Business Strategies Assignment Example | Topics and Well Written Essays - 1750 words

Business Strategies - Assignment Example Therefore, it is capable of getting large and deep discounts from the suppliers, thus giving the company an augmented purchasing influence as compared to the retailers. By making more sales and fast stock turnover, the company collects imbursement from clienteles before the dealers payments due date (Thompson, 2009). Hence, Costco gets more markdowns on cost and pass the reserves on to the consumers by reducing the prices. Additionally, the threat of out of date stock, one of the foremost fiscal problems, is reduced. The main fundamentals of Costco’s policy are a reduced price, restricted collection and controlled merchandise line. The company’s costs for high-quality countrywide and local products were far much lower than its competitors. Costco’s inventory only consisted of products whose prices could be bargained, hence offer customers noteworthy savings in expenditure. The main aim of the pricing strategy was to limit its gain on trademark products and for th e private label creation, â€Å"Kirkland Signature†. ... However, the company purposely restricted the assortment in every merchandise category to rapid- selling model, magnitudes and colors. This gave the customers a wide selecting range for the commodities, hence male more sales. Additionally, the treasure-Hunt Retailing policy was used to entice the members. In this case, almost a quarter of the product hand-outs were frequently varying, so the company’s product buyers kept on looking out to make occasional purchases of goods that would petition to the business’ customers and that would be rapidly bought. Some of the products could always be found in the company, while a few of them were the treasure-hunt materials, which kept on changing. Therefore, customers could self-assuredly walk in the shops to buy them. Hence, customers procure these products every time since they may not be found in the next stock. The company acquired its products officially on the gray market from other merchants or distraught dealers who would want to avoid excess or slow-moving stock. As a result, it made more sales than its competitors who did not apply this strategy. Further, because of the company’s cheaper prices and being well known for treasure-hunt storing, it spent less on marketing as well as advertising their products. This is because; the company did not need to engage into widespread promotion of their commodities unlike other companies that were not that eminent, thus cut on expenditure. They only used direct mail advertising, which they believed was cheaper (Thompson, 2009). Costco also applied the growth policy, where they opened various locations each year, especially in the United States as well as worldwide. The company opened several warehouses in different countries that