Costco Organizational Theory and Behavior
1. What is Costco’s competitive advantage?
Costco is incessantly outperforming corporations such as Target and Wal-Mart. The company has reported great and impressive financial results from one financial quarter to the next whereas Target and Wal-Mart are dealing with a lull in business. All of this comes down to Costco’s competitive advantages. One of these competitive advantages is the focus on driving sales (Lutz, 2014). Whereas its rivals spend significant amounts in marketing, Costco does not go to great extents in advertising but rather retails a limited number of items. In spite of the company’s massive store volume, it has been renowned for selling a fraction of the brands in rival companies. The key competitive advantage in this lies in the fact that retailing fewer items leads to an increase in sales volumes and aids in driving discounts. Furthermore, Costco’s concentration on driving sales aids in elucidating why the company offers better remunerations and benefits compared to competitors (Lutz, 2014).
Costco’s competitive advantage is also found in the value gained from membership. The warehouse club's members pay for the pleasure of shopping there and that generates a hard-to-break hoop that profits the company. Essentially, paying for membership reinforces the consumer’s linkages to the brand whereas the underlying value proposition either leads to an increase in usage levels or generates guilt on leaving. As a result, this gives...
References
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Kline, D. B. (2017). What Is Costco's Competitive Advantage? The Motley Fool. Retrieved 15 October, 2018 from: https://www.fool.com/investing/2017/03/17/what-is-costcos-competitive-advantage.aspx
Lutz, A. (2014). Costco's Simple Strategy For Outperforming Wal-Mart And Target. Business Insider. Retrieved 15 October, 2018 from: https://www.businessinsider.com/costcos-simple-strategy-2014-9?IR=T
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Research and Report for Costco What is Costco’s Competitive Advantage? Costco’s competitive advantage lies in the value attained from membership. The warehouse club's members pay for the desire of shopping there and that produces a difficult to disrupt circle that profits the company. In essence, paying for membership strengthens the customer’s associations to the brand while the fundamental value proposition either gives rise to an upsurge in usage levels or creates onus
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