INDUSTRY ANALYSIS

4106030401 Daniel
4106030426 Jack
4106030414 Fernando

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Outline
● MICROECONOMICS AND COMPETITION
● Industry and position
● Financial position
● Sustaining Competitive Advantage
● Proposal

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MICROECONOMICS AND COMPETITION

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MICROECONOMICS AND COMPETITION OF COSTCO

Costco’s business model enables it to make massive profits, sell products at rock
bottom prices and treat its employees well. Costco marks up its merchandise
about 11% above its average total costs. Most other retailers mark up their
products anywhere from 20% to over 100% of their average total costs.

There is so much demand for Costco’s low prices, that people will pay the annual
membership fee in order to take advantage of Costco’s discounts.

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UNDERSTANDING THE BUSINESS MODEL
Costco sells exactly what consumers want.

Consumers love the bulk sizes because they are proportionately much cheaper
than competitors and they love getting a lot of what they want.

Costco has great relationships with manufacturers. (lowest prices)

Companies want to sell their products to Costco because of the massive number
of units that will sell if their product is sold at Costco.

Because of its negotiating power, Costco is able to get its inventory for the lowest
price of any firm in the market.
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All Costco locations are
warehouses with cement
floors. The warehouse setup
has much lower fixed costs
than its competitor’s retail
spaces.

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BCG MATRIX

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10
STRATEGIES
Visa, Mastercard and Discover were going to charge Costco a fee on all credit
transactions that was more than Costco was willing to pay, so Costco decided
not to do business with them.

Costco figured that since the credit card companies wouldn’t accept the deal that
Costco wanted, the credit card companies would miss out on providing credit
for billions of dollars’ worth of transactions.

Even though most members’ savings accumulate to many times the membership
fee, the money paid by each member helps Costco cover some of its operating
costs.

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From 2019, the only credit
cards Costco accepts are Visa
network cards.

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Whenever you swipe your card, you cost businesses a sliver of money because
they have to pay a “merchant fee.” About 2 to 3 percent of what you pay is taken
out and given to the credit card company and bank.

Costco came up with an even more strategic way of saving money—a lot of
money—by striking a deal with Visa. The warehouse club agreed to accept only
Visa cards, and in exchange, the credit company lowered Costco’s merchant fee to
a negligible less than 0.4 percent. By trimming its own costs, Costco can keep
prices lower for its members.

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Membership

One-stop shopping

is customer can buy all they need in one destination. Costco has a variety of
product from sundries to boutique to let customer select and also have in-store
service such as food court, tire center, gasoline to add the value of membership.

treasure hunting

Costco's product selection is special and deliberated to create the product

difference. And their product placement and price discount is not fixed and
irregular, so it can trigger member to have a treasure hunting experience and
also creates a sense of urgency to buy.
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Nearly 90% members continue their membership in the U.S. and Canada

Costco has 91% renewal rates in USA and average 80% renewal rates in the world,
it means their members generally approve Costco's membership value and
consider that it is worth to be Costco's member and pay the annual fee.

offer a savings to members

Costco have strong supplier's bargaining power and through their economies of
scale to bulk procurement the goods at low cost to pass the savings onto its
members.

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net income by membership

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In terms of renewal rates, at Q4 end, our U.S. and Canada membership renewal rate came
in at 90.9%, up 0.2% from 90.7% as of the end of the last quarter in 2019

Not only were renewals impressive, but the company ended the fourth quarter with 20.8
million executive memberships -- up 362,000 sequentially. This means the company
added 23,000 new executive members per week during the period.

The company's e-commerce sales continue to grow much faster than its total business.
Same-store e-commerce sales rose 19.8% year over year during the period, or 21.9% when
adjusted to exclude fuel sales. This compares to 5.1% total company same-store sales
growth.

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only membership can own visa cards

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Costco visa cards in Taiwan
● 國泰世華 visa card
● more than 200 million in 2018, Taiwan ( ⅓ of

the total amout of the cards from 國泰世華

bank

● 1,600 billion from costco visa card of total 4,895

billion in 2018

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● charge 1.5% processing fee for each consumption
● 1% for National BankAmericard Inc. 0.5% for bank

1,600*0.5%=80 billion in 2018 Taiwan

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How bank benefit from the co-breaded credit card?

