Costco
Competition Among the
North American Warehouse Clubs:
Costco Wholesale vs. Sam’s Club vs. BJ’s Wholesale
Provide an overview of the company and/or industry and add any pertinent information relevant to the case (5 points)
The overall competitive forces working on the Warehouse Club industry are fairly average. The highest pressure in the industry comes from industry rivalry and the availability of substitutes. Buyer bargaining power, supplier bargaining power, and threat of entry are relatively weak. Costco controls about 56% of the market, Sam's Club controls about 36%, and BJ's and any other warehouse retailers control about 8%.
1. Do all three warehouse club rivals – Costco, Sam’s, and BJ’s Wholesale – have highly similar strategies? What differences in their strategies are apparent? Does one rival have a better strategy that the others? Does one rival have a somewhat weaker strategy than the other two? (15 points)
All three use the a low-cost provider strategy and have fairly low product differentiation. Costco clearly has the superior strategy out of the three competitors and are operating at a high level. Sam's is the closest to being a threat to Costco but needs to adjust their strategy as it pertains to appealing to consumers. BJ’s has the weakest strategy and operates on a regional level with no apparent plans for significant expansion.
2. Five years from now, is Costco’s standing as the industry leader likely to be stronger or weaker? Are the other two rivals likely to gain or lose ground on Costco? Why or why not? (15 points)
Sam's club does have more international locations but Costco has a strong growth strategy and an abundance of resources to exapnd internationally. Sam's will need to expand their clientele if they wish to gain ground on Costco. BJ's is lagging behind and will likely lose ground if they cease to expand operations like there competitors are doing.
4. What recommendations would you like to make to Jim
North American Warehouse Clubs:
Costco Wholesale vs. Sam’s Club vs. BJ’s Wholesale
Provide an overview of the company and/or industry and add any pertinent information relevant to the case (5 points)
The overall competitive forces working on the Warehouse Club industry are fairly average. The highest pressure in the industry comes from industry rivalry and the availability of substitutes. Buyer bargaining power, supplier bargaining power, and threat of entry are relatively weak. Costco controls about 56% of the market, Sam's Club controls about 36%, and BJ's and any other warehouse retailers control about 8%.
1. Do all three warehouse club rivals – Costco, Sam’s, and BJ’s Wholesale – have highly similar strategies? What differences in their strategies are apparent? Does one rival have a better strategy that the others? Does one rival have a somewhat weaker strategy than the other two? (15 points)
All three use the a low-cost provider strategy and have fairly low product differentiation. Costco clearly has the superior strategy out of the three competitors and are operating at a high level. Sam's is the closest to being a threat to Costco but needs to adjust their strategy as it pertains to appealing to consumers. BJ’s has the weakest strategy and operates on a regional level with no apparent plans for significant expansion.
2. Five years from now, is Costco’s standing as the industry leader likely to be stronger or weaker? Are the other two rivals likely to gain or lose ground on Costco? Why or why not? (15 points)
Sam's club does have more international locations but Costco has a strong growth strategy and an abundance of resources to exapnd internationally. Sam's will need to expand their clientele if they wish to gain ground on Costco. BJ's is lagging behind and will likely lose ground if they cease to expand operations like there competitors are doing.
4. What recommendations would you like to make to Jim