Assessment of Costco Company
Costco Wholesale Company has grown greatly since its start in the United States and has managed to establish a lot of branches mainly in United States and Europe. It has managed to establish itself mainly in the North American region with United States having the biggest share of its Wholesale branches standing at 318, followed by Canada at 62 and then Mexico at 23 (Fuller et al, 2007). Essentially, the wholesale company has found it hard to penetrate the Asian region mainly because of different customer preferences and tastes. It has only managed to have approximately 20 branches in Asia with a majority of these branches located in South Korea, Taiwan and Japan. Therefore, it will be of importance if the Costco Wholesale Company does a SWOT analysis on itself and use that crucial information to conquer more nations in Asia paying more preference to China. Hong Kong, china should be the key target because of its large population which may essentially mean a successful company may earn a lot of profit from operating in this area.
Costco Wholesale will find easy to enter a new market like china because of its core competencies and competitive advantage over smaller wholesalers. However, it will have to change the way it does its business if it were to enter this country. Costco uses a membership plan for its customers to create exclusivity and bond more with its customers. Nevertheless, if it intends to enter the Chinese market, it will have to avoid using this exclusive membership plan. Despite all the benefits that come with the membership plan, most Chinese will be not be receptive to the idea of paying some fee in order to join a membership plan.
The company will have to a different form of membership plan where a customer does not need to pay some fee to join the exclusive club. This strategy will entice more Chinese people to join the membership club and hence increase the customer base of Costco wholesale company. In this way, the company will find it easy to pre-select the demographics of its customer base without incurring a lot of expenses in doing market research on the field.
Also, Costco wholesale company should focus on the low and middle income customers who comprise the majority of China’s population. Although, the company mainly focuses on the high income customers such as government employees and licensed professionals, it will be beneficial if it changed its target customer base. The company stands a chance of increasing its customer base and hence more members may be registered in its membership plan by focusing on the low and middle income customer base.
Costco wholesale company will reap a lot of benefits if it chooses to enter the Chinese market and make the necessary changes. One major benefit will be an increase in its profitability margin. The company will experience an increase in its revenue which will translate to an increase in its profitability levels. Hence, the company will be profitable.
Assessment of the First Solar’s Multinational business context
The primary strategy of the First Solar’s Multinational business has been on the cost effectiveness of electricity production from a specific technology. Through emphasis on this strategy, the company has managed to have substantially lower capital costs per watt of production than that for competing technologies. The company is operating in a market that is extremely competitive in nature. Regarding technology, the company used much cheaper commodity glass as backing for its cells and coated them with only a small amount of expensive light-converting semiconductor instead of using high-cost ultrapure c-Si.
The market for solar products has changed drastically over the past four years (Solar, 2010). Initially, the company had relied upon markets with large existing subsidies for the sales of its modules. However, with the change of government policies of subsidies to solar power, the company has been forced to rethink its strategy. The global financial crisis of 2008 put a lot of pressure on the budgets of major consumers of solar products in Western Europe (Ewing, 2009). There was a reduction of funding for the majority of large solar development projects which were mainly funded by the banks. However, the solar market has started slowly returning to normalcy. First Solar Company has seen a slow increase in its customer base and is looking forward to a upbeat future. Through the purchase of the financially troubled OptiSolar Company, First Solar Company managed to increase its internal resources.
The company needs to utilize its structures and motivations to the optimum in order to establish a functional multinational business strategy and achieve its organization’s goals. Given its existing business model and large customer base, it would be advisable for the company to make use of these key elements of the strategy planning process. The company ought to take advantage of its existing customer base in Europe and offer more range of solar products to its market. It should take advantage of the rich subsidies in the European market and promote more of its modules to this region. This may result to an increase in customer placements and hence increase in profitability.
First Solar’s business should have a clear mandate for its operations. It should focus on entering new markets like Africa where there are few solar companies operating there. Also, it should increase the mandate of its senior employees so that they can have the freedom to make critical decisions regarding operations of the business. The company proved that it is very adaptive in nature when it managed to whether the financial crisis of 2008 and continued to pursue its important projects. The company ought to use this experience and its adaptability capability to achieve its multinational business strategies for the next 10 years.
The business has managed in recent years to build a great portfolio, hub and home base of clients. It should make advantage of these competencies by attracting more clients and in doing so; it will successfully achieve its business strategy in the next 10 years.
Assessment of the Apple Company
Crosby and Mabberley (2007) states that the value chain of the Apple firm is hugely similar to those of clothing stores such as GAP. The main difference is that the design stage encompasses product design and involves more research. The first stage of the Apple Company’s value chain is the design stage involves the designing of the apple product followed by the procurement stage. The third stage is the manufacturing stage which essentially involves the manufacturing of the apple products. This followed by the next two vital stages i.e. the distribution and sales stages. These are the backbone of the apple firm and involve the distribution and sales of the apple products.
The core activities of the apple company include designing, procurement, manufacturing, distribution and sales of its products (Trade Vibes, 2012). All these activities are integral components of apple’s product mix. They enable the company to monitor changes in market trends and gauge customer sentiments. Apple Company may choose to keep any of its core activities within its control or outsource them. The company should handle design, distribution and sales internally because they are vital for the company’s growth prospects. However, it should outsource procurement and manufacturing to other firms.
The company should manage its main internal activities itself so as to provide a great customer experience and increase its market share. The company would be gaining control of its greatest asset through involving itself in designing of its own products. It is through its unique product designing that the apple company has a competitive advantage over other companies such as Samsung. Also, the company should manage the distribution and sales activities of its value chain so as to have first-hand experience with its customers. The apple company will have the responsibility of making sure that all its target regions are adequately distributed with its products (Trade Vibes, 2008). Through sales, the apple company will be informed of the customers sentiments about its product and also be able to handle complains effectively.
Apple Company should outsource procurement and manufacturing processes. This would enable the company have a cost advantage by minimizing its manufacturing costs. The company should not procure the materials needed for manufacturing of its products, but it should outsource this process to other international firms. These firms will be able to purchase memory and display panels from Korea and semiconductors from Japan on behalf of the Apple Company.
Apple Company should outsource the manufacturing process to factories in china. The main reason that the Apple Company should chose to outsource its manufacturing process to other countries is that it would be too expensive to manufacture its products in the United States (Apple Inc, 2012). The company would be able to increase their profit margin on each phone by outsourcing to the Chinese factories. These factories offer a high rate of efficiency and are highly flexible in terms of outputs. This lowers the error rate of the manufacturing process making the Apple Company produce its products at a much lower price than in the United States.