Costco, Sam's, and Bj's Wholesale

2. Do all three warehouse club rivals—Costco, Sam’s, and BJ’s Wholesale—have highly similar strategies? What differences in their strategies are apparent? Does one rival have a better strategy than the others? Does one rival have a somewhat weaker strategy than the other two?

Outwardly, it might appear that Costco and Sam’s have similar strategies. However, upon close inspection it’s apparent that the firms are uniquely organized and employ differing strategies for success. Where Costco supplies customers with bulk items at low prices, they capture consumers through a best value strategy. Sam’s, however, passes savings along to consumers by procuring their products from third world, low-labor cost countries like China and Mexico and therefore pursues a strategy of low-cost. Finally, BJ’s, which operates on a much smaller scale, is concentrated and capitalizes on a focused strategy of offering their consumers a greater variety of products and in smaller quantities. In terms of strategy, it is my opinion that Costco employs the strongest approach, through cross-docking and efficient distribution. Further, the fact that this firm is less dependent on foreign countries for reaching performance margin demonstrates the firm’s ability to be agile and responsive to changing market conditions. BJ’s employs the weakest strategy among the three N.A. Warehouse Clubs, because they are localized in comparison to their rivals, do not benefit from the economies of scale realized at competing firms, and consequently have thin sales and profit margins.

4. Does the data in case Exhibit 5 indicate that Costco’s expansion outside North America (the U.S. and Canada) is financially successful? Why or why not?

Yes, because the compound annual growth rate is 10.24% for total revenue and 18.20% for operating income for the five year period.

Date Total Revenue Operating Income Warehouses CAGR

2005 $ 3,155.00 65 30 12.96%

2006 $...