The Costco Anywhere Visa Card at a Glance by Citi bank

Fee and drawback for purchase is 15.24%

as the purchase sales in 2017 is 103 billion

the total fee of it was 15.6972 billion

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The companies cannot always pass on the increase in cost price to their customers. The retail
store management might consider switching suppliers or discontinuing any product.

There are infinite possibilities that may cause supply chain disruptions. Many companies adopt
“vertically integrated business model” for better management of the supply chain.

In a vertically integrated business model, the primary business takes over control (partial or full)
of the supply chain.

There are two (main) methods of vertical integration:

Controlling the supply chain through active participation (e.g. investment in suppliers’ business
in any form)

Setting up (from scratch) a separate production and/or manufacturing facility

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CHICKEN AND COSTCO
Costco’s ready to eat Rotisserie chicken is a favourite meal of American
households. It sells 60 million (approx) meals each year at the rate of US $5 per
meal. Carrying on with our approximate sales figure the annual revenue from
Rotisserie chicken sales is US $300 Million.

The American poultry market is dominated by 3 companies; Tyson, Pilgrim’s

Pride and Perdue. All three of them are facing lawsuits for unethical business
practices. There have been recalls of poultry products because of contamination.

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Cartelisation of poultry business has further suffocated business growth in the
poultry sector.

All of these factors have hiked poultry prices. Costco, operating on low margins
cannot afford to offer Rotisserie chicken at US $5 in this business environment.
Therefore, the store adopted a vertically integrated business model by setting up
its own poultry processing center.

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A shift to vertically integrated business model is not always successful. However,
the following factors increase Costco’s probability of success:

Costco’s financials are strong.

The estimated annual revenue from sales of Rotisserie chicken is US $300

Million (approx 60 million chickens) whereas estimated project cost is US $275
Million (for processing 100 million chickens).

The project budgets are confidential information and are not shared by
companies, but these figures alone show that the project will be a game changer
for the company.

It is not Costco’s first such business venture. Since the mid-1980s, Costco has
maintained the prices of its hot-dog-and-soda deal at US $1.50 (mainly) because
the company produces the hot dogs at its Costco Tracy Meat Plant in Tracy,
California. 27
RIVALRY: WEAK VS STRONG AND WHY? WITH EXPLANATION
Rivalry: Carrefour/ RT-Mart/ A-Mart/ Taisuco/ Save& Safe: weak

In Taiwan, Carrefour has 104 stores, RT-Mart (22), A-Mart (16), Taisuco (10),

Save& Safe (2). Carrefour is one of the largest hypermarket chains in the world (with

1,462 hypermarkets at the end of 2016). Carrefour operates in more than 30 countries.

RT-Mart, A-Mart, Taisuco and Save& Safe are hypermarket chains in Taiwan!!!!!

THERE’S MORE IN THE NEXT SLIDES!

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RIVALRY: WEAK VS STRONG
Product diversification: strong

Hypermarket offer variety of goods to meet lots of consumer demand. Compare

to Global Strategic Management Costco, Costco control their product amounts
below than 4,000 types and select only 2 or 3 best seller for each category.
(Costco's sales items are 1/10 of hypermarket )

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Product differentiation and uniqueness: weak

Costco is deliberated to select their products to compete with other retailers

through product differentiation to attract members such as imported goods,

boutique (Coach, Prada, diamond, and so on ), in-store service (food court, tire
center, gasoline and so on). Costco's products are bulk-package and low prices
and irregularly have a discounts to members. Compare to their rivalry, their main
product are daily necessities, groceries and

fresh foods

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Capital requirement: weak

The hypermarkets need to invest more capital to expand their size to compete
with Costco.

Capital:

Costco 64.4 billion (USD) Carrefour 38 billion RT-Mart 49 million A-Mart 52

million Taisuco 1.8 billion Save & safe 45 million

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Size: weak

Costco's size is bigger than hypermarket. Costco have economic of scale make

them procure more bulk package products with low cost. The more goods Costco
sells,

the bigger the economic scale and cost advantage they have

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Cost condition: weak

Costco has economic of scale to enhance their bargaining power with suppliers
and they bulk procure a large amount of products to generate cost savings.

They directly buy the goods from suppliers through cross-docking transport to
a big warehouse to allocate their goods and then deliver to Costco.

