costco

Dominating on Competitive Advantage

Posted on by leonel30131f14

costco

 

Costco’s Wholesale’s Mission Statement is to, continually provide their members with quality goods and services at the lowest possible prices. Costco’s has implemented a strategy for a competitive advantage by having a mix of low-cost providers and differentiation. Costco differentiates itself by providing consumers with products in bulk at a low per unit cost, giving rise to a competitive advantage. Costco delivers exceptional value in the products and customer service offer, giving customers the satisfaction that they are getting more for their money.

What keeps customers coming back to Costco, and what is it that makes it so successful? To answer the first question, Costco offers two types of memberships—the regular and executive membership. With an executive membership, Costco gives a 2% reward on annual Costco purchases. A holder of the executive membership receives incentives for shopping there, which leads to more sales and higher customer visits. Costco has made itself a highly successful company by offering quality products and excellent customer service. Not only do they treat their customer’s well but offer their employees a competitive salary, making on average $20 an hour. They receive great benefits and are part of a safe and healthy working environment as well. At Costco they are committed to providing its employees with opportunities for personal and career growth. A satisfied and happy employee translates into a productive working environment. By giving its customers competitive wages, Costco is creating valuable and productive employees, which in turn increases their output per employee, they save money on hiring many merely good employees, and offer quality service.

My family holds a membership, and we primarily go there for most of our groceries, and what I have learned is that, the shopping experience forms part of Costco’s competitive advantage. They offer free samples throughout their store, have a food court, and gasoline station with reduced prices. Their competitive prices and savings keep us coming back. Saving on gas while on a trip to buy groceries is an added benefit that has contributed to Costco’s competitive advantage and differentiation. Costco has competition with companies such as Sam’s Club and Wal-Mart, but so far it has proved to be dominating the wholesale business, being listed at #12 on Fortune’s 2014 most admired companies. I believe that as long as they keep doing what they are doing, and going a step further to satisfy its customers, they will continue to dominate the wholesale business.

 

Do you or any family members hold a membership at Costco? If so, how satisfied are you with the products and services they offer?

Do you think Costco’s competitive advantage would strengthen or weaken by expanding to continents such as Europe or Asia?

Are there still any areas for improvement at Costco?

You Get What You Pay For.

Posted on by spr1334btenca

Is the long dreaded statement, “You get what you pay for” true? Or is it just a coined phrase that consumers overuse?

The recent numbers for the business quarter were released by Wall Street Journal and Costco’s numbers were nothing less than impressive while Walmart’s numbers were nothing spectacular. Costco experienced an 8% increase from last year’s benchmark and a 5% increase in same-store sales. These impressive numbers that Costco released may reveal that consumers are sick of receiving a shoddy service from corporations such as Walmart.

This grocery superstore (Costco) does charge a member fee; however with the 8% increase this quarter it doesn’t seem to be stopping anyone from coming and ditching Walmart. Walmart is known for its unbelievable cheap prices and record-breaking deals, but are these numbers revealing that consumers may be sick of it and switching to Costco?

The article suggests that the reason for this downfall at Walmart may be related to the minimal wage it pays its employees. On the other hand, Costco pays its employees a decent wage where they can afford even the extra remedies in life. Where a Walmart employee can barely afford to take their kids to the doctor. Even if the average employee at Walmart finds a loophole to squeeze a little more pay out of the company Walmart Corporation won’t hesitate to cut that stores employment roster by nearly one and a half percent.

As a result of these minimal wage efforts to their employees their quality of service has significantly decreased. Employee moral is down because there is an extreme lack of motivation between workers when they know pay is extremely low. Inventory remains pilled up in warehouses around the country and customer services line are metaphorically speaking “running out the door.” To add to another fall back Walmart is experiencing, is that when customers do want their products, they are nowhere to be found.

Walmart is experiencing these sales hit and we can see that they may be directly related to poor compensation received by their employees. Staff and salary cuts at Walmart have been occurring since the recession while customer service continue to drop. Yet Walmart still continues to open retailers around the world.

With the decrease in the quality service that Walmart is providing maybe it is time to revamp some of their strategies and move away from extremely low prices. They need to invest some of this money into paying their employees properly because with low wages we can see employee turnover and sales are at a low.

Personally, I have experienced Walmart’s poor quality service and am not a firm supportive of how they treat their employees; however I do enjoy their extremely low prices.

Will following Costco’s employee wages support team moral and inadvertently improve company sales at Walmart?

What quality tools can Walmart use to design a new business model to ensure this won’t continue to happen?

You get what you pay for; do you think Walmart provide shoddy quality service?

 

http://www.forbes.com/sites/rickungar/2013/04/17/walmart-pays-workers-poorly-and-sinks-while-costco-pays-workers-well-and-sails-proof-that-you-get-what-you-pay-for/
http://hbr.org/2004/12/outsmarting-wal-mart/ar/1
http://www.costco.com/employee-website.html

A Fake Tiffany Blue Box

Posted on by spr1334ksolis
Photograph by Timothy A. Clary/AFp via Getty Images

Costco is now selling Tiffany replica rings but at the Costco price and this is causing Tiffany to file a multimillion-dollar trademark suit against Costco.

