As one of the many poplar retailers located all over North America, Costco is taking a glimpse at long-term success. In fact, the company is already “consistently outperforming competitors like Wal-Mart and Target.” At first glance, these retailers come off as essentially the same providing similar products that comply to all types of consumers. As can be seen, Costco and its rivals have many points of parity offering necessities to purchase ranging from vegetables to stir-fry to shaving gel for your everyday routines.
Nonetheless, Costco is constantly displaying outstanding financial results in comparison to its rivals. This wholesale retailer is flourishing by following one simple strategy – “concentrating on driving sales.” Costco invests its earnings in their employees through improved pay and benefits in lieu of advertisement of the brand. This business also limits the number of items on the shelf. In comparison to Costco’s competitors, the company holds the points of difference offering notable customer service and limited variety of products. This form of value proposition attracts customers to spend their time and shop at Costco instead of Wal-Mart and Target. Thus, Costco is seen implementing the lack of innovation and the lack of diversity to add value to consumers in a simplistic, strategic way. It surprises and relieves me that such a successful retailer is prospering in sales without the integration of unsustainable or disruptive innovation.