Case Study 1 Costco Wholesale Corporation: Mission, Business Model and Strategy Costco Wholesale Corportation (Costco) operates based on a cost-based advantage and also focuses on a market niche. A cost-based advantage involves achieving lower costs than competitors (Gamble & Thompson, 2009). Costco also focuses on the upscale customer, offering more luxurious items, such as diamonds. Costco utilizes many strategies to help achieve low costs that it can pass onto its customers. By minimizing handling of goods through the use of direct shipments form the manufacturer to the store, as well as the use of cross-docking techniques where items are shipped to a cross-dock and then distributed to stores, Costco is able to minimize handling time.
In the wake of the second world war consumers’ preferences had changed significantly. Having tasted the benefits of self-service, and more confident thanks to new government standards, consumers were ready to try cheaper, self-service retailers. Wal Mart developed a cost leadership strategy, by cutting expenses at all levels, unique for the retailing industry. Wal-Mart has lower operating expenses than the industry average. The primary cost advantage is Wal-Mart’s superior distribution capability (location of stores, inside-out growth patterns, cross-docking, superior information management).
Sales have risen from 22.6 million pounds in 2001 to 43.1 million pounds in 2006. This has been achieved through growth strategies which have seen the company expand its retail outlets and at the same time enter into new markets with high growth potential. At the same time, the company has experienced growth in profit. It profits margin has continued to grow in line with its growing sales. It profits have increased from 1,322 million pounds in 2001 to 2,280 million pounds in 2006.
Just as specialization of labor is efficient for families, it is also efficient for countries. Parry also reasons that free trade of labor and services is beneficial to economies. He draws on the widely held capitalist belief that free trade results in lower costs to consumers, and appeals to the reader’s assumed positive feelings about free trade. He asserts that if free trade of goods is beneficial to the consumer, so will be the free trade of services through offshoring. In these examples, he draws comparisons between practices and beliefs that are natural and common to us and offshoring, thereby attempting to increase our comfort
Sainsbury’s Value Sainsbury’s pride themselves on the quality of their products that have been ‘sourced with integrity’ whilst still managing to offer excellent value for money. Their own brands including Taste the Difference, and their Basics range are reasonably priced offering their customer’s cheaper alternatives whist maintaining high standards. Another way Sainsbury’s offer value is by its relationship with Nectar which allows customers to save money whilst they shop. This is backed up by the recent venture into offering brand matching for Asda and Tesco, which means if any
IMPACT OF GLOBALIZATION ON WORLD ECONOMY: POSITIVE IMPACT OF GLOBALIZATION ON WORLD ECONOMY: 1. More efficient markets The sign of an efficient market is where there is an equilibrium between what buyers are willing to pay for a good or service and what sellers are willing to sell for a good or service. If you can improve the way you produce a good or service by doing things such as outsourcing certain processes or buying from an overseas supplier that offers discounts, you can then afford to lower your selling price which results in increased demand and affordability. 2. Increased competition Anytime that you have
Marketing Britvic Case Study – Assessment 1 1. Characteristics of the marketing concept. The Selling Concept – This concept doesn’t primarily focus on new consumer wants or desires but focuses on the selling and promotion of a particular already existing product in order to achieve the highest sales they possibly can. This technique is suited to companies who sell products which are in high demand and whose customers/consumers tastes are unlikely to change and lessen demand. The Production Concept – Companies focusing on this concept will primarily focus on achieving high production efficiency at low costs and mass distribution as they believe the consumers are primarily interested in widely available products at low prices.
The quality of the goods are acceptable to consumers and there are few frills. These companies constantly look for ways to reduce cost while keeping good quality and not cutting down on essential features. This strategy places more emphasis on the features of their products than
This method has proven to be effective and cost efficient for them. This leads to lower costs on the automobiles they produce which in turn give consumers a better price. They also have a lean manufacturing that cuts costs and keeps inventories down and speeds up the production process. Toyota strives to effectively use resources to maximize production and minimize costs. This type of lean manufacturing has made Toyota a leader in the auto industry.
It also ensures that he can put a high quality product on the market at a relatively low price. On the contrary, when the government requires that workers be paid more, businesses are forced to make adjustments in other areas to offset the added costs, such as reducing work hours, cutting benefits, hiring fewer people and charging higher prices. Naive lawmakers tend to believe, or at