Expert answer:need marketing help with some citations about Sam’
Answer & Explanation:Marketing SWOT analysis-123.docx The one thing it needs for sure is citations for the Sam’s Club section though. So, if you have any of those, i will add it.
marketing_swot_analysis_123.docx
Unformatted Attachment Preview
SWOT ANALYSIS
COSTCO VS. SAM’S CLUB
Joshua Zyrowski, Xinfei Fang, Krista Potts, Natasha Simmons, Benjamin Tenney
SVSU | MKT 331 – 03 | September 29, 2015
SWOT Analysis Costco VS. Sam’s Club
1
Costco and Sam’s Club are warehouse-type shopping centers where customers are
required to purchase a membership and can get discounted prices on bulk items. They compete
with large chain grocery stores such as Walmart, Kroger, and Meijer, and offer a wide variety of
products from potato salad and coco powder to blankets and motor oil.
Web Analysis:
Costco does an excellent job of using neutral, non-intrusive colors to make their site
effective. Their logo is bold and crimson to catch the reader’s eye, but throughout the site, they
stick to greys, blues and whites which are calming in nature. The website layout is organized and
easy to follow, making it user- friendly, especially to those who may not be technologically
advanced.
Upon going to samsclub.com (n.d.) and costco.com (n.d.), there are some eerie
similarities: both sites list the links to their various departments along the left-side of their homepage, both have membership links along the top of the homepage, and both have different ads,
promoting products, services, or sweepstakes. One succinct difference is that Sam’s Club’s
picture advertisements that appear on the middle of the homepage are fewer (4 different ads that
switch out automatically), while Costco’s ads are more (11 different ads) and seem to be more
focused on advertising products they offer, instead of the sweepstakes that are advertised on
Sam’s Club’s site. Both sites also feature a ‘top products’ section toward the bottom of their
homepage; again, Costco lists more products than its competitor.
Sam’s Club is similar to Costco in the color scheme of their website – using blue,
white and green as their most prominent colors. Their layout is also very user friendly making it
easy for technology-challenged people. Both companies make it easy for customers to navigate
SWOT Analysis Costco VS. Sam’s Club
their site and locate the specific item they are looking for and they also clearly mark sales and
specials so customers can find even more!
2
SWOT Analysis Costco VS. Sam’s Club
3
Strengths of COSTCO are similar to that of Sam’s Club, in that, both utilize the
economies of scale; that is, they have a wide variety of items, bulk size of items, and can ergo
sell at lower prices. Also, membership fees are relatively cheap, starting out at a $55 annual fee
for the Gold Star Membership and ranging to $125 fee for the Executive membership, according
to their website. A strength that may not be as obvious as low prices or a wide variety of items is
the perceived feeling of exclusivity members may feel: they are part of an exclusive club. Also,
COSTCO has substantially higher pay rates for their employees, compared to their competition;
starting wages at 10 dollars versus the state’s lawful minimum wage and according to Short, K
(n.d) the average employee’s wage is $21 per hour, while other warehouse chains start
employees at minimum wage. And, according to Luling, T. (n.d.), COSTCO is also the largest
membership warehouse chain, based on volume. They operate 671 locations worldwide.
Weaknesses of COSTCO could include the fact that many of their products are of low
quality. Though a perceived bargain may attract customers to purchase something like namebrand clothing, according to http://www.cbsnews.com/news/4-things-never-to-buy-at-costco/,
these sorts of products are not held to the same standards as where consumers would typically
SWOT Analysis Costco VS. Sam’s Club
4
find products of the same brand; the same article points to the fact that the much of the shrimp
COSTCO imports comes from Southeast Asia and Latin America, where environmental
standards are very lax. So, although many may think they are getting luxury items for cheap
(and in COSTCO’s defense, they essentially are), they are luxury items of substandard quality,
which would kind of imply that they are not luxury items at all. Another weakness is the fact
that, though their membership fees are low, they are $10 higher than Sam’s Club membership
fees.
Opportunities for COSTCO would include the obvious expansion of their market.
While they are the leader in volume, in terms of warehouse stores, they do not have a location in
the Great Lakes Bay Region, for example, while Sam’s Club (their most direct competition) does.
Although there is a COSTCO location in the Detroit suburbs, there seems to be far more Sam’s
Club locations than COSTCO locations, throughout Michigan, at least. So, penetrating new
markets, with the same products already offered may be beneficial to COSTCO. Also, according
to Huffington Post, COSTCO’s pizza sells more than many actual pizza chains. So, they could
offer their pizza in the frozen sections at other grocery stores, at gas stations, or open their own
pizza stores (outside of their warehouse stores).
