Public Domain Costco Wholesale Corporation maintains its position as the second biggest retailer in the world through successful operations management OM. The 10 strategic decisions of operations management tackle the operational concerns in various areas of the business.
The company now has operations in overseas locations, such as Taiwan.
The firm is among the biggest retail organizations in the world today. As a retail firm, Costco depends on consumer purchasing capacities. Consumer perceptions also have a significant impact because competition is high in the retail market.
Competition from firms like Walmart is especially notable. Costco must maintain competitive advantage to ensure long-term viability. At present, the ability of this company to continue growing and expanding is based on its affordable quality goods and services.
Costco Wholesale uses its business model to follow its mission statement. Costco uses a membership-only warehouse club business model. In this model, consumers pay a membership fee to access the low-cost products available at Costco stores.
Non-members may accompany members, but only members are allowed to purchase in these stores. This strategy entails maintaining the lowest prices possible. Retail giants like Walmart also use the cost leadership strategy.
The company has very attractive low prices on practically every good or service offered in its stores and on its website. Costco has rapid inventory turnover combined with high sales volume, contributing to higher revenues.
The high sales volume ensures high revenues in spite of low selling prices. The high sales volume contributes to high operating efficiency. Higher operating efficiency is achieved through minimization of variable costs.
Variable costs are lower when volumes are higher. This model encourages customers to buy at Costco stores, but also limits the total number of customers. Non-member consumers might feel unwelcome at Costco stores. The company has the weakness of the limited array of goods and services.
Customers might go to other retailers like Walmart, which has a wider array of goods and services. Opportunities for Costco External Forces To ensure long-term viability, Costco must consider and exploit these opportunities in the industry: The company has the opportunity to enter new markets, such as markets in developing Asian countries.
Costco has the opportunity to expand the coverage of its e-commerce websites. The company also has the opportunity to increase the variety of its goods and services to improve the attractiveness of Costco stores to a more diverse population of consumers.
These threats are as follows: In overseas markets, new membership warehouse clubs are opening. The aggressive marketing of other retail firms also threatens Costco. Final Note Costco Wholesale Corporation is a highly viable business. The business has the essential strengths to take advantage of opportunities in the retail industry.
The company has opportunities to address threats to its long-term viability. The firm could use its website and its network of suppliers to compete against new membership warehouse club retail companies.
Costco is expected to continue to grow in the years to come. Southern Economic Journal,80 3Costco Wholesale Corporation’s 10 strategic decisions of operations management are shown in this case study and analysis on business areas and productivity. Costco’s Mission, Business Model, Strategy & SWOT.
Updated on Updated on March 25, Case Study & Case Analysis, Costco Wholesale, Global Economy, Operations Management, Retail Industry, SWOT Analysis. Costco’s Operations Management, 10 Decisions, Productivity;. Apr 11, · Costco case study and strategic analysis Costco Wholesale Corporation (Costco), one among the few largest wholesaler giant differentiates itself applying unique strategies relating to production and operations, and marketing which make it stand out from the rest of the retailers who are also said to be competitive in the retailing and.
Check Out Our Costco Case Study and Strategic Leadership Essay Strategic leadership at Costco focused on the flexibility leadership model that takes into account a leadership theory focuses on organizational performance. View Homework Help - Costco Case Study from MKTG at Azusa Pacific University.
Johnson 1 Kim Johnson Dr. Skalnik Strategic Marketing Management February 20, Costco Case Study 1) 80%(5). Costco Wholesale uses its business model to follow its mission statement. However, the internal analysis elements (strengths and weaknesses) and external analysis elements (opportunities and threats) show that Costco’s managers must formulate new strategies for sustained growth and development of the firm.