Strategic Marketing

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INTRODUCTION Wal-Mart Wegmans Costco

Analyze the strengths and weaknesses of Wal-Mart , from perspective of its competitors Wegmans strategies

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Analyze the strengths and weaknesses of Sam’s Club from perspective of Costco Costco strategies

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RECOMMENDATION

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The largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business. It also owns and operates the North American company, Sam's Club Founded in Rogers, Arkansas by Sam Walton in 1962 The world’s largest public corporation by revenue the 2008 Fortune Global 500) Slogan :Low price, always Save money, live better

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Wegmans Food Markets is a 79 store US regional supermarket chain with stores in the New York, Pennsylvania and Maryland Appeared on Fortune’s annual "100 Best Companies to Work For" list since its inception in 1998 In 2008 and 2007 Fortune ranked Wegmans the third best company to work for in the United States Ranked among the top 10 for six consecutive years, Food Network recognized it with its award for Best Grocery Store in 2007

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Costco Wholesale Corporation is the largest membership warehouse club chain in the world based on sales volume The fourth biggest general retailer in the United States Headquarters : Washington, United States(with its flagship warehouse in nearby Seattle) Founded in Kirkland, Washington, in 1983 Costco is NO.29 on the Fortune 500.The ACSI (The American Customer Satisfaction Index) named Costco number one in the retail industry with a score of 81 in 2006.

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1)The brand image of Wal-Mart is more powerful than Wegmans 2)Wal-Mart’s main strategy is cost leadership approach whereby it can sell its product cheaper 3)The company uses information technology to support its international logistics system 4)The company’s policy of respect towards employees and customers makes the company so popular. 5)Wal-Mart’s market power is so high that the company can control its suppliers. Example, it can have influence on design directions by saying that it may be too costly for customers. 11/17/09

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1)Sam’s Club, which is owned by Wal-Mart has presence in more locations than Costco. Number of stores being 532 compared to Costco being 312. 2)Since Sam’s Club is under Wal-Mart it enjoys a powerful brand Image. 3)It can work in coordination with Wal-Mart to gain certain competitive advantages like using information technology to make logistics effective and achieve more buying power. 4)Wal-Mart’s cost leadership approach can be a threat when it starts selling similar products like that of Costco. 11/17/09

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1)Costco is the leader in respect to Sam’s Club. The company has higher total sales volume in respect to Sam’s Club. 2)An average Costco store generates nearly double the revenue of a Sam’s Club. 3)Approach taken is different-more emphasis on upscale brands and products like expensive jewellery, Starbucks Coffee etc, 4)It attracts a different kind of customer who are looking for upscale brands. 5)The American Customer Satisfaction Index rated Costco number 1 in the retail industry with a score of 81 in 2006 suggesting customers are more satisfied with Costco than any other company. 11/17/09

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1)Wegmans was founded in 1916 compared to Wal-Mart which was founded in 1962. So the company has been in business for a long time. 2)Despite being so huge and strong, Wal-Mart has not affected Wegmans much as sales of Wegmans are continuously rising and generating healthy profits. 3)The policies and style followed by Sam Walton has to some extent diminished after his death which Wegman can take advantage of. Sam’s flair of association with customers and employees missing now. 4)Too much control over suppliers and manufacturers might not work in the future for Wal-Mart.

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We make the commitment: "Every Day You Get Our Best” Wegmans usually has 300 specialty cheeses on hand. Larger than most supermarkets: (We need room for all that stuff!) Stores run 80,000 to 130,000 square feet in size. Aisles are unusually spacious. Wegmans offers more customer convenience services and “stores within a store” than possibly any other supermarket chain.

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A membership warehouse club, dedicated to bringing our members the best possible prices on quality brandname merchandise. With hundreds of locations worldwide.  On merchandise: We guarantee your satisfaction on every product we sell with a full refund.  On membership: We will refund your membership fee in full at any time if you are dissatisfied. 

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Wal-Mart, have wrested control of the supply chain from manufacturers through a revolution in information technology and logistics. Wal-Mart’s International segment consists of its wholly owned subsidiaries operating in Argentina, Brazil, Canada, Puerto Rico and the United Kingdom, its majority owned subsidiaries operating in Central America, Japan and Mexico, its joint ventures in India and China and the Company’s minority-owned subsidiaries in China.

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Strengths The one of the nation’s largest and the most profitable retailers Warehouse club shopping is still a relatively new phenomenon compared to more established formats such as department stores and discount stores

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Sam’s Club also is in the unique situation of being able to leverage its relationship with WalMart and, what are arguably the best information and logistics systems in the retail industry Operator of 525 domestic warehouse club is at a pivotal point in its 20years history

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Weaknesses “We were not leveraging our market basket information to determine what customers we are going to upset by deleting those items. Now we have a set wholesale item list where we measure the basket, as opposed to the item productivity for business items," Turner said. "For treasure hunt items, item productivity is still very important, but for business items basket productivity is the driver.“ (http://findarticles.com/p/articles) 

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Being number one means that you are the target of competition, locally and globally Being global retailer means you are expose to political problems in the countries that you are operate in The cost of producing many consumer products tends to have fallen because of lower manufacturing costs

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Using plain spaces to sell products in bulk at deep discounts has won over many customers

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Costco offers upscale brands like Callaway golf clubs, Starbucks coffee, and expensive jewelry, and thus it attracts a different kind of shopper

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