Strategic Plan: Costco

Strategic plan- Implementation, Strategic Controls, and Contingency Plans Costco
Charisse Brown
Dr. Robert Stokes- STR/581
August 14, 2015
Table of contents
Executive summary
Costco wholesale gives its members the opportunity to purchase high-quality products at a low price. To achieve the retailer’s objectives the there is emphasis on respecting the customers, employees and vendors and obeying the law. Pricing differentiates Costco from other wholesale/ retail membership clubs with the customers mainly buying in bulk. The customers tend to be treasure hunters, and the limited selection of products has allowed Costco to sell the fast moving products in its outlets. Additionally, Costco has sought to expand into new markets and boosting online sales, as customers increasingly shop online. Looking into the internal and external factors affecting the operations of Costco helps the management to implement strategies. This is because Costco’s management can take advantage of the opportunities to gain a competitive edge, but also dealing with the threats. The online platform will also enhance the growth strategy for the customers who prefer online shopping, and this is an opportunity that can be exploited. This highlights product differentiation. The internal environment of Costco is based on offering a diverse product mix at an affordable price, while ensuring that the staff is highly motivated as this affects their performance. Overall, the strategy plan is to be implemented to leverage on Costco’s strengths and using a contingency plan to mitigate risks resulting from uncertainty.
Company background
Costco is a membership wholesale club that allows the members to buy high-quality goods at affordable prices. The organization acts as a retailer allowing the members to shop, with Costco also following a code of ethics to accomplish its mission. The code of ethics further highlights the organization’s objective of obeying the law, taking care of the members, employees as well as respecting the vendors (Costco, 2015 a). Ethical practice then allows the company to reward shareholders through following conscious business practices that integrate the interests of diverse stakeholders.
To gain a competitive advantage the company has built upon improving its operations based on increasing membership fees, having minimal markups, quality service offerings and employee satisfaction. Since the wholesaler stocks quality merchandise it has attracted many treasure hunters who seek to get value for their money (Logan & Beyman, 2012). This is particularly for those who purchase in bulk, as the selection of merchandise is meant to benefit those who prefer bulk buying. At other times, there are free samples that make it easier for the members to choose from the merchandise being sold.
Mission statement: "To continually provide our members with quality goods and services at the lowest possible prices,” (Costco, 2015)
Costco’s features
Pricing
Pricing often differentiates a business from its competitors and is also a marketing strategy that helps the management to target a specific market. Costco has relied on low prices compared to other wholesale and retail outlets. Thi...