Costco Change Drivers Essay

The factors that are driving changes in the retail chain industry are increasing globalization, emerging new Internet capabilities and applications, product and marketing innovation, reductions in uncertainty and business risk, and changing societal concerns, attitudes, and lifestyles. First, increasing globalization drives change in the retail chain industry by way of finding new markets to compete in such as Costco’s expansion plan into France, Spain, and several locations in Asia. Next, emerging new Internet capabilities and applications drives change in the retail chain industry by way of seeking new approaches from the old brick-and-mortar way of having contact with consumers to now having brick-and-click approaches as those like Costco sell to the public by way of physical store locations (brick) and through the World Wide Web (click). Along with the previous driving changes, product and marketing innovation seems to be another driving change in the retail chain industry as can be seen in how companies find new ways to provide products to consumers such as how Wal-Mart provides customers access to products it sales online to be shipped site-to-home where a customer must pay for shipping or site-to-store where the customer does not pay shipping but must obtain the purchased items at an actual Wal-Mart store location thus increasing store traffic for possible more sales. As far as marketing innovation retail chains must find multiple avenues to get their name and products known to consumers by advertising online or mobile devices when a consumer uses a free electronic service or game instead of just television and print media. Next, reductions in uncertainty and business risk drive change in the retail chain industry in the way of deciding to expand or reduce its locations such as how Wal-Mart expanded into China and later stopped functioning all together into China, to invest in other opportunities such as Target has recently begun to get into the grocery retail business in addition to its department store approach, or reduce wages or jobs as Costco has decided against even in the turmoil of the Recession of 2008-09. Lastly, changing societal concerns, attitudes, and lifestyles drive changes in the retail industry in how consumers likes and dislikes must be at the forefront in what products and services to offer or not to offer in order to stay competitive and receive a profit.
Costco’s closest competitors are Sam’s Wholesale, Wal-Mart, Target, Kohl’s and K-Mart. Each of these companies is a big-box chain that provides diversified products for price conscious consumers in one location. Sam’s

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