A women on WeddingBee.com asked her blogger readers about what where their thoughts on jewelry from Costco, most women said that they would not mind a ring from Costco but they would not be entirely for it. Some of the responses included, that they only saw Costco as a grocery store and never thought about buying a ring from there, another response was that she had thought about buying a ring from Costco but was concerned when people would ask where she got the ring.

On a Good Morning America episode a Tiffany diamond and a Costco diamond where both appraised. The $16,600 Tiffany cut was 58% more expensive than its $10,500 value, and the $6,600 Costco ring was 17% under its evaluated value of $8,000. What allows Tiffany to have their prices $6,100 above the evaluated price is what the international recognized blue box means, Quality.

The dimensions of product quality that Tiffany offers are,

Conformance- When you buy an engagement ring at Tiffany’s you buy something that Tiffany has ultimately guaranteed that it   will meet the specifications of your loved one.

Reliability/Durability- Since it is a prestiges company that has spent many years building, you are assured with all the paper work that the ring you buy will have a useful life and a consistency of performance through out it.

Service- Once a ring is purchased, it can be returned for cleaning or resizing at any time.

Response-  The jewelers have face to face interactions with their customers about the different kind of cuts and qualities of diamonds so they choose the best diamond for them.

Aesthetics- Every piece of Tiffany’s is a renowned design and over the years there have been a select number of designers to create exclusive pieces just for Tiffany.

Reputation- Tiffany has spent years building a reputation for themselves, with the help of many stars and the classy Audrey Hepburn endorsement raises not only the price of its jewelry but the reputation of the little blue box.

My parents own a jewelry store and I notice how peoples meaning of quality differ all the time. The one difference I constantly get from customers is the preference from 10kt and 14kt. Many people have had problems in the past with 10kt or have heard stories that created a bad reputation for 10kt. Although I explain to the customers how gold has changed and how 10kt is now a better quality the reputation and the durability of the past remains.

Is $6,000 more worth getting a lifetime of sizing and cleaning?

Or

Is the name Tiffany worth $6,000 more?

Also

If you found a similar ring to Tiffany’s at Costco with the same quality diamonds, would you still purchase the above evaluated Tiffany ring?

 

http://www.businessweek.com/articles/2013-05-06/tiffany-vs-dot-costco-which-diamond-ring-is-better

http://www.tiffany.com/About/TheTiffanyStory/default.aspx#p+1-n+6-cg+-c+-s+-r+-t+-ri+-ni+1-x+-pu+-f+/0

Costco vs. Sams club: what is the advantage of whole sellers?

Posted on by spr1311kbangloria

Is buying in bulk really more cost efficient? Yes and no. Whole sellers like Costco and Sam’s club sell their products in bulks to their customers.  Both Costco and Sam’s club give out the idea to the public that if they buy in bulk, they are saving money. This is not necessarily true. It depends on what you are buying.

For example, Produce is a “do not buy”  in bulks for obvious reasons of course.  How long would it last you? It would go bad and end up in the trash if you don’t use it up quick.  But frozen foods and meats are products that you should buy in bulks.  It is more cost efficient to buy them in large quantities and it will last you long.  The disadvantages of buying in bulk and being apart of the wholesale clubs is the annual membership fees. It also easy to get carried away and go over your budget when you are buying in bulk. Expired shelf life can also be a disadvantage. But despite the disadvantages, whole sellers manage to attract people to them. This is because of the savings in buying in large quantities and having to make less shopping trips, which overall saves you time and transportation costs. The savings are the main reason as to why Costco and Sam’s club are so successful.

Now whether Sam’s club is a better whole seller or Costco is the question. Each of them have different management techniques.

One of the critical decisions in Operations management is the location. Sam’s club is located in areas where people have to budget shop while Costco tends to be located in the wealthier suburbs. In terms of managing quality is concerned, Costco provides better quality   and less selection in their management techniques while Sam’s club offers more selection in their products but with lower quality.  Hence, why Sam’s club is a better place for most everyday necessities such as toilet paper and water bottles in which brand name does not matter. But, Costco is better for those looking for better brand names such as in clothing.  It is also proven that Sam’s club membership fee is cheaper than Costco’s. Costco pays their employees more and that actually effects the environment in the store. If the employees are getting paid well, they will have a better work environment with less stress; therefore providing better customer service.

Overall, I prefer Costco over Sam’s club. This is because of the excellent customer service they provide. Management is excellent at choosing their employees and providing a good environment. The greeting workers that provide samples of products during the shopping experience is a plus point for Costco. Although the membership may be a little more pricey then Sam’s club, the products at Costco are much better in quality which is more important to me.

Would you prefer to have a membership at Costco or Sams club and why? Overall, is it better to buy in bulks?

http://www.thebudgetfashionista.com/archive/costco-vs-sam-club/

http://www.businessinsider.com/are-you-really-getting-a-better-value-when-you-buy-in-bulk-2011-10

http://www.huffingtonpost.com/2012/06/01/buying-in-bulk_n_1559604.html