Industry Characteristics
Industry size On a Global scale, the warehouse industry total revenue is $457 billion in 2017 (IBIS World, 2017). The main reason for a consistent increase in the total revenue is that in the years past, many people switched to warehouse clubs. With a wide range of clubs existing in the world, there is no shock that revenue has increased each year. In 2011, the wholesale industry produced nearly 420 billion dollars and continually gone up (Statista, 2018). The graph below represents the revenue from the years 2011-2014, a four-year period provided by Statistia (2018). The demand for wholesale clubs continue to increase, more and more countries are looking to get a wholesale store into their country. The majority of wholesale clubs that are started and their location headquarters are located in the United States. Although, these companies are making the biggest impact on the market, people are finding new ways
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One of the ways they do it is expanding from one location to another. At a world standpoint, “The top three wholesale clubs make 800 million this year” (Hoover's Online).
Key Success Factors The key success factor is important to every company in any industry. This analysis shows the companies how the customer chose the products and what the company needs to do to survive their competitors. When viewing the whole sale industry there are two key factors that every company should be aware of and if they have availability and product differentiation. Availability is a key success factor in the wholesale industry. The more wholesales located the more revenue it is going to bring. To accommodate this high demand of wholesale clubs, they additional stuff for consumers beyond the produce and home essentials. Many wholesale clubs are selling gas to its members, and walking into a wholesale club members have the opportunity right at the entrance to get their eyes
they shop. This in turn allows them to purchase more which directly helps the business.
Costco Wholesale Corporation is a large corporation with a total of 721 stores worldwide club operators over the past 15 years. With Growth earnings at an average annual rate of 11% for the next five years, and 12.12% forecasting earnings increase for this year. Close to 6000 quality products from furniture to Food to electronic goods are offered to customers with a membership.
Costco Wholesale Corporation is an international chain of membership warehouses operating on the concept that offering members lower prices will produce high sales volume and rapid inventory turnover (“Annual Report” 4). While Costco warehouses are designed to help reduce costs for small-to-mid-sized companies, memberships are also available for individuals (“Company Profile”). The two memberships offered by Costco include Business and Gold Sta...
Costco Wholesale is a multi-billion dollar overall retailer with dispersion focus club operations in eight countries. They are the apparent pioneer in wholesale field, dedicated to quality in every zone of their business and respected for their unprecedented business ethics. Despite their immeasurable size and extension in overall improvement, they have continued giving an agreeable domain which their laborers thrive and succeed.
Technology is constantly changing and the need to evolve is a must. As noted by (Stacey, 2011), companies must not just keep up. They must be leaders in innovations, so that they do not become the followers, but leaders as well, setting an example for all others to emulate. One aspect of the increasing of sales is to not just look at finances as the important factor. When employees are encouraged to create relationships with customers, win their trust and maintain that trust at all times. Finally, Pep Boys makes more money winning loyalty, practicing integriey and honesty than just pushing parts and service.
With increasing transportation costs and tighter margins there is a possibility that some large specialty retail players will consolidate assets, knowledge and outsourcing capabilities in order to generate economies of scale and scope.
Due to the good establishment of the business, it has huge market national. The company has therefore opened many retail shops and stores all over the country to ensure that their products are accessible to the customers. The entity provides a favorable environment, and many clients view the place as a fun shopping place to be. The retailer has targeted a big pool of customer because of the variety of products it sells. The stores products vary from kitchen goods, jewelry, and electronics clothes to hardware
Since the customers in this industry are not price sensitive, having a competitive advantage is vital for firms. Hill-Rom considers customer service is its reputation, thus gives significant value to its customer relationships. In addition, its variety of products gives high competitive advantage to the
Information outputs – They order massive amounts from manufacturers. Bulk packages sell larger quantities to consumers. The huge warehouse clubs eliminate the need for actual warehouses. At the same time, they reduce the need for handling. This greatly enhances distribution efficiency. Their large-scale membership base makes them strong.
Key Issues: At the end of 2012, Costco was a successful business; however, there are some issues that they would need to deal with. These issues mainly arise from their previous successful ventures as a warehouse wholesale company. The first issue is that Costco has competitors that can actually be and are a threat to their success. Competition allows a company to improve itself and prove its prowess to its customers. However, when a competitor is able to provide the service at a much reduced cost, problems will arise.
Being able to provide exactly what your customers are looking for is one of the best ways to gain and retain customers. You will also begin to see that customer satisfaction is climbing, which makes it much easier to cross-sell and up-sell and thus increase your profitability.
Many of the big companies in this industry use a cost leader strategy, and this requires large purchases of products but benefits them with pricing discounts. This also helps in product differentiation with competitors. Capital requirements - HIGH. The barriers to entry are high given the fixed costs associated with retail stores (Sporting Goods Stores, IBIS World). The amount of inventory required to open a story is also substantial.
On the other hand, most factors prove otherwise. The retail industry does not have high Economies of Scale to be exploited in general . Yet, it is impossible to run department stores like Metro on a small scale . A large retail space, inventory, and warehouse are necessary to host a specialized portfolio of brands and products to better attract both customers and suppliers. Heavy capital requirements and operational expen...
emerging or new market. It can originate from new technology or new market opportunities (Eliashberg, J., Lilien, G. L., & Rao, V. R. 1997). Literature defines product development as exploiting an untapped market opportunity and turning it into a value product for customer satisfaction. Development and introduction of a new product requires extensive research on understanding customer needs, market structure, emerging trends and analysing the internal & external competitive market environments. To evaluate customer satisfaction previous researches provide strong relationship between customer satisfaction and product quality, product features and value for money. ***
Today, the retail market is an integral part of economic development because it provides abundant power for the country’s interests. To succeed, retailers must usually update new information and techniques, or find different ways for attract customers from using cameras; loyalty cards of surveys that could help retailers compete with rivals. Most of people believe that the surveillance of consumers by retail anthropologists is manipulative and unethical. In fact, the retail anthropologists should survey to customers for many reasons such as access to customers demand, change and organize marketing strategies, and bring benefits to customers.