Threats for COSTCO include the competition, namely Sam’s Club. One way to mitigate
the threat of Sam’s Club may or may not be to lower COSTCO membership fees. Also,
COSTCO has been criticized for not carrying an extensive enough array of options; that is, they
may have tons of a certain product, but only offer that product from one or two brands. A way to
counter this criticism may be to expand their logistics to include more suppliers. According to
their website, COSTCO does not accept manufacturer’s coupons; they accept only store
discounts and promotions. If COSTCO began accepting manufacturer’s coupons, it would not
SWOT Analysis Costco VS. Sam’s Club
5
seem that it would break them; but, it affects the perception of COSTCO being a bargain store
when they discriminate against certain coupons.
The Strengths of Sam’s Club vary between membership perks, marketing strategy, and
competitive wages for employees. First let’s look at Sam Walton’s requirement of “membership”
in order to set foot in the club. The option of three different types of memberships each ranging
from $45-$100 all boils down to one word: Exclusivity. Sam’s Club may not be the only
wholesaler to put a price on the ability to shop at their store, but they sure have been doing it a
lot longer than their competitors. $45 gets you a basic membership: the general perks of getting
to shop wholesale and some extra privileges. $100 lets you start shopping at 7am (3 hours earlier
than the basic membership) and lets you use some of the perks that go beyond the basic
membership. If profit margins are the bread of Sam’s Club revenue, then membership fees are the
butter. Charging members to shop at the club doesn’t cost Sam’s Club a dime – that $45-$100 is
SWOT Analysis Costco VS. Sam’s Club
6
pure profit. Sam’s Club also uses competitive wages to keep associates happy where they’re at.
Most positions start at $9.50 and have an annual wage increase based off of performance.
Weaknesses are abundant in this wholesale supergiant. Sam’s Club only recently (2015)
adopted the inventory management system that Walmart has been using for over 30 years. Its lag
in the technology aspect of business has kept Sam’s associates from achieving what Tech-savvy
retailers like Home Depot, and Bath & Bodyworks have. Another weakness is Sam’s Club
management’s obligation to transitional planning. In other words – Sam’s Club’s home office
(located in Bentonville, AR) sells its feature space in the club to suppliers who are willing to pay
a little extra for endcap space. This type of transitional bidding constricts the resources and
options that most managers at Sam’s Club have in terms of merchandising.
Opportunities are also abundant for the wholesaler. Sam’s Club does not have any
locations in Canada (a huge marketing experiment that went wrong once and has yet to be
attempted again). Sam’s Club is also lacking the convenience of 24-hour retailers like Kroger or
Meijer. Keeping the club open later could merit sales growth and catch the eyes of new clientele.
Furthermore, they do not offer fitting rooms, but have clothing available for sale. Sam’s Club
may be able to increase clothing sales if customers were able to try the clothes on before buying
them.
Threats are numerous and similar to the threats facing all retail giants. Sam’s Club is a
global competitor and as such faces the threats of global marketing, including: government
instability, climate change, natural disaster, and war. Sam’s Club’s first and foremost competitor
is COSTCO. COSTCO pays its employees even more generously and keeps their employees at
an advantage with the ability to unionize. Another threat for Sam’s is the ever-changing public
image of Walmart. Walmart is Sam’s Club’s ‘older brother’ in terms of sales and business
SWOT Analysis Costco VS. Sam’s Club
maturity, however it has been getting an increasingly negative image painted by its customers
and even its own “associates”.
7
SWOT Analysis Costco VS. Sam’s Club
References:
Luling, T. (n.d.). 11 Things You Didn’t Know About Costco. Retrieved October 28, 2015, from
http://www.huffingtonpost.com/2014/02/07/costco-things-you-didntknow_n_4725587.html
4 things never to buy at Costco. (n.d.). Retrieved October 28, 2015, from
http://www.cbsnews.com/news/4-things-never-to-buy-at-costco/
Short, K. (n.d.). 11 Reasons To Love Costco That Have Nothing To Do With Shopping.
Retrieved December 5, 2015, from http://www.huffingtonpost.com/2013/11/19/reasonslove-costco_n_4275774.html
Welcome to Costco Wholesale. (n.d.). Retrieved December 6, 2015, from
http://www.costco.com/
Sam’s Club Top Sellers. (n.d.). Retrieved December 6, 2015, from
http://www.samsclub.com/sams/homepage.jsp
8
…
Purchase answer to see full
attachment
How it works
- Paste your instructions in the instructions box. You can also attach an instructions file
- Select the writer category, deadline, education level and review the instructions
- Make a payment for the order to be assignment to a writer
- Download the paper after the writer uploads it
Will the writer plagiarize my essay?
You will get a plagiarism-free paper and you can get an originality report upon request.
Is this service safe?
All the personal information is confidential and we have 100% safe payment methods. We also guarantee good grades