Costco's Value Chain Analysis
Costco is an international retailer with 474 locations in 10 countries. Costco warehouses present one of the biggest and most high-class product category selections to be found under single roof. Costco takes advantage of online and mobile commerce and it is identified best practices in global e-commerce management. This report indicates Costco’s mission and vision, organizational structure, and their strength and weaknesses of competitive position, and performance evaluation, which is identified financial analysis. Moreover it includes identification of environmental analysis which PEST analysis, SWOT analysis and Porter’s five forces analysis. Lastly, report shows evaluation of opportunity and implementation plan, which I recommend on organization …show more content…
• Though profitable, slower growth in sales
• Strong brand awareness
• Share market with recognized competitors
Value chain analysis is one of the fundamental elements of chain analysis.
In order to analyze the environmental aspects of Costco, PEST analysis will be used. The PEST analysis covers the analysis of Political, Economic, Social, Technological environments of a country with reference to a specific object. The Costco Warehouse Corporation’s PEST analysis as follows:
Political
Costco Wholesale Corporation’s business practices get influenced by the political environments of the host and the home countries where it carry outs its business. The company is providing high wage rate to its workers as a result of its agreement with the union bars and it has set different standards for its workers in its stores in spite of the political policies of a country. Due to its wage rate and policies concerning to it, the performance of the workers is far better than typical and the general performance of the company is very
…show more content…
It has a large network of business through the US and many other regions. These procedures are large scale procedures which occasionally delays the implementations of changes to bottom levels. It has huge stores for already aged markets in the US. Secondly, Costco does little or no proper advertising that means that the corporation is not receiving customers that it should have receive. Costco has very limited emphasis on its stores and the areas it covers. The meticulous decision making influence in its ability to more speedily respond to market conditions. Also maintaining high wage is weakness for Costco for example Costco’s average pay is $18 an hour, 43 percent higher than its competitor, Sam’s club.
Opportunities
Costco can expand its market in the many regions of the world specially the developing markets of China, Japan, and India. These markets display huge potential for growth of the firm. Also for it customers across the world it can start online business opportunities. The company is continually working on distribution channels to make it stronger and enter new prospective markets. Economic recession has allowed Costco opportunity for luxury-item deals, including the chance to retail prime-grade meat that used to go almost solely to restaurants.
Janmar Coating Case Analysis
2638 Words | 11 PagesThe company has been operating fine for years and total dollar sales have been increasing each year. If the company sticks to the status quo, they will continue to stay profitable. 2. Increase brand awareness
Costco's Macro Environment Case Study
149 Words | 1 PagesIn Costco’s macro-environment, a variety of factors could affect the company’s economic viability. External factors such as inflation, foreign currency exchange rates, levels of unemployment, reduced consumer confidence, and changes in tax policies could unfavorably affect the demand for Costco’s products and services. Prices of some goods and services including food products, are often variant and subject to fluctuations deriving from changes in domestic and foreign supply and demand, competition, taxes, labor costs, or delays in delivery which could significantly affect Costco’s sales. Therefore, the product’s costs and selling could also increase affecting financial results. Other important economic factors include the increasing international
Marketing Strategy: Trader Joe's Business Strategy
1120 Words | 5 PagesFocusing on the needs of the buyer is also a focus of the firm, they can create products that specifically cater to the needs of their customers. This can be seen when the begin rotating season goods for their customers or bringing in more natural foods due to trends involving customer fitness and eating healthier foods. This strategy is appropriate, this was the firm’s original strategy when it was founded in the late 60s, and it hasn’t changed all that much. The corporate-level strategy resembles that of an organic growth strategy. Rather than opting for an external approach and follow say an Amazon by acquiring Whole Foods to enter the business, Trader Joe’s has followed an internal approach for their corporate-level strategy.
Cutco Direct Marketing Strategy
554 Words | 3 PagesCutco has targeted the high end of that market and created a corporate culture based on maintaining the highest quality standards. In the marketing strategy employed by Vector marketing, the company that manages the sales force for Cutco, customers have the ability to share their personal stories of family and times when their Cutco product has helped or served them. Thousands of customers have written stories to the company to express how their products have affected their lives, it is these stories that create lifetime customers and appeal to other consumers when looking for what they want. Vector calls this the friends of friends approach to marketing and it is very successful in this case as annual sales are over $200 million. I believe that there is more money to be had if they mass produce and used either retailer or wholesaler channels, but Cutco isn’t willing to sacrifice the quality for the
Johnson & Johnson Value Chain Analysis Summary
942 Words | 4 PagesJohnson & Johnson currently has a 10.4% market share of the Pharmaceutical Manufacturing industry. They have the second largest share of this industry, just behind Amgen at 10.9%. By looking at the revenue and operating income for Johnson & Johnson, we can see their margins and evaluate their performance. Johnson & Johnson’s operating profit margin improved from 2015 to 2016 but decreased significantly from 2016 to 2017. The operating profit margin for the company as a whole in 2016 was 28.72% and in 2017 it was 24.07% (Appendix A).
Costco Target Market Analysis
812 Words | 4 PagesMarket Segmentation: To be of value market segments must be measurable, substantial, accessible, differentiable, and actionable (Kotler & Keller, 2012). Segmentation of demographics for Costco is vast as the current product offerings include all genders, ethnicities, incomes. age groups, and social classes. When considering demographics, it is important to consider the average or typical characteristics of the target market. As mentioned earlier the target market or focus for this company is supplying the small- to medium-sized business and targets the middle- to high-end consumer with its private label brand Kirkland Signature.
