Items are subject to availability Opportunities 01 – Upper middle-class to upper class shoppers 02 – Consistent market growth 03 – Bargain/special buy hunters 04 – Favorable turnover rate for suppliers 05 – Affluent customers looking for bargain high-end products 06 – Maximized brand equity due to lean stock 07 – Affluent shopper base looking for convenience shopping 08 – Positive image due to fair treatment of employees 09 – Cheaper priced quality products for price conscious consumers 010 – Warehouse club scheme builds rapport with customers
Threats TTL – Restricts other customers who cannot afford the membership TO – Competitors may have higher sales revenues due to higher markups TO – New competitor may come in and copy Cost’s strategy TO – Slow-moving items TO – Customers looking for their preferred brands or products TO – Price reduction of partner merchants when there is an in-store price reduction TO – Underhand dealings of some suppliers TO – Products are on “as available” basis might drive some customers to other stores TO – Customers looking for customer service particularly on product replacements/ defects Ill.
Identify the problem Cost’s straightforward retail strategy has given them an edge in the membership- club chain but can such rigid strategy sustain the Wheel of Retailing? ‘V. Objective 1. To come up with a long term course of action that would sustain the company’s wheel of retailing 2. To create a less rigid retail strategy that does not tear away from the company’s established system but allows certain flexibility in some cases V. Formulate alternative course of action VI. Recommendation SST: Conduct market research to see where there are areas for growth and expansion Major reasons: .
Based on Jim Signal’s own statements, Cost’s formula, though successful, is quite strict and rigid. The strategy does not allow for flexibility; therefore they may not be open to the slightest change and thus may end up losing one branch after another to a more trendier competitor 2. Some of the suggested courses of action can be incorporated after the research has been concluded; actions such as: a. Creating day-passes b. Creating a new customer service strategy c. Adjusting the company’s retail strategy 3.
Since we are going for a long term plan, it is best to study and research the Seibel areas to start from. In this way, even competitors can be put check while the company looks for programs and methods to grow continuously Action Plan 1 . Conduct interviews with shoppers to know if there are any preferred products that may be sold in the store. 2. Review the overall retail strategy to see if there can be additions to the inventory or store design. 3. Study a new scheme that allows customers to replace their product with a similar one or discounted one if the product is still under warranty 4.
Allow more benefits for current suppliers such as n-store promotional activities, etc. To lessen underhanded dealings 5. Invest in research and development to further monitor consumer trends and enhance products accordingly Contingency Plan 1. Make it a point no to stray away from the original retail strategy as a fallback 2. Maintain fast product turnover amidst new products to ensure consistency 3. Organize product-test events and product launch events to strengthen the strategy shift 4. Maintain market research/survey to gain additional information regarding consumer preference