as it used to be in 2000, when companys general income was bigger than Sams by 30%, still by the end of year 2003, Costco had 5% more sales ($34.4 billion comparing to $32.9 billion).
The Term Paper on Sam Wal Company Walmart Department
Walmart is a highly successful discount store based in whole on its founders beliefs and convictions. Sam Walton wanted to make a difference amongst the retail dynasty. A great foundation was implemented for his customers, associates, and community. These beliefs are what today still keeps the store sky rocketing to successful measures. Walmart first department stores opened in a small lower ...
The operational condition of Costcos warehouses network is defined by its high efficiency. This is caused primarily by employees salaries depending on companys well-being and relatively small number of products, stored in warehouses. Company uses state-of-art technology in its retailing operations as well as in its stock market activity. Every wholesale store is fully computerized, which makes it easier to sort through numerous merchandises with different brand names. Costcos personnel are highly motivated to maintain their high performance level. The entry position salary a Costco is 10 dollars an hour. Employees also enjoy many health care benefits, unlike those who work for Sams Club.
Costcos structure is defined by its marketing strategy. The wholesale stores are mostly located on outskirts of large cities. The companys headquarters is in Seattle. Costcos production capacity accounts for about $112 million dollars, generated by one average store in one year. Company encourages its managerial staff to make independent executive decisions, which is the main reason behind Costcos commercial flexibility. The weakness of this approach is that it will inevitably lead to many wrong decisions being made by managers, because they primarily use intuition, as main principle of their work. Brief SWOT: The Companys present strategy is defined by targeting well-off customers as its main principle. Many expensive brand name products can be bought at Costco, which provides a substantial price discount.
Also, company has limited variety of products. This increases warehouses operations effectiveness. The main Costcos goal is to increase its sales by increasing the effectiveness of its retailing operations. In my opinion, Costcos present goals and strategies are appropriate. At the end of year 2003, the average sales per square foot in its warehouses were $797, comparing to $497 at Sams. This, of course, wouldnt happen if companys target marketing strategies werent adequate.
Recommendation: It appears to me that Costco will have to come up with new marketing strategy very soon. So far, companys success accounted for its ability to try new things, this was automatically putting Sams Club in disadvantaged position, because the best this company could do to compete with Costco, was imitating its retail practices. This trend has to be maintained, even at cost of new marketing strategies having chance to fail. I would suggest that company begin to target Sams Club customers with very aggressive advertisement. The best way to accomplish this is to lower annual fee rates down to 15-20 dollars. To do this, Costco will have to cut on its employees various work benefits.
The Research paper on CASE STUDY ON STRATEGIES OF SALES AND MARKETING FOR BUDGET HOTELS
Sales & Marketing department of any hotel is the lifeline of the hotel. It is the department which ensures that the hotel stays in the news (for positive activities), has near 100% occupancy at rates which add to the bottom line of the hotel Balance Sheet. In a nutshell, Sales & Marketing department is responsible for bringing the business to the respective hotel by way of – Occupancy ...
There is no doubt in my mind that this will benefit company in the long run, as it will attract new customers and undermine Sams Club efforts to increase its profits at the same time..