Critical Analysis Of Costco
776 Words | 4 PagesKey Trends – Globalisation One of the main opportunities Costco has is more global expansion to specific targeted countries. Although operating in many countries, Costco is heavily dependent on the U.S. and Canadian markets. It still has the opportunity to expand into the Asian and Australian markets where it has a limited presence. Costco has the capability to operate about 100 stores in Taiwan, Korea and Japan combined and about 20 stores in Australia. It currently has 41 stores in Taiwan, Korea and Japan combined and 6 stores in Australia.
Costco's Competitive Strategies
729 Words | 3 PagesWhat are the two types of core competencies that drive a firm’s competitive advantage? Which firms demonstrate a clear competitive advantage because of (a) major value-creating skills/core capabilities and/or (b) superior assets or resources? Which firms have demonstrated sustainable sources of competitive advantage? The two core competencies that drive a firm’s competitive advantage are cost leadership and differentiation.
Operations Management Case Study: American Connector Company
2441 Words | 10 PagesMarket Positioning: Focus on differentiation via customization and generate higher margins vs. cost cutting to compete in the low cost category. 6. R&D upgrade: ACC needs to invest much more in technology to reduce losses as it has been 5 years since the last improvements were made. QUESTION 2 Q2: How big are the cost differences between DJC’s plant and ACC’s Sunnyvale plant?
Value Chain Analysis Of Ford Motor Company
1657 Words | 7 PagesQuestion 2: To do a resource-based analysis of any organization, it needs to go through different steps, first identify the three categories of the resources , the tangible ,intangible, and the human resources , second identify the capacity of the organization to put its resources for a desired end and in good use, third to decide on suitable strategy for the organization we need to do SWOT analysis to determine the organization strength and weakness compared to the competitors, third what are the key successful factors of the organization that can be determine by identifying the customers of the organization and their needs, and what the organization will do to survive the competition ( Hall&Keynes,2015) also audit analysis to Ford resources , and value chain analysis to Ford activities . In the next section, there will a brief explanation about the steps mentioned above , followed by an application to each step to, Ford motor which was incorporated in Delawae in 1919, it is a global automotive industry leader in Dearborn and Michigan, distributed vehicles across six continents the core business of Ford , designing and manufacturing cars, marketing , financing and servicing a full line of Fords cars, trucks, SUVs, and electrified cars, and Lincoln luxury car (Ford annual report,2015). Resource-based view (RBV) is an essential theory for strategic managers , considering the organization resources the assets , capabilities organization
Domino's Value Chain Analysis
1791 Words | 8 PagesThe Value Chain 4 4. Operations Strategy Implications (Store level) 5 5. Inventory Management and Demand Forecasting 9 6. Supply Chain Management 9 7. Quality Management 11 8.
Value Chain Analysis Of IBM
1674 Words | 7 PagesInternational Business Machines (IBM)- 1) Introduction IBM (International business machines) corporation is one of the biggest multinational computer technologies and IT consulting company spread over 170 countries with 330,000 employees. It has its headquarters in Armonk, New York, United States. IBM started its business on June 16, 1911. It is the manufacturer of computer parts for hardware and software and, consulting services and hosting services. And also offers services in infrastructure.
Value Chain Analysis Of Unilever
976 Words | 4 PagesThe value chain analysis indicates the firms that strive to create superior products or services through focused differentiation strategy. To ensure the activities are tailor to the strategy Value Chain is used. How each activity generates value and linked to the strategy in UFS? Table 4: Value Chain Analysis Primary Activities
H & M Value Chain Analysis Model
3035 Words | 13 PagesTerms of Reference H&M also known as Hennes & Mauritz is one of the most leading apparel companies globally; one of creativity and style. The company is one which believes that it should offer to its customers fashion and quality at the best price. The aim of this report is to assess H&M’s company organizational culture as well as the core competencies and capabilities of the company; and how it has used these to attain the position at which it is at today in the fashion and apparel industry.
Threat Of Five Pest Analysis Of Levi's Strauss
1107 Words | 5 Pages3.0 Value chain – primary activities 3.1 Value chain –support activities 4.0 PESTEL analysis of Levi’s Strauss PESTEL analysis module is which categories the environmental factors into key types. In this module Political, economic, social, technological ecological and legal factors are often
More about Costco's Value Chain Analysis
Janmar Coating Case Analysis
2638 Words | 11 PagesCostco's Macro Environment Case Study
149 Words | 1 PagesMarketing Strategy: Trader Joe's Business Strategy
1120 Words | 5 PagesCutco Direct Marketing Strategy
554 Words | 3 PagesJohnson & Johnson Value Chain Analysis Summary
942 Words | 4 PagesCostco Target Market Analysis
812 Words | 4 PagesCritical Analysis Of Costco
776 Words | 4 PagesCostco's Competitive Strategies
729 Words | 3 PagesOperations Management Case Study: American Connector Company
2441 Words | 10 PagesValue Chain Analysis Of Ford Motor Company
1657 Words | 7 PagesDomino's Value Chain Analysis
1791 Words | 8 PagesValue Chain Analysis Of IBM
1674 Words | 7 PagesValue Chain Analysis Of Unilever
976 Words | 4 PagesH & M Value Chain Analysis Model
3035 Words | 13 PagesThreat Of Five Pest Analysis Of Levi's Strauss
1107 Words | 5 Pages