Reference no: EM133373547
Case Study: In textbook 18 Full-Length Cases with Rothaermel - Strategic Management 5th Edition. In section Costco Wholesale in 2020. Explain the case questions below.
In 2020, Costco Wholesale is at the forefront of American membership-based warehouse clubs. As a retail business, it stands out from other big-box retailers, such as Walmart and Amazon, by virtue of its membership model, which asks customers to pay an annual fee to access discounted products and services. Moreover, Costco offers an array of items- groceries, electronics, furniture, home goods, and apparel- all at a reasonable cost to its members. Quality is of the utmost importance within the company, with its products renowned for their longevity and affordability. Additionally, Costco markets and sells its own private label brands, highly sought-after by members and enabling the company to provide quality goods at low prices.
Despite the difficulties posed by the COVID-19 pandemic, Costco had a successful 2020 due to its membership model, efficient supply chain, and strong online presence. This, combined with its commitment to its employees and customers - including fair wages and benefits - enabled Costco to preserve its superior reputation and acquire new members.
The main query in the case is how Costco can keep its competitive edge and continue to expand in a quickly changing retail sector. Challenges such as tight competition, quickly varying customer preferences, and the need to invest in technology and e-commerce capabilities are all issues Costco must tackle. To stay ahead of its rivals, Costco has to find a way to defend its low-cost structure while also adapting to these changes.
Questions:
1. Based on the issue identified in the opening paragraph, choose 2 alternatives that might be pursued by the firm. One of the proposed alternatives should be relatively short term and would not cost much, and the other should be relatively long term and would require significant investment. For each of the proposed alternatives, describe risks and/or benefits to two internal stakeholders and two external stakeholders.
2. Select and justify, based on urgency and importance, one of the 2 alternatives mentioned above and describe an action plan to accomplish the recommendation: State a measurable goal - what results would need to be reviewed to determine if additional changes were needed? List at least one input control and one output control that would support this implementation and include at least 5 action steps to take to accomplish the recommendation.