Case 4 Competition Among The North American Wareho

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1. Economic Characteristics • 1,250 warehouse club locations in the US, Canada and Mexico • Costco had about 56% share of warehouse sales in North American • Sams club roughly a 36% share • BJ's Wholesale Club and several small warehouse club competitiors had an 8% share • Costco became the first ever U.S company to reach $1 billion in sales in less than six years • Costco number of warehouses when from 488 in 2007 to 527 in 2009. • Sams clubs facility size ranged between 71,000 and 190,000, with an average size 133,000 2. Competitive Forces Substitutes: Strong threat • good substitutes everywhere. such as Wal-Mart, target, best buy. • more variety of features. they warehouses have a smaller variety when in comes to the same product Suppliers: Weak bargaining power • many suppliers • low switching cost • many substitutes exist • large quantities are needed Competing Sellers: Fierce competition • buyers demand is growing • buyers switching cost is low • quality better Buyers: weak bargaining power • large membership base • best value Potential New Entrants: low threat • small pool of entry candidates • high barriers to entry • expanding market 3. All three of the warehouse club have similar strategy. Each of the warehouses corporate strategies is growth-concentration, grow and build. Business strategy Best-Cost Strategy • Top-quality merchandise • lowest prices Each companies strategy is best-cost however they all differentiate them self differently from one another. Costco has one of a kind treasure-hunt items for its customers also has Kirkland signature top quality in house brands. BJ offers smaller package sizes that were easier to carry hoe and store including sizes that were comparable to those offered in supermarkets. Sams club offers Gold Key programs that permutes business members to shop before the regular

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