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Submitted By julphat
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Case 2 – Competition among the North American Warehouse Clubs 1. What is competition like in the North American wholesale club industry? Which of the five competitive forces is strongest and why?
Competition in North American wholesale club industry is mainly about offering lower prices than other competitors. But with this low price that warehouse clubs are offering, they still have to offer something different in order for them to generate more income and get more clients than their competitors.
The strongest among the five competitive forces is the rivalry among competing sellers. From all the membership warehouse and clubs, they are competing too much considering that they all offer at lower prices. They need to offer something different wherein the other competitors shouldn’t have to be able to achieve a competitive advantage. They are competing in same market and that is by selling those manufactured goods at almost same price levels. 2. Do all three warehouse club rivals – Costco, Sam’s, and BJ’s Wholesale – have highly similar strategies? What differences in their strategies are apparent? Does one rival have a better strategy than the others? Does one rival have a somewhat weaker strategy than the other two?
Yes, these three have highly similar strategy being used. Costco, Sam’s and BJ’s offer low cost, and that’s mainly their similar strategy.
Costco follows the strategy wherein they would offer low price while having a good quality of merchandise. Costco also holds markup price with a maximum of 14% which is only half or one third of the price of the good if bought in market. They have both brand-name and private-label products but are limited only to maintain their low prices for each of the products because this would lead to lower purchasing, shipping and in-store handling and...

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