Strategic Plan: Costco (Essay Sample)
Complete a strategic plan for Costco no more than 3,500 words.
Update your plan to incorporate facilitator feedback from the drafts you submitted in previous weeks. Include the following:
Table of contents
Executive summary, with a 2-page maximum
Company background, organizational mission, vision, and value statements
Note. For a start-up, you should focus on the backgrounds and accomplishments of key anticipated management personnel. The goal is to convince the investor that these individuals are trustworthy and successful.
Review of Week 4 strategies and a recommendation for the best strategy for your organization
Implementation plan including contingency plans for identified risks
Strategic plan- Implementation, Strategic Controls, and Contingency Plans Costco
Dr. Robert Stokes- STR/581
August 14, 2015
Table of contents
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.
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)
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. This is an important element since the items sold are selected depending on whether the members can bargain and this provides huge cost savings. As such, relying on a lower markup compared to the wholesale/ retail outlets has meant that the members take advantage of the discounts. Even in cases when the company stocks brand names the quality of the items is high with the pricing following the same strategy. Low prices wow customers and customers then associated the retailer with high-quality products sold at a lower price. This is related to the need to give the customers the value for their mon...
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