Case Analysis Report Costco Wholesale In 2018: Mission, Business Model & Strategy Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Case Analysis Report Costco Wholesale In 2018: Mission, Business Model & Strategy Case Solution

Social

The social environment of China is good for the company, but it has to satisfy its’ customers’ needs by improving its quality to attract more social groups to buy the company's products.

Technological

Technological advancement of China and other countries are impacting Zisco company, as its competitors have advanced technology, which is a threat for Zisco. The company’s management should invest in new technology to compete with its rivals

Porter's five forces

Competition in the industry

Zisco is working in a very competitive environment, as it is facing local and international competition in the Chinese steel industry. The demand for steel is increasing rapidly, and Zisco has failed to fulfill the unsatisfied demands of customers, which give competitors an opportunity to enter this industry and to compete with Zisco with their new advanced technology and quality of products.

The competition is high in the steel industry, which is why it is not easy to get a good supplier and bargaining for the price is not possible, thus the company should carefully handle this pressure and develop the most suitable strategy to respond to local as well as the international players.

New entrants into the industry

The potential of a new entrance into the steel industry is moderately low, as many companies are competing with each other. There are many hurdles for a new player to compete on a global level, as it would need resources and huge investment to enter into this industry. Furthermore, new entrants also require a distribution channel to distribute its products, which makes it difficult for new entrants into this market.

Bargaining Power of suppliers

There are few suppliers providing raw material in this industry, so the buyer has less bargaining power and the supplier is influencing the company’s processes.

Bargaining Power of customers

There is a huge demand for steel products but Zisco could not satisfy its customers due to the low quality of its products. There is a probability of unhappy and unsatisfied customers switching to the other company’s products. Once Zisco loses its customer's trust, it would go through financial problems due to less demand and less sales of products. Zisco has to make new strategies related to customers' value and their satisfaction.

Threat of substitutes

The threat of substitute products is less in the steel industry, because it needs high investment for new players to enter into the steel market.

Problems faced by company

Zisco does not identify its objectives clearly, which leads the employees to the mission

perspective and makes it difficult to analyze the company’s permanent strategic goal.

Through new business strategies, the management increases the financial performance of the company, but they have huge permanent debts of the company.

It is difficult to cultivate a market-oriented culture in the company.

Zisco’s rivals are adapting CSP technologies of the company, which is why it is losing its competitive advantage and technological authority.

Recommendations and Pros & Cons

The company should implement a new strategy of value creation as the strategic initiative and should avoid its old differentiation strategy. It is further explained below:

Pros And Cons Of The Alternatives

As the old differentiation strategy was giving the company a competitive advantage of charging high prices and providing barriers for new players, but this strategy also made it difficult for Zisco to obtain the economy of scale as the production, marketing, and procurement cost were high. It also decreased the bargaining power of the company and increased the inventory prices and the value creation strategy initiative was in line with the concept of value

through a value creation strategy. Zisco can motivate its employees by developing and implementing the human resource policies that motivate employees to create a solid foundation for value creation. It also improves production process efficiency, which helps the company in lifting its production and quality of products, which increase the output of the company and its value-added products would retain its customers.

The company analyzes its business model through analyzing its internal factors, such as: its capacity, production cost, analyzing current market needs and establishing business strategy would make the company more competitive. Zisco should develop a better understanding of its customer value chains in the areas of product quality, specifications and value-added services of products.The customer value chains should be matching with the value chains of the company.

so the company is recommended to adopt the value creation strategy and avoid its old strategy in order to be more competitive.

Zisco should launch a new organizational culture that supports the value and it should communicate with middle managers and front line workers to develop strategies.It should concentrate on the research value chain and cost, and should also use just in time (JIT) system to reduce the cost of holding inventory and to provide its products promptly.

Pros And Cons

If zinc launches a new organizational culture that supports value, the company would be able to gain more and retain customers. If Zisco concentrates on the JIT system and research on value chains for customers and the organization, it will be beneficial for the company by adding value to the customer through providing high-quality products in time and adding value to the company by reducing its total cost, which makes the company more competitive in the steel market.

Zisco should diversify its product line to material and alloy. It should merge with any recycling company to reduce the cost of raw material

Pros And Cons

Diversification of products will help the company to enter into a new market and to get more customers, which enhances the sales and profits of the company. The merging of the company with any recycling company would allow Zisco to get a competitive advantage and use its waste resources productively. It will also reduce its dependency on the supplier, as it can use its waste resources through recycling.........................

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Case Analysis Report Costco Wholesale In 2018: Mission, Business Model & Strategy Harvard Case Solution & Analysis