Costco

9- How well is Costco performing from a strategic perspective? Does Costco enjoy a competitive advantage over Sam’s Club? Over BJ’s Wholesale? If so, what is the nature of its competitive advantage? Does Costco have a winning strategy? Why or why not?

The stronger the company’s overall performance, the more likely it has a well-conceived well-executed strategy. In other words a good strategy and a good execution must result in a good performance. Costco is performing well from a strategic perspective, as demonstrated in the case they have strong value proposition to the costumer and doing well on the profit formula. Over all to have a proper performance evaluation we should conduct a balance score card analysis to see how did the financial and other strategic objectives feed into the success of Costco, but for now we well have a general look at Costco’s performance as we go.

Costco’s good performance can be read through many indicators, like its growing profit margin rates, growing sales rates, growing market share, costumer growth rate, growing reputation and image, some financial indicators like ROI, net profit, credit rating. Many financial and non financial indicators that reflected the company’s overall excellent performance are there to look at.

It is well known now that Costco’s competitive advantage is a result of its unique business model, the table bellows demonstrate the main competitive advantages that Costco have taking into consideration the VRIN tests:

• Constant commitment to low mark up, low prices

• Membership model

• Quality control

• Privet labeling products

• Treasure Hunt

• Supply chain management

• Low cost

• improve its customer experience by implementing kind return policies, accepting several payment methods, and adding gift prizes

• Building design and size

• Other services… one stop shop

• Costco’s Entrepreneurial l spirit, constant innovation

• Costumer Services due to employees welfare, wages and benefits

• High...