Implementation, Strategic Controls & Contingency Plans Costco

Strategic plan- Implementation, Strategic Controls, and Contingency Plans Costco
Background
In order for Costco to be more competitive then there is a need to reduce labor costs and eliminate cannibalization (internal rivalry). Through building on the core competencies the wholesale/retail giant is likely to beat the competition of B.J’s and Sam‘s Club the main competitors. Even though, the company seeks to reduce the labor costs, this does not mean that the staff is not an important element to the company’s success. Hence, in order for the strategy to work the new hire will be paid slightly less during expansion of new stores. The area of operation also influences the strategy since in areas with lower cost of living this strategy is likely to work well. At the same time, the prices are adjusted accordingly without undermining the core competencies through focusing on stores for lower margins need to have lower salaries (George, Glick & Glowalla, 2004).
Objectives
There is a need o expand operations and improve the market share, since name recognition allows Costco to be more competitive in new areas of operations. It is necessary to go beyond name recognition since product differentiation has allowed the company to maintain its competitiveness. The risk that the rivals may copy Costco’s strategy means that maximizing the market share will ensure that there is customer loyalty. Maintaining high-quality and low prices for the products is vital to improving the brand value and customer allegiance (George, Glick & Glowalla, 2004). Opening the new stores will be carefully assessed as this should be consistent with the growth objective of maintaining sustainability. Hence, promoting the well-performing staff and training them to acquire new skills will make it easier to improve customer service. Even as the management seeks to grow operations the ethical objective of treat customers, employees and suppliers’ right will not be abandoned.
Functional tactics
The functional factors related to the actions undertaken in order to implement the strategies, and they are essential to meet the strategic market objectives. The cost element, customer need, convenience as well as communication are all factors that influence the functional tactics by taking into account the place of customers in the marketing strategy. As such, each of the employees will be assigned tasks to ensure that the strategy of expansion will be successful. This is meant to improve operations while continuing with the objective of empowering employees. This will be essential to cut costs while also highlighting the sustainability and innovative aspect as this is consistent with the objective of providing high-quality products that add value to the customers/members.
Milestones and deadline
The milestone and deadline highlight the timeframe for the company to achieve its objective and the actions to be achieved within one year. Performance needs to be reviewed annually to assess whether the implementation plan is within the set deadlines and challenges to achieving the set targets. The notable elements are for Costco are to increase the company’s market share and become more competitive compared to the rivals. Performance review is related to the goals, and having clear guidelines on what is expected can be beneficial to Costco’s employees who are more likely to be motivated. After one year it is expected that the company will have expanded and reduced internal competition as this will result in improved efficiency for the organization.
Key success factors
The organization’s resolve to put more efforts to improve the online sales segment will pay off as more customers compare prices online before purchasing (Allison, 2012). In any case, the company has a wide network of warehouse stores, while the effort to cut costs is meant to improve operations. Since the company has a reputable band, and at the moment there is no need for a big PR campaign. In any case, many customers choose this warehouse for stock bargains, and many merchandise treasure hunters are likely to be attracted by Costco’s competitive offers.
As a warehouse club, the organization benefits from attracting many bulk buyers, and there is high inventory turnover. For customers who prefer in bulk buying large amounts help to reduce the cost of purchases as they get discounts (Trefis, 2013). As such, the membership fees are offset by the discounts and offering the ...