Through arrangements with suppliers, they are able to offer a large inventory of loose diamonds at low prices. Until a customer orders a stone, Blue Nile does not have to purchase it. Besides being able to have small inventories, this set up allows them to be paid by the customer before they have to pay suppliers. Using this cost saving supply chain also gave them the advantage of being able to set a markup price lower than competitors. The nature of their business model enabled them to enter the fairly new online market and compete based on lower prices.
Walmart sells many items at ridiculously low prices. They are able to offer low prices on their items due to an incredible mark-up on imported products. Especially in today's economy, the buck is the big winner. Everyone wants to save money, and they can do that by shopping at Walmart, where many items are the lowest price in town, even if it's only by a few pennies. But consumers aren't helping their fellow countryman earn his own living by buying these imported items.
MGMT 4020 June 24, 2013 Homework Assignment #2 Competition is very high in the North American wholesale club industry. Every wholesale club wants to sell top-quality products at prices less than others in order to attract draw customers. And they all want to display low prices on pallets or inexpensive shelving, therefore, they have very low costs for store decor and fixtures, have comparatively low labor costs, and spent minimally on advertising and customer service. Five Forces Analysis 1. Bargaining Power of Buyers is moderate.
Their mission states, “To continually provide our members with quality goods and services at the lowest possible prices”. Costco's strategy includes ultra-low prices, with limited selection of nationally branded and private-label products, a “treasure-hunt” shopping environment. Costco entails strong emphasis on lower operating costs, and geographic expansion. The company only stocks products that could be priced at bargain levels, therefore providing its members with high cost savings. Costco's business strategy is the reason why they are the cost leaders in the industry.
A report on the Financial Sense WrapUp website says, “The small business retailers have never recovered. Even when resisted, expansion is relentless and almost unstoppable.” (Small Businesses and the Big- Box Era, par 1) Clearly the effects of this “big-box” phenomena spreads much like a wild fire. Discount superstores have the advantage over small businesses because of two huge business strategies. “Their foundation, apart from IT systems, is built upon cheap Asian supply of products, and low-paying jobs at their stores” (par 1). A combination of cheap manufacturing, as well as low wage back in the store gives them that ability to charge much less than the typical retailer.
One of the things I like about Sysco is that they have well over 149 stores in the U.S., whereas US Foods, has about 75 in the U.S., their webpage could use more of a makeover so that it could attract more customers, possibly more easier to navigate through and more colorful to catch the eye. US Foods webpage was very colorful and easy to navigate through and seem to have much more to offer, so there is much competition there already, so I am sure there will be more work soon to help increase the sales in
For example, they normally purchase a big number of merchandises from original manufacturers so they will be able to purchase it in very low prices. Then, people who would like to buy their products have to sign up to be store membership. The companies such as Sam’s Club, BJ’s Wholesales Club, and even Costco will allow just memberships to buy the products in low prices.
In addition, the service industry in the U.S. keeps employing large numbers of illegal immigrants simply because they are a kind of cheap labor source that stays around for many years due to their sturdy work. (Mirande 61) Immigrants are added sources of economic growth spending billions with massive U.S. companies like credit cards, mortgage lenders, banks, insurers, phone carriers, and other consumer corporations. They bring roughly 600,000 to 700,000 new consumers to the economy every year. (LULAC 1) According to Business Week, 84% of immigrants are between the ages of 18 to 44, in their prime spending ages versus 60% of legal residents. By allowing illegal immigrants to obtain legal status to work and live in the U.S., they add a potential benefit to our economy by spending the money they work hard for and put back into our economy.
One of Sam Walton's techniques for change is technological changes. By the 1990's the organization had been so successful and had more increasing growth than any other department store in the United States. Wal-Mart's product categories include: soft goods (apparel, linen and fabrics) accounts for 29% of sales, hard goods (hardware, house-wares automobile supplies, and small appliances) constitutes 28% of sales, candy (11% of sales) sporting goods and toys (10%), health and beauty aids (9%), gifts, records, and electronics (5%), shoes (3%), pharmaceuticals (3%), and jewelry (2%)." Wal-Mart provides consumers with "Everyday Low Prices" (Walmart.com). The price sensitive merchandise allows customers to get more for their dollar.
The major quality that Wal-Mart possesses is its ability to adapt and change according to the needs of its customers while striving to keep prices of goods and services low. With annual sales of about $300 billion, around 68% of the sales come from Wal-Mart Stores, 19% from its international operations, and 13% from its Sam’s Club. Wal-Mart’s annual profits are about $10 billion and they have a market value of over $250 with assets worth over $105 billion (Mujtaba & Maxwell, 2011). This success has hurt many competitors in the process but their success is an example that many manufacturers and businesses should use as a case study to perfect their own inventorial