The Costco and Target Case Study

The Costco and Target is the biggest retailer in the United States, As the representative of the most successful companies, they have different and unique corporate strategy.

The strategies of Costco is quality merchandise, Quality of Service, brand loyalty and awareness of the customers towards Costco, they have three slogan "our business is to give the customer the best value we can", "know your customers--why they do business with you," and "stay focuses on your core business," Costco is a unique company and it has a clear business orientation.

The Costco just open to member, if you want shipping in the supermarket, you must pay the membership fee first. What's attracting customers willing to pay a certain amount of membership fees of dollars every year? The good customer service is one of its strategies, such as when you shipping in the store and have some question about a product, the staff can help you quickly solve it. Because Costco uses a portable computer called a radio frequency (RF) device. The RF device is very helpful because an employee is not limited to use a computer on a desk, but can take this device anywhere throughout the warehouse. If information about a certain product is needed, say, a price check or how much is in inventory, the RF device can be used to query by scanning the product bar-code instead of going to another computer to search. Among the useful functions the RF device can perform, after scanning the bar-code, the RF device can show the price, the amount of inventory in stock, and the anticipation inventory (to meet demands and avoid a stock-out).

In the core of their strategy, Costco sells limited numbers of products in fewer varieties to keep the cost down and they rely on high volume sales. But unlike their competitors they pay well to their employees. One of the key uniqueness and strength is that they sell membership to their customers that not only generate the fixed revenue every year but also increase the brand loyalty and awareness of the customers towards Costco. They advertise very less thereby reducing the cost by two percent each year.

Another crucial factors of Costco is their pricing strategy. They have unique way or mechanism that helps them keep the price lower than that of competitors and they can still afford to pay 48 percent higher salaries to their employees than their major competitors mainly Wal-Mart. Their membership base is growing and they are able to retain their customers. Virtually, they do everything to retain their customers. Most importantly they have very incredible return policies in hand to attract and retain customers. Furthermore, they try to find the best value pack for almost every product they sell in their location (store). For example, they have thousand packet box of Splenda (sugar free sweetener). They generally engage in bigger packages because they believe that bigger package