Competitor Analysis
The primary competitor of Costco is Wal-Mart, which is equally a global retail brand with a strong presence in the US and Canada. The two companies target similar customers and have the same strategies for retailing their products. The competitive matrix between Costco and Wal-Mart is summarized in the table below.
(Source: Costco Wholesale Corporation, 2016)
From the above table, it is apparent that Costco is in a better position to retain customers and win their loyalty since it has very competitive prices besides an annual fee. Costco allows for unionization of its employees, which ensures that their concerns are addressed in a timely manner. This means that Costco is well-positioned to gain from a well-motivated and highly productive workforce.
Unlike Wal-Mart, which is very strict on employee relations, Costco has a better-organized workforce that is motivated to accomplish duties in an efficient and effective manner. In addition, Costco has a better global market presence than its primary competitor, with a store of 0.45 against Wal-Mart’s 0.15. The better global presence in the case of Costco can be related to a well-developed distribution network, diversified inventory, and a structure that has a global appeal (Costco Wholesale Corporation, 2016). However, Wal-Mart seems to perform better than Costco in terms of market share, especially within the local US market. The better market share in the domestic market can be attributed to Wal-Mart’s longer market presence, spanning more than five decades. In summary, Costco has a better competitive advantage in the local and international markets due to better prices, customer loyalty, and well-motivated employees (Cordiner, 2009). Costco has been strategic in overcoming the monster from an underdog in 1983 into a global brand through product diversification, competitive pricing, and constant employee motivation.
Brand Story Assessment
In order to understand Costco’s competitive advantage, the following external SWOT was carried out on the company’s brand. The findings are summarized below.
From the above analysis, it is apparent that Costco’s brand is at the apex of the competitive matrix when compared to the Wal-Mart brand and can be placed on the overcoming the monster plot presented by Tim Nudd. Costco rose from a single store to overcome the giant Wal-Mart through strategic brand positioning. The company has concentrated on brand diversification and strategic market expansion while maintaining the quality of products and very competitive pricing. The idea of diversification and multiple branding might help in developing my product it appeals to different classes of customers that can be differentiated by pricing, quantity, and quality (Dagnino & Rocco, 2009). This transformation supports the brand story as working progress that is determined by the positioning and target market as a point of differentiation (Cordiner, 2009).
References
Cordiner, R. (2009). Brand story. Web.
Costco Wholesale Corporation. (2016). About us. Web.
Dagnino, G., & Rocco, E. (2009). Competition strategy: theory, experiments and cases. New York, NY: Rutledge.