International Strategic Management Costco Business Term Paper

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The strategy outlines clearly the ethical position of the organization in relation to interactions between consumers and various stakeholders. This is essential in the enhancement of service and products provisions. The organization focuses on the adherence to the law through development and implementation this marketing strategy. This enhances effectiveness and efficiency of the legal interaction between consumers, shareholders, and stakeholders. The organization also pledges to take quality care of its members. This is an essential aspect of motivation to the workforce in the pursuit of the organizational goals and objectives with reference to the 25-year plan. The strategy focuses on the provision of opportunities to stakeholders and shareholders. The organization also focuses on rewarding its shareholders through effective and efficient return on the capital. There are also quality programs to enhance the performance of the workforce thus essential in the aspect of increasing volume of profits and revenues. The organization also focuses on the promotion of respect to the suppliers regardless of the size or volume of products to the entity. This is essential in the development of the reputation and image of the organization across the industry (Thompson 2008, p. 40).

What are the Key Strategic Issues (KSIs)?

There are various strategic issues emanating from the marketing strategy by Costco business entity in the pursuit of objectives, mission, and vision. One of the essential strategic issues is the identification of the various opportunities for the maximization of the sales and profit levels. This enables the organization to provide variety of products to the consumers in relation to the needs and preferences of the loyal members. The organization also has the opportunity to focus on the provision of alternative methods for the procurement process. Identification of opportunities enables the organization to enhance effectiveness and efficiency of the products, services, manufacturing, and distribution process. Another key strategic issue is evaluation and understanding of the initiatives.

This is through understanding of the role of technology, components, and aspects of the business model, mission, and vision. This is vital for the realization of the goals and objectives of the organization within the context of the 25-year plan to become fourth and eighth in the United States and across the globe respectively. Another key strategic issue is the implementation of the plan. The organization has the obligation and function of ensuring quality and effective implementation of the plan to realize the vital goals. This is through developing an essential strategy to focus on the provision of various sale volumes and profit levels. The fourth key strategic issue is the implementation of a new program or element. For instance, the organization focuses on the creation of more new warehouses to enhance procurement opportunities for the consumers. This is vital towards the realization of the goals and objectives of the organization. The fifth strategic issue is the aspect of progressing or achievement of forward leap. This is vital for the enhancement of manufacturing and distribution effectiveness and efficiencies.

Key Drivers for Change in the industry

There are various drivers for change within the retailing or warehousing industry. One of the essential drivers for change within the industry is the pricing system. Pricing system has the opportunity for the achievement of competitive advantage. This is through realization of the increase in the consumer base. Pricing mechanism is also vital in the development and enhancement of the reputation and image of the organization. Another key driver for change within the industry is the aspect of marketing or advertisement. This mainly focuses on the reach of the target audiences with the aim of ensuring effective and efficient implementation of the growth and development plan.

The third key driver for change within the industry is the production selection. It is essential for the organizations to select fast-moving products in order to enhance their growth and development through increase in the volume of profits and revenues levels. Another key value is the adoption and implementation of technology towards enhancing effectiveness and efficiency in the manufacturing and distribution process within marketing. Other key drivers for change within the industry include developments in compensation, ethical values, mission, vision, business models, and consumer services or issues' management.

Critically evaluate the strategy by the industry in the case study.

PEST Analysis

In the execution of the industry analysis in relation to the implementation of the strategy in the case study, it is essential to focus on the political, economic, social, and technological factors affecting the realization of the goals and objectives of the organization.

Political Factors

Regulations and legislations play critical role in the realization of the goals and objectives of the business models. This is through variation of the number of players and entities by implementing regulative measures for the legal operations. Political stability in the areas of operations is vital for the execution of the business models and values. Variation of taxations by political authorities affects realization of the objectives and goals of the organization. This is through influencing the volume of profits and revenues by affecting the cost of supplies. Some of the political factors that might change and affect the operations within the industry include shift of power, transformation of taxation system, and corporate laws/regulations governing the operation of the companies.

Economic Factors

The 2008 recession affected the operations of the companies operating within the industry in relation to the case study. This is through limiting the operations of the organization. The state of the economy affects the performance of the industry. Prior to the economic recession, the key exchange rates were stable thus facilitating global and internal business transactions within the industry. The state of the economy indicates that it is expensive to hire unskilled labor towards implementation of growth strategy within the industry. Businesses within the industry also have the opportunity to access credit from the financial institution for the boosting of the operations of the companies. Globalization has the ability to enhance operations and revenues levels of the organizations within the industry within the case study.

Social Factors

Increase in the population growth rate in the United States and across the globe is an essential factor towards the increase in the profits and revenues of the organizations within the industry. This is through increasing the consumer base thus expansion of the marketing and advertisement towards reaching the target market. The industry provides services and products to cater for the needs and preferences of the diverse lifestyles across the demographic representation. There are different age groups and consumers within the context of the industry. These include professional, business, and household buyers thus diversity of the products and services within the industry.


The industry has the ability implement new technologies with the aim of enhancing effectiveness and efficiencies in manufacturing and distribution of the products. For example, the industry implements the concept of the RFID to monitor and track commodities or products within the warehouses. Such technologies are vital in enhancing the ability of the consumers in the identification of the products. The organizations within the industry also have the opportunity to implement such technologies to minimize the cost of operations while increasing the volume of profits and revenues. There is stiff competition in relation to the adoption and implementation of the new developments or technological advancements. The organization has the ability to achieve competitive advantage within the industry through effective and efficient implementation of the technologies in the manufacturing and distribution of products and services. Technology is applicable in the marketing or advertisement practices of the organizations within the industry with reference to the case study.

Porter's Five Forces Analysis

Threat of new entrants to a market

There is minimal threat of new entrants to the market. This is because of high investment costs and capital requirements for the equal competition of the small entities against larger organizations. Product differentiation and branding makes it difficult for the new entities to participate within the market. Limited access to the suppliers makes it difficult for the new organizations within the industry to compete against the main players. Pricing mechanism is also another factor contributing to minimal threat of new entrants into the industry.

Bargaining power of suppliers

The bargaining power of the consumer is relatively low because of several factors occurring within the context of the industry. These factors numerous large suppliers of the products, available products for supply, minimal cost of switching to alternative suppliers, large and significant customer base, and relevant substitute resources at the disposal of the entities within the industry.

Bargaining power of customer (buyers)

Powerful customers have the ability to exert pressure in driving down prices and increasing the quality of products for relative prices thus reducing profits within an industry. There are various customers in the market or industry thus reduction in the power of the buyers. The cost of switching to different suppliers' products is very high thus limiting the power of the buyers within the industry. Customer power within the industry depends on the number…[continue]

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