Overall, through their supply, inventory management, no-frills, produc

selection, private label brand and pricing strategy, it make them have an
inventory and operating efficiency to create the cost advantage to compete with
other retailers.
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EXPLANATION
Overall

Costco's competitors in Taiwan are hypermarkets and they concentrate on

different consumer groups. Costco's business model and strategy are different
from Taiwan's hypermarket.

In addition, Costco gain strength through internationalization. Therefore, it's

hard to imitate and compete with Costco's model (supply chain, distribution
system, product selection, pricing, marketing and membership system) and financial
capital.

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COMPARISON
Costco's size is bigger than hypermarket. Costco have economies of scale make
them procure more bulk package products with low cost. The more goods
Costco sells, the bigger the economic scale and cost advantage they have.

Costco has economic of scale to enhance their bargaining power with suppliers
and they bulk procure a large amount of products to generate cost savings.
Costco's supply chain is different from other retailers.

They directly buy the goods from suppliers through cross-docking transport to a
big warehouse to allocate their goods and then deliver to Costco.

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PX-Mart is a supermarket chain in Taiwan. In 2014, they announced they expect

to expand their stores over than 1,000 and turnover increase from 70 billion to
200 billion in 3 years. And 2017, they have 900 stores in Taiwan and turnover is
nearly 100 billion. So, their size is continuously increasing.

In 2006, PX-Mart took over 善美的超市 and learned fresh food processing skills
from them. In 2007, they took over 台北農產 and learned vegetable and fruit
logistics system. In 2014, they took over 全買超市 and opened 全聯二代店 to
cooperate with peasant farmers and built a charitable platform.

In the shop, they offer fresh goods account for 50%. In 2015, PX-Mart took over
MATSUSEI to access into department store. Before, MATSUSEI is good at import
and international procurement. Thus, PXMart make good use of acquisitions to
strengthen their own development path.
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Nowadays, in Taiwan have lots of small families, so most of consumers take
distance and convenient as their consideration. So PX-Mart is a good choice for
small families or who want to buy goods near by their home and seek
convenience. PX-Mart also make an effect to their ads and social networking apps
promotion, in recent years the age of group gradually decreased.

But Costco's business model and strategy are different from PX-Mart. In
addition, Costco gain strength through internationalization. Therefore, it's hard
to imitate and compete with Costco's model (supply chain, distribution system,
product selection, Global Strategic Management- pricing, marketing and
membership system) and financial capital.
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How much should Costco charge
for membership?

Without costco membership the

price ratio is given by the slope of
the “without Costco membership”
budget constraint and the consumer
chooses the bundle at “No Costco.”

If the consumer joins Costco they

can buy the goods that Costco sells
at lower prices so the budget
constraint rotates out.

With no membership fee the

consumer would consumer the
bundle at “Costco without fee.” 38
Costco would like to charge as high
a membership fee as possible.

The membership price is a decrease

in the consumer’s income.

The ideal membership fee (from

Costco’s point of view) is the
reduction in income that keeps the
consumer on their old indifference
curve. With the ideal membership
fee the consumer consumes the
bundle at “Costco with fee.”

Since income is on the vertical axis,

it’s easily read the ideal
membership fee off the graph. 39
Costco charges around $50USD for
membership.

This may not seem like a lot, but in

2010 membership fees earned
Costco revenues of $1.7 billion
dollars, which exceeded its profits
of $1.3 billion.

4Costco, therefore, is very

concerned with setting the ideal
membership fee.

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FINANCIAL STRATEGY
The location of Costco may be big in size, but it makes the purchase decisions
with small types for their shoppers.

Rather than having to choose from 15-20 brands of each product, Costco gives
them one or two brands to choose that make their customers decide quickly.

Costco is not only a merchandiser but also a planner, they select from across the
growing body of brands in any particular category and choosing the best options
for their customers

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NO FRILL, SELF-SERVICE WAREHOUSE
Costco is a warehouse store providing no-frill products and store. From this
way. A no-frills service or product is a pricing strategy that offers a low price that is
obtained by removing non-essential features (i.e. free coffee or waiting room
magazines).

it has no extra or unnecessary expenses. Moreover, Costco is a store for

self-service to reduce labor cost, this concept is alike IKEA. From these two
activities, Costco can increase its operating efficiency even meet its goal, low
cost.

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WORD OF MOUTH ADVERTISING
Costco does not advertise itself by TV channel or billboard. But it does not mean
that Costco has no advertisement. Costco advertise by their consumers’ mouth.
For instance, Costco’s members will tell their friends that buying commodities at
Costco is great, no matter on price or quality. Accordingly, Costco has low cost
on advertisement.

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ECONOMICS OF SCALE AND SCOPE
● economics of scale

● economics of scope

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VALUE CHAIN

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SUPPLY CHAIN
● SKU (Stock Keeping Unit) : refers to specific items stored to a
specific location
● low SKU 3700/ walmart’s SKU >10,000
● B2B
● Do not obtain substantial portion from one supplier

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Industry and position

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FIVE FORCES IN TAIWAN

● Internal rivalry: a.mart,

RT-mart, carrefour
● Supplier power : various
marchandise sources
● Entry: moderate level
● Substitutes and complements :
replaceable
● Buyer power: Low switching
costs
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● more than 270 million membership in Taiwan
● average consumption 3000 each time/ person
● 13 Costco operations in Taiwan, three – Taichung, Neihu, and Chungho –
rank in the top 10 in the world in sales volume.
● free food samples/ high quality of goods/ return policy

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Financial position

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FINANCIAL DATA

1. Discount Rate : 7.0%

2. Payback Period : 45,400-1,126/8,384= 5.28

3. Average Rate of Return : Min: -0.3 /Med: 9.9 /Max: 23.4 /Current: 8.43

4. Net Present Value : 26,174.72-6,219,.82= 19,954.90

5. Profitability Index= 4.2

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PROFITABILITY
● mainly from membership fee (3,352 million) when net income is (3,659 million)
● the most important driver of our profitability is sales growth, particularly comparable
sales growth
● Comparable sales growth is achieved through increasing shopping frequency from
new and existing members and the amount they spend on each visit (average ticket)

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Efficiency
● achieved by volume purchasing, efficient distribution and reduced handling of
merchandise in no-frills, self-service warehouse facilities
● buy most of our merchandise directly from manufacturers and route it directly to
warehouses
● Floor plans are designed for economy and efficiency in the use of selling space, the
handling of merchandise, and the control of inventory
● strictly controlling the entrances and exits and using a membership format, lower
the inventory losses (shrinkage)

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● Merchandise is generally stored on racks above the sales floor and displayed
on pallets containing large quantities, reducing labor required
● In keeping with our policy of member satisfaction, we generally accept
returns of merchandise
● e-commerce websites in the U.S., Canada, Mexico, U.K., Korea, and Taiwan.
4% of total net sales in 2019

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Risk & potiential problems
● We are highly dependent on the financial performance of our U.S. and
Canadian operations.
● unsuccessful implementing our growth strategy
● Our failure to maintain membership growth, loyalty and brand recognition
could adversely affect our results of operations
● Fluctuations in foreign exchange rates may adversely affect our results of
operations

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Debt
● Short-Term Borrowings $865
● fair value of the Company's long-term debt $6,997
● carrying value of long-term debt $6,852

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LIQUIDITY

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COVID-19 IMPACT
● total net ales raise up
● allow no more than one person to enter per membership card.
● Special Operating Hours for Members Ages 60 or Older Costco Food Court and
Tire Center will be closed during these hours
● Product Limitations
● Return Restrictions
● Temporary Department Changes

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Sustaining Competitive
Advantage

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63
ISOLATING MECHANISMS

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PROPOSAL

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IMPORTANT STATEMENTS
In order to clarify what the proposal is about and to create a record of what is
stated the following could help the audience to follow step by step how the
proposal works and every aspect to defend the thesis, rhetoric and
purpose of this project.

A brief interpretation will be given with its corresponding explanation.

THE PROPOSAL WILL BE EXPLAINED STEP BY STEP.

Thank your patience.

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WHAT IS IT ABOUT?
Solving the massive consumer flow by IMPROVING the way both the mobile app
and website manage to reach and provide goods to customers.

WAIT A MOMENT!
YES! , There are numbers, data and economic concepts involved in such process.
Which their bases have been carefully obtained from thesis and
publications regarding especificaly in what we are implementing as a
proposal.

There is plenty to understand beforehand to apply the dynamics planted in the

next slides. 67
IS YOUR PROPOSAL SELLING FOUR PRODUCTS ONLY?

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THEN WHAT IS IT ABOUT?
The previous picture was ONLY to illustrate the current products that Costco is
selling and having it on the records, it works as a reference to know WHAT should
be IMPROVED.

One part and ONLY ONE PART of our proposal is including ALL THE
PRODUCTS IN THE STORE by melting ONLINE ORDERING AND WAREHOUSE
PICK UP together.

LET ME EXPLAIN YOU HOW THIS FIRST PART WORKS.

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EXPLANATION
Well, let’s get into business and common sense.

Currently Costco only offers the warehouse pick up service for LIMITED ITEMS
ONLY.

Let’s have a look at the departments WE WANT TO INCLUDE in our proposal.

In the next slide you’ll find a clear image of these departments.

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DEPARTMENTS INCLUDED
On the main web
page of Costco
we can find all
the departments
Costco offers to
its customers.

Same happens in
the mobile app.

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HOW TO SOLVE THE MASSIVE CONSUMER FLOW?
“We’re getting deliveries daily,
but still not enough, given the
increased levels of demand on
certain key items. It’s been a
little crazy this past week in
terms of outside shopping
frequency and sales levels, and
not only in the United States,”

CFO Richard Galanti said in an

earnings call late on Thursday,
March 5.

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WHAT TO CHANGE? ANALYSIS?
First we gotta get to the second part: ISSUES AND NEGATIVE FACTORS THAT
NEED TO BE IMPROVED OR MANAGED:

Covid-19: There’s not much explanation on this. The world is facing a pandemy.
Businesses and economy are falling apart changing how the world interacts and
thus how business regulate their interactions with customers.

Massive consumer flow: After supermarkets and almost every business closed
down their doors to customers due to the 2020 pandemy consumer flow of many
businesses basically reduced to zero. How to still keep on selling, producing and
getting profit from customers in a safe and efficient way is what we propose.

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DECLINE IN THE BIGGEST LEADERS SALES AFECTED BY COVID
This is a
graphic that
shows the
declines these
leaders went
through due
Covid-19.

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OK, OK, BUT HOW MUCH MONEY THEY LOSE OR WIN?
WE NEED
NUMBERS!!!

Nothing more fun

than graphs to
understand
declines or rises.

Here we can
easily appreciate

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SO THE APP AND WEBSITE DON’T WORK?
YES!, they do work. Unfortunately they need to be improved by including all the
products. (This was already explained in the first part)

THEN HOW TO MAKE MONEY?

Orders could be placed online or via app ordering any item available in stock by regulating its
weight and quantity.

WHICH IS NOT EASY.

Please follow up for a further analysis.

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WHAT IF…?
“Costco corporate management is reportedly visiting stores and ordering removal of cones
and tape used to keep customers in socially distanced lines, along with other crowd control
measures, making it extremely difficult for employees to stay socially distanced inside the
store.”

Wouldn’t it be great if instead of many people going to Costco, only the ones that need
a few items were more suitable to go inside and the ones that would purchase a big
amount of items compensate with a discount in order to stay home by purchasing
their items in advance online?

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RESTAURANTS
Due to Covid 19 social
distancing has obligated
restaurants to shut down their
operations.

As well known, Costco sells their

food at their dining areas. With
the new policies restaurant
workers won’t be needed, the
foods they sell wouldn’t be sold
and this represents a lost for
Costco.
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OK, BUT WE NEED TO TALK ABOUT MONEY
Alright, Food products are mostly in the 7% range. Membership fees pay for
operational costs. The cost of a soda in the food court is around 9 cents. 1.50
for a soda and hotdog might seem cheap but do not think for 1 minute that
Costco does not make a huge margin on food court products.

HOW COSTCO COMPENSATE THIS? HERE’S THE MONEY:

“Net sales rose to $15.49 billion from $13.87 billion in March 2019, Costco COST,
-1.08% said. Combined, store sales in the U.S., Canada and other countries where
Costco has a presence were up 9.6%, the retailer said. The report spanned the
five weeks from March 2 to Sunday.”
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e-COMERCE IS THE SOLUTION
So, is ONLINE shopping a solution for the current global economic situation?

Well… Let’s believe the numbers.

Costco reported an 8% increase in January net sales and a 14% increase in

February net sales. That month, when the first U.S. cases of COVID-19 surfaced,
e-commerce sales rