Analyze the marketing strategy of one of the following companies: eBay, Costco, Home Depot, Tesla, and TJX. Cover the following topics: line of business (organization mission), target markets, SWOT, marketing strategy (4Ps), marketing department organization, value proposition, competitive environment, global operations, social responsibility/sustainability, and marketing metrics (assessing failure or success through sales, market share , profits, sales return on equity).
Your paper should reflect current sources, current practices, have a balanced perspective (pros versus cons), examine the differences between domestic and international strategies (if applicable), and have a scholarly tone. Factors which differentiate an excellent from a fair paper include: currency, extensive use of footnoting, the number and quality of sources used, the use of figures and tables to synthesize material, the effective integration of material from diverse sources and perspectives, and the development of a well-thought conclusion.
This mode of entry will help Costco Investment realize several advantages largely because of its pioneering position in the retailing market in Australia. As evident in the PASTEL analysis of Australia, the country features a considerably stable political atmosphere, friendly legal and socio-cultural environment, and stable, relatively developed and highly competitive economy. Therefore, at start-up, the company will enjoy the freedom of location and establishment of its facilities in Australia, which will be undertaken in light of its retailing strategy (Anderson & Sutherland, 2015, p.98). Also, it will not only enable the firm to take advantage of the skilled workforce from Australia, but also train its new staff according to the culture and traditions of the organization and equip them with relevant skills and competencies for performing their tasks and meeting the strategic goals. The implementation of new offerings and technology would be undertaken much quicker and Costco Investment will enjoy complete control of resources and decisions as the legal system in Australia clearly reserve the ownership and management of business enterprise exclusively to the company. This would be a major strength given that in acquisition, for example, the locals may be involved in the ownership and management of Costco as well as the need to adhere to the current legal framework within which retailing firms in Australia operate, for example, in situation where the government would preserve certain voting privileges to the locals (Wang & Wang, 2015, p.327).
The Australian retail industry in is characterized by a high competitive nature. The Company’s competitive position might be contrarily affected by new participants to the business sector, the already existing competitors, and expanded online rivalry, which could negatively results to declined sales. As a mitigation measure to these risks, Costco undertake a competitive pricing strategy in order to attract more customers.
Costco plans to offer its members an expansive scope of top notch merchandise at reliably lower costs than they can find somewhere else. To maintain a lower inventory costs, the firm’s merchandising strategy is focused on limiting some of the items to fast-selling models, sizes, and colors. By doing this, Costco can limit its number of stock keeping units (SKUs) to around 3,700 for each warehouse; as a result ensuring that it holds few items as compared to other supermarkets, discount retailers and supercenters (BOLTON, 2015, p.67).
However, there are several considerations regarding its strategy the firm can make to enhance its competitive advantage and realize even higher profit margins. First, besides analyzing their primary target consumers to understand their specific demands, the company should also focus on the needs of the clients rather than the products (Amit & Zott, 2012, p.41). This means that the firm has not only maintain product quality, but also continually improve in order to penetrate deeper into the foreign. This will help it take more control on quality management and delivery time. To have a better understanding of their target clients, Costco Investment will be in a better position to define the primary market segments it serves, the particular needs of the segment(s) it needs to meet, and how it will satisfy these needs (Wang & Wang, 2015, p.320). Businesses need to focus and better understand its customers rather than its products and services and the business industry at large (Abraham, 2012). Furthermore, the entity must deliver the highest level of products, broad selection of products, and most competitive prices. This focus on satisfying clients’ needs rather than on spotlighting its products will make the company become even more customer-oriented (Abraham, 2012).
The Australian retail industry in is characterized by a high competitive nature. The Company’s competitive position might be contrarily affected by new participants to the business sector, the already existing competitors, and expanded online rivalry, which could negatively results to declined sales. As a mitigation measure to these risks, Costco undertake a competitive pricing strategy in order to attract more customers. One of the strategy for attaining a good strategic venture in Australia is the Greenfield FDI.
On the other side, Costco is likewise subject to relentless rivalry from other distribution warehouse clubs, supermarkets, supercenters, retail chains, discount stores, and even neighborhood bodegas in Australia. Because of the substantial space necessity and small margin model, the firm’s nearness in urban zones is limited, which leaves a gap in satisfying costumer shopping needs in big urban centers. Additionally, millennials have ordinarily been opposed to shopping at warehouse clubs, albeit both Costco and other competitive firms are hoping to address this issue and spur participation rates among this demographic.
In 2015, grocery retailing industry in Australia has been dominated by Woolworths and Westfarmers, which held a joined value share of 61%. Rivalry between these retailers did not stay constrained to supermarkets with both having a solid presence and fundamentally the same as offering over different classifications within retail, including forecourt retailers and nourishment/drink/tobacco specialists. Therefore, Costco has to undertake a comprehensive strategic operation and management systems. The main competitive tool in the industry is the price. That is; members can be able to purchase merchandise in bulk at a relatively competitive rates as compared to the prices offered by other mainstream retailers.
The stiff competition in the industry is not a cause for alarm for Costco. This is because, despite the leading firms in the Australian retail industry engaging in price wars, other small retail firms have managed to survive and undertake a profitable venture in the industry. In addition, Costco is coming to the industry was a good strategic investment reputation. For instance, Costco has had a successful race with its competitors. The advantage of lower prices and gathering of the products under one roof has been a great bait to the customers. This has provided the Costco with a larger customer base than some of its leading competitors. The well positioning of the warehouses of the Costco has also helped the firm in the race of emerging on top of its competitors. Given to all these reasons above, the firm has had and above average rate to returns and has outdone all its competitors mostly in the US retail market (Daft & Marcic, 2016, P. 23).
Second, the firm needs to consider adjusting its strategy to exploit other uncovered markets in Australia’s retailing industry. Costco focuses largely on its membership approach to the market, as a result there exist other potential retail market segments that the firm has not yet covered. Therefore, it has to exploit these market segments, but by first studying and understanding their demands, then deliver products that meet their demands. Particularly, the company has not penetrated deeper into corporate Australia. The corporate business niche promises greater prospects as they have higher income. Exploiting this segment may see the company realize even more profit.
Australia’s ageing population and the retirement baby-boomers are other potential investment opportunities. Demographic statistics and analyses suggest that the ageing population in Australia constitutes one of the major trends that is rapidly evolving in the country, with the rate anticipated to peak in the next decades (Churchill, B., Denny, L. and Jackson, N., 2014, p.373). It is forecasted that the proportion of the Australian population aged 65 and above will rise from 14% to 22% by 2061 (Churchill, Denny & Jackson, 2014, p.373). Although this trend is a major concern to Australian government, it can be a greater opportunity for Costco due to lack of saving and high spending that characterize this population. Costco can take advantage of the trend by creating products that meet the unique needs of this ageing and retiring.