Essay about The Five Generic Competitive Strategies

1783 Words Feb 5th, 2012 8 Pages
The Five Generic Competitive Strategies
Chapter 5 – Assurance of Learning Exercise, Competitive Strength Assessment Chart, Five-Forces Model & Case 4

Strategic Management – MBA 5900
The Five Generic Competitive Strategies
Chapter 5 – Assurance of Learning Exercise, Competitive Strength Assessment Chart, Five-Forces Model & Case 4

The Five Generic Competitive Strategies
“The company boast on its advertisements that its products are rated number one by consumer magazines and are not sold at Lowe’s or Home Depot”
“The company boast on its advertisements that its products are rated number one by consumer magazines and are not sold at Lowe’s or Home Depot”
Chapter 5 – Assurance of Learning Exercise, Competitive Strength
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Competition is slim to none in the North American wholesale industry due to the three companies using a low cost provider marketing strategy. For Costco, potential new entrants, according to the five competitive force model, are the strongest. Costco is dominating the wholesale industry and therefore, have low competitive threats coming from new rivals. Entry barriers in the industry are low due to the limited wholesale industry competition. Memberships to Costco, BJ’s and Sam’s Club make members unwilling to switch to other companies. This provides an exclusive service that stores such as Family Dollar and Dollar General does not provide.

2. Costco, BJ’s and Sam’s Club has highly similar strategies in terms of memberships and being a low cost provider. The apparent differences between the three wholesalers would be the market share for each. During its inception, Costco had about 56 percent share, Sam’s club had roughly 36 percent, and BJ’s had about an 8 percent share. According to the text, Costco’s strategy was to open more new warehouses while building a fiercely loyal membership base and employ well executed merchandising
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