Threat of New Entrants is weak. Entry barriers are high because of the economy, significant experience-based cost advantages, other cost advantages held by industry members (e.g., access to inputs, favorable location), brand loyalty (which comes from membership and other services), strong network effects and high capital requirements. 5. Substitute Products or Services is moderate. Warehouse clubs like a magnet for customers and pulling them away from other traditional retail channels such as supermarkets, department stores, drugstores, office supply stores, consumer electronics etc… All three warehoused club rivals - Costco, Sam’s and BJ’s – have similar strategies: Low prices, low operating costs, geographic expansion – Costco; Sam’s Club concept is to sell merchandise at low profit margins, which means at low prices to members; and BJ’s offers brand-name merchandise at prices that were significantly lower than the prices found at retail, supermarkets, dept.
Being able to track sales compared to the previous years’ numbers is a valuable tool in being able to track business. They use this information to forecast on where they think the business will be heading in the next week, month, or year. If the debt percent gets to high then they need to adjust the amount of liabilities that they have to bring that number down. Knowing the times interest earned ratio allows the managers to know at what percent the company is earning interest on its net income. Investors find this information lucrative because the more expendable cash a company has the more likely they are to pay out in dividends for the stock holders..
These overall improvements have been a step in the right direction for Lowes’ future. These improvements however do cost money but like every good business man or woman knows to make money you sometimes have to spend it. So this can affect Lowes financial planning in the present and future, currently sales and profits have grown because of the new mobile devices therefore the risk factors are minimized due to the knowledge that these improvements are working but Lowes must continue to analyze the cost for these new improvements every year make sure these things do not become a financial burden. Therefore cost analysis is one factor that can affect the financial planning of the company also minimizing the use of these devices to only the stores is another factor that needs to be considered in the financial planning process. Spending money on training of these devices are also factors that must be considered this takes employees time and cost the company man hours and thus money that could be spent on other things.
In a highly competitive business world, on a firm’s priority list is the subject of increasing profit and reducing cost. One might than pose the question, has this put them out of business (mom and pop store)? The answer is absolutely not, but rather, they too benefit from cheaper prices as they continue to buy in bulk and continue to operate as the name suggest, convenient
As known that Costco is focusing on high quality of merchandises at relatively low prices, they have one condition in order to purchase merchandises at low prices, which is number of purchases. For example, to have one product that is cheaper than competitors they have to purchase more from original manufacturers. Therefore, Costco realized that they have to keep the sales volume to be high so they are still able to maintain this advantage. Because of this, they try to keep their slogan in customer minds that Costco has lower prices and they try to same membership money. However, there is a problem that Costco has to deal with is that their profits mostly from its membership fees instead its net income.
The industry’s growth potential is large considering that customers are very likely to be enticed by the offer of saving 30 to 40% of what they would normally pay by making individual travel plans. The lower price to consumers therefore provides a source of competitive advantage when comparing group traveling versus the conventional way of booking travel plans. However, when comparing TTG to other group-traveling companies, whether existing or potential new entrants, we find it will be very difficult to maintain competitive advantage because the service provided is easy to imitate or even to improve by well established indirect competitors such as nation-wide travel agencies who can take advantage of their existing platform to include group-travel in their portfolio of services. For the same reasons, achieving value added potential through differentiation and long-term sustainability are estimated to be low for TTG. The profit margins, as projected by the financial statements, seem low (approximately 11 % per passenger not including overhead costs).
Add further incentives to high utilizers based on dollars spent as the business-traveling customers care more about service than cost. Service improvements would entail, decreasing wait time and lines, no blackouts, free pick-up and drop off. Olympic could continue with the same loyalty levels, but increase the incentives in each category and alternate travel days with cash spent. The Olympic program would allow customers to earn multiple points on every dollar spent, no matter what you buy, and no matter how you pay (cash, credit, etc.). A simple and hassle-free program such as this gives customers the ability to earn points every time they rent, then turn them around and easily use them to save money on further rentals regardless of what car class.
Redbox pursues a low-cost provider strategy by striving to achieve lower overall costs than rivals on products that attract a broad spectrum of customers. It was able to achieve low cost by installing kiosks the cost of which is $15,000 with five years of useful life. The price competition among rivals is vigorous. There are many rivals who are selling similar products, but hardly anybody can offer the same price per DVD with no late fees. Moreover, the convenience of locations saves customers’ time, energy and money, taking into consideration that the rental fee of Redbox is “dirt cheap.” Through its successful strategy execution, in 2010 Redbox had 22,400 vending kiosks in the United States, Puerto Rico and United Kingdom.
High volume and rapid inventory turnover allowed warehouse clubs to finance merchandise inventory through vendor payment terms rather than by having to maintain sizable working capital. The primary clientele for these stores included small-business owners and individual shoppers who paid an annual membership fee. In 2010 there were more than 1,250 warehouse clubs in North America with Costco controlling about 56% of the market, Sam’s Club controlling 36%, and BJ’s and other small warehouse club competitors controlling 8%. Analysis All three of the major competitors in the North American Warehouse Club industry are pursuing a low-cost provider strategy as indicated by
The net of the hospitality industry is, how much profit is being made. This depends solely on the guests patronizing the business regularly. Repeat customers are necessary for the business to be successful. The turnover is quite high because of the 24 hour scheduling and the demands on the worker to be responsible, hospitable,