Companies who have been around for decades are forced to implement new systems depending on their business needs. Changing technology is an initiative that is generally high cost, taking time to implement. There are numerous options available today that if the implementation of a new system is not strategically planned it could ultimately place a business in a financial deficit forcing businesses to reduce operations and sometimes shut down. It is important for businesses to invest in research and development (R&D) when deciding to develop new processes to maintain a competitive edge. Looking at the case, it is apparent that Costco was the leader in modern technology compared to the other two competitors.
Costco began to grow its business with two websites in 2004 in the US and in Canada. Costcos e-commerce sales more than tripled over several years, reaching sales of over $1.2B in 2007. BJs began upgrading technology in 2007 which was fully implemented in 2009. Although net sales increased from $8,792M to $9,802M during the implementation years, net sales have seized to take an impressive incline with the new system. Net sales only increased $152M from 2009 to 2010. The case did not report on any innovations related to technology for Sams Club.
Some of the problems Sams Club faces compared to the other competitors can be directed at the location of warehouses, their competition with Wal-Mart and their low scale target market. One way to improve would be to focus on their target market by offering upscale merchandise which will target upscale clientele. Sams Club could purchase BJs which already sells high quality brand merchandise. Merging with this competitor would tighten the market share even more. Focusing on members through this type of merchandising strategy will increase profitability. Another way to improve would be to reduce the amounts of international imports and focus on using American made products. Reducing import/export costs overall will increase revenue growth and financial performance.
World Economic Forum. 2012. The Global Competitiveness Report 2012-2013. Geneva: World Economic Forum. Available at www3.weforum.org/¦/WEF_GlobalCompetitivenessReport_2012-13
Wall Street Journal. Sams Club CEO Launches Charge on Rivals, Updated October 31, 2012, 1:44 p.m. ET http://online.wsj.com/article/SB10001424052970203335504578089131653808580.html By SHELLY BANJO
version of this article appeared October 31, 2012, on page B7 in the U.S. edition of The Wall Street Journal, with the headline: Sams Club CEO Launches Charge on Rivals.