Costco Case Study

Competitors in the states just to name a few would be Moes southwest grill , Taco bell , and Baja Fresh mexican grill these food chains compete in many ways from the menu , prices and location. Foreign competitors in australia would be Izole Mexican ,Barrio chino and cantina mobil though these are all different forms of mexican style restaurants they all share the high demand for mexican cuisines . The competitive advantage that makes chipotle such a great investment is there business plan which requires them to incorporate the speed of a fast food industry by having high quality products , even though these mexican grills target the same customers chipotle stays above the others with their strategic strategies that differentiate the food ; Oppose to the competitors all of their food contains natural ingredients which is one of the major reasons why chipotle has such a high growth rate which allows them to

1. What is Costco’s business model? Is the company’s business model appealing? Why or why not?

From a strategic perspective, Costco could be doing a better job. When an industry is experiencing high growth, a company should gain a competitive advantage by determining what makes it unique to its competitors. As mentioned previously, the three components of the company’s strategy are low pricing, limited product selection and “treasure-hunt

What are some factors companies (and your learning team) need to consider before attempting to enter foreign markets? Assuming you were setting up a market program for a product in a foreign country (and you are), what should you take into consideration? Assume you are developing an advertising strategy for the promotion of a new product (and you are). What are some things you should consider?

Costco is a club card organization. Everyone wants to join. Joining Costco gives people access to great things that they must offer. Costco offers high wages, benefits and opportunities for growth. They offer the best wages around. They reward they employees not only with incentives but with bonuses. Employees can grow with the company because they promote within. Costco has some of the best top suppliers, PepsiCo, and Kraft Heinz. Having some of the best suppliers gives the company to bargain with their prices. A new competitor would find it hard to match Costco products and prices. Five Forces that outline Costco are rivalry among competitors. Rivalry among the company is high. Costco and Walmart are the top two in retail. Their or others, Best Buy and Target which are well known for holding their power. Retailers are competing against each other with whom can give lower prices to customers. The treat of substitute products and service is another force. This force is important because it is a technique to take customers away. They try to take customers away from other retailers by carrying items in one size with the best brands at a low price. Potential new competitors is down because competing with Costco and Walmart is hard. Power of supply. Costco does not spend that much on supplies because they buy in bulk keeping the

Renee McDonald (“Plaintiff”) allegedly sustained personal injuries on October 8, 2015 while shopping at a store owned and operated by Costco (“Defendant”) in Brooklyn Park, Maryland. According to the plaintiff, while walking through the store, she tripped on mop water which caused her to fall to the ground and suffer “severe bodily injuries.” The Plaintiff claims that her fall was caused by the mop water. The mopped area had been secured with a yellow caution sign that warned customers of the wet floor. At the time of the Plaintiff’s fall, however, the sign had fallen down and was lying on the floor. Plaintiff alleges that the store did not have proper signage to warn of the hazardous condition.

Expanding a business into a foreign country can be a challenge, but nothing impossible to do. El Salvador is the third-largest economy in Central America and is also the smallest nation in the region. Since 1992, El Salvador have shown an economic growth, due in part to its commitment to a free market economy and methodical fiscal policies. Therefore, El Salvador is a strong potential country, in which Target Corporation can conduct business freely. Furthermore, Target Corporation would represent a growth opportunity to El Salvador, because it would open job opportunity for the younger generation and for women’s. Additionally, it would also increase a strong, healthy, and safe community in the country.

What is Costco’s business model? Is the company’s business model appealing? Why or why not?

Factors such as the costs, social situation understanding the culture, competition, labor force, rules and regulations, targeted audience, availability of labor force etc needs to be considered in business expansion plans. Company has already factory setup in Lebanon and all products are exported from Lebanon. Problem mainly lies in the region instability to do business operations at times cause

Costco’s business model is to generate high-volume sales and rapid inventory turnover by offering low prices on a limited set selection of brands and a few selected privately labeled products. This model does not turn a profit on its own with the company operating slightly below its break-even cost. However, to make up for this Costco charges a membership fee and this is a simple way of padding their profit but also enabling them to provide a customer experience that emphasizes value.

Since the company has established a portion of the industry where competitive forces are weaker, expanding into untapped markets brings along a great risk. Their plan to expand into Africa for instance would cost the company a lot financially and structurally, considering the fact that there is no assurance of business success in this region. They made it in Brazil since the market was well understood. Rather than expanding blindly, therefore, company positioning should be taken into account. The company should consider regions where consumption of their products is high while competition is low.

1. Conduct a comprehensive market analysis of the local market in the foreign country. 2. Analyze the role the government will play such as import restrictions, taxes, and purchasing restrictions. 3. Research the local culture to see if the franchise would prosper there. 4. Conduct an analysis on how the exchange rate might affect the business. 5. Contact other foreign business established in the country and see

     Other issues regarding international expansion into other countries also need to be considered including, access to supportive infrastructure, adapting to local culture and trade laws. Competitors within each of these regions will also pose a threat; a deeper analysis of competition within the food service industry utilizing Porter’s Five Forces model is located on the next page.

Measuring a potential business venture has many aspects which the international manager must be aware of in order to convey the correct information back to the decision makers. Being ignorant to any of the aspects can lead to a false representation of the project, and hence an uninformed decision being passed. In order for a business to survive it must grow. For growth to be optimal, management must first be able to identify the most attractive prospective leads. The country as a whole, specifically geography, government, and financial aspects must be looked at in order to yield the best possible picture of the market a company wishes to enter. Concentration should be placed on gathering reliable facts

One advantage to having a distribution center located in Mexico is that we wouldn’t have to export the food from America. This will cut down on cost because the consumers will be in a much closer proximity to our product than if we were headquarter in America. This will allow our consumers to receive their orders quicker, and more efficiently. Since the products transportation time will be cut down, this will result in fresher food for the customers. Another advantage is we will be contributing to the growth of the Mexican economy by hiring local citizens. This will also be beneficial to us because the Mexican minimum wage is less than that in the United States.