Costco Team Paper

Competitors and Their Business Models

Two of Costco’s competitors are Target Stores and Sam’s Club (Wal-Mart). The business model for Target Stores is good customer service and striving to be traditional when it concerns its retail business. Target Stores prides itself in their excellent financial standing and their tremendous growth and profit potential. They capture high profit margins by having strong private label brands. They have a knowledgeable business management and have the ability to adapt to changing times. Target Stores is one of the only companies to incorporate simultaneously price leadership and differentiation as its strategic model.

Sam’s Club’s (Wal-Mart) business model is a little different. They use advanced satellite based IT systems for inventory and shelf management. Most suppliers require payment of goods within 30 days. This is the norm, but Sam’s Club has a “float-pay” with suppliers in which they pay their suppliers in 90 days. The product normally sells within seven days. “Float” is basically a three month interest free loan. Sam’s Club has distribution centers where the goods are not stored. The goods are transferred by truck to retail outlets within hours of receipt from the factory. Another part of their business model is the financial services they provide for their customers. The money centers offers services such as check cashing, bill payments, and money transfers.

Security Issues

To protect customer’s privacy, Target Stores uses cookies to provide what they

call the 1-Click feature that allows purchasing and storage of items in cart between visits.

They also use cookies for reporting and analysis purposes to evaluate the performance of their

marketing efforts. The Target website has SSL (Secure Sockets Layering) that encrypts

personal info before it travels over the Internet.

Sam’s Club also has SSL in their website and they also have a digital certificate from

Verisign, Inc. to protect...