Comparative Analysis of Business Strategies of Costco and Walmart

This report offers a comparative analysis of the business strategies employed by Costco and Walmart. It begins by examining the business environments of both companies, including factors such as environmental impacts, social media's influence, and the rise of online shopping. The report then delves into the organizational strategies, leadership styles, and key functions of each company. Walmart's strategies are explored, including its approach to advertising, managerial decision-making, and customer service, while Costco's emphasis on open communication, bulk discounts, and transformational leadership is highlighted. Furthermore, the report identifies areas for improvement for both companies, such as reducing Walmart's environmental impact and enhancing Costco's service delivery. The analysis incorporates relevant references to support the findings and provides a comprehensive overview of the competitive landscape and strategic approaches of these two major retailers.

Running head: BUSINESS STRATEGY
BUSINESS STRATEGY
Name of Student
Name of the University
Author Note

1BUSINESS STRATEGY
Abstract
The Business environment refers to identification and analysis of all those factors that are
both internal and external to an organization and helps it in maintaining good relationship
with the customers. Organizational strategy refers to all the activities undertaken by the
company for the purpose of achieving its organizational objectives. The company selected or
the purpose of this study includes Costco Company and the Walmart Company. The main
aim of the paper is to compare and contrast the two chosen organization on the basis of
different criteria’s such as their business environment, their performance and also their areas
of improvement. Therefore the paper will discuss about the environmental factors, the
different issues affecting the business, the overall performance of the teams, the strong points
of the managers of both the companies and also included areas of improvement.

2BUSINESS STRATEGY
Body
The business environment includes all the internal and external environmental factors
that has a major impact on the business operations. These factors include the social, political,
legal, economical factors. These factors includes the increasing awareness of people about the
environmental impacts of organization, the increasing role of social media and also the trends
of online shopping (Hamilton & Webster, 2018). These factors have some major impacts on
both the organizations and Walmart responds to these factors through adoption of
environmental sustainability programs. On the other hand Costco supports stewardship
practices.
Walmart is faced with managerial issues such as poor communication and therefore
the same has a major impact on the performance of the employees because they may feel
demotivated. Therefore the decision making style at Wlamart is also poor because it had
decided to enter the Germany market however it could not face the local competition and had
to leave the same (Berthon et al., 2008). Walmart makes use of advertisements for promotion
of its goods and services such as banners, social media strategies and also makes use of
billboards and others similar techniques. Costco on the other hand has a culture open
communication and moreover it also aims at improving its public relation with the help of
the same. Costco operates in a variety of locations and the decision making at Costco
therefore also varies from one place to another. Costco makes use of bulk discounts in order
to promote its goods and services.
The leadership style at Walmart comprises of transactional and on the other hand the
leadership style of Costco company is transformational leadership style (Aaker & Adler,
2001). The four functions of walmart includes its planning, organizing, staffing and directing
activities and some of its beliefs that guides these activities includes- striving for excellence.

3BUSINESS STRATEGY
Respecting the individuals and also includes providing better services to the customers. At
walmart the mangers understand their responsibility towards the customers and are therefore
are ready to provide service at all times. On the other hand, Costco company functions
include its merchandising, operations, human resources, finance, construction and other
similar functions. The Costco company managers are able to provide goods and services to
customers at low prices and good quality. Areas of improvement for walmart comprises of
reducing the environmental impact of Walmart. Areas of improvement for the Costco
Company includes service delivery.

4BUSINESS STRATEGY
References
Aaker, D. A., & Adler, D. A. (2001). Developing business strategies. New York, NY: John
Wiley & Sons.
Berthon, P., Pitt, L., Cyr, D., & Campbell, C. (2008). E-readiness and trust: macro and micro
dualities for e-commerce in a global environment. International Marketing
Review, 25(6), 700-714.
Hamilton, L., & Webster, P. (2018). The international business environment. Oxford
University Press.