This means that while the business is profitable, it is in a state of constant, intense competition. Firms such as Costco must develop a competitive culture, and constantly benchmark against themselves in order to stay ahead of the myriad of different competitors. The future of this business is only good if competitive advantages and strong brand equity have been established, as is the case for Costco. For them, the industry's competitive situation remains favorable, but only because of their established market position. That the industry has as many favorable characteristics as it does means that there will be more competition....
There are many retailing giants with the means to eliminate the barriers to entry and the creativity to establish new models. That the industry is favorable will attract these competitors and eventually this will be an unfavorable industry in which to operate, but for the immediate future, conditions are favorable for Costco.
Costco is a mass market retailer, focusing on a "warehouse club" business model. The company has a cost leadership strategy and this helps to characterize the firm's financial statements In terms of the critical ratios, the following table outlines the results for Costco for the 2012 and 2011 fiscal years: Costco Financial Metrics Liquidity Ratios Formula Current Ratio current assets / current liabilities Quick Ratio (current assets - inventory) / current liabilities Activity Ratios Receivables turnover Sales / Avg Accounts
Costco's business model is to undertake a cost leadership strategy. The company operates with a warehouse store concept. The warehouse store concept focuses on offering large volumes of goods at low prices. A typical Costco warehouse has a relatively low number of SKUs available, and any given product is usually only available in a single SKU. Consumers are attracted to the low prices associated with volume buying. Each store has
S. Just like people, corporations can have biases and even forms of ethnocentrism inherent in their cultures, a prime example of this being WalMart (Hammond, Axelrod, 2006). Clearly further analysis is necessary to understand why Costco struggles in other regions of the world, yet the company's financial performance on a global level continues to be exceptional due to the factors cited earlier. What is needed is for the company to concentrate
Moreover, controlling laws are in constant flux, making this area a particularly challenging one for the company. Despite these challenges, people always need groceries and Costco is ready to deliver the goods -- literally -- and these issues are discussed further below. Economic Although Costco enjoys a healthy share of its market, the company has not been immune from the Great Recession of 2008 as reflected in its historic stock performance
Wal-Mart faces an industry that is generally challenging, but its strength in the industry results in the industry being favorable. Wal-Mart's success is predicated on excellence execution of key components of the discount retail value chain -- procurement, logistics and merchandising. Wal-Mart has numerous strengths, but as befits the world's largest company it has relatively few weaknesses. In its intensely competitive businesses, Wal-Mart sees many threats, but there are still
The strategy outlines clearly the ethical position of the organization in relation to interactions between consumers and various stakeholders. This is essential in the enhancement of service and products provisions. The organization focuses on the adherence to the law through development and implementation this marketing strategy. This enhances effectiveness and efficiency of the legal interaction between consumers, shareholders, and stakeholders. The organization also pledges to take quality care of
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