Value Chain Analysis For Costco

Better Essays

The purpose of this paper is to do a value chain analysis of Costco, identify their resources and capabilities, to conduct a SWOT analysis to identify the opportunities in which they are lagging and to form a strategy to move forward using the recourses and capabilities in the direction of utilizing those opportunities.
Value Chain Analysis for Costco
Conducting a value chain analysis provides a snapshot for identifying a firm’s relative competitive performance, core competencies, and for focusing on customer centric activities. Costco’s customer driven focus allows primary and support business activities to work in unity creating a stronger competitive advantage and thereby increasing profitability. Profitability and shareholder value rely on coordination of both sets of business activities to create a firm’s competitive advantage.
Costco’s infrastructure skills and capabilities support operations for achieving low cost global leadership in warehouse retail sales and better than industry average. Costco’s culture strives to provide a limited variety of quality merchandise goods from private label and some well established brands.
Costco’s value chain provides a diversified product base to a large globally diverse consumer base. Costco is industry leader to Target, and sometimes loses positioning to Wal-Mart’s Sam’s Club. Costco’s culture type is at Level 3, and positions the company for short-term and long-term success (see Table).
Value Chain Analysis

Get Access