BCG Matrix Low Industry sales growth rate High Stars Sundries snacks beverages

Bcg matrix low industry sales growth rate high stars

This preview shows page 6 - 9 out of 25 pages.

BCG Matrix Low Industry sales growth rate High Stars Sundries - snacks, beverages, cleaning products and daily necessities Question marks Ancillary - gasoline Hardline - health and medicine Fresh and cooked foods Cash cows Dry and packaged foods Dogs Softline – apparel Hardline – hardware, electronics, major appliances Ancillary - food courts, tire centers optical, hearing aids, photos Question marks
Image of page 6
COSTCO 7 Costco's gas services and products generate approximately 10 percent of the company’s total merchandise sales not counting membership fees. Compared to other competitors, Costco’s gas prices are lower. Costco's medicine and health products are imported in bulk packages and the prices of the firm’s prescription drugs are unbeatable. Compared to CVS, an American chain pharmacy, Costco offers cheaper drugs. Fresh food accounts for 14 percent of Costco’s sales revenue and is a market segment that has opportunities for growth. Costco tests beef processing plants every 15 minutes to ensure the meats are fresh in addition to offering free sample to entice customers with quality products. Besides, Costco often increases its food offering such as chocolate brownies, strawberry crepe cakes, strawberry mochas, and sushi to create buying trends. Star Costco's nuts, diapers, toilet papers, beverages, milks, and yogurts are best sellers. Most of the products are sourced locally and globally to create the product differences. Furthermore, the products are sold in bulk packages, which give customers value at low prices. Dog Hardline goods are not daily necessities and they rank low in sales measures compared to other products. Their durability implies that customers do not consume them often. Apparel is also at the lower spectrum at Costco since the firm stock that are out of season, which only people that do not care about fashion trends buy. The majority of fashion-forward citizens opt to purchase clothing at department or fashion clothing stores like Zara. These products, therefore, have low market shares and growth. Cash Cow
Image of page 7
COSTCO 8 Foods rank first in Costco’s sales rankings. For example, most consumers prefer packaged foods such as candy in large bags and potato chips with big packages. Costco utilize these low growing but high market share’s goods to remain successful. It is worth noting that some business units outlined in Costco’s BCG matrix have the potential of change from their current rank. For instance, question marks can change into stars while cash cows can change into dogs. Competitive Profile Matrix Wal-Mart, BJ Wholesale, and Sam's Club are Costco's top competitors. Headquartered in Bentonville, Arkansas, Sam's Club operates in the retail distributors industry and generates $90 billion less earnings compared to Costco. Wal-Mart is the world’s biggest retailing chain and similar to Costco, it operates in the retail distributors industry. Wal-Mart records annual revenues 300 times that of Costco. BJ Wholesale also competes in the retail distributors industry and has a similar geographical reach as Costco. Other competitors include Amazon, which operates an e-
Image of page 8
Image of page 9

You've reached the end of your free preview.

Want to read all 25 pages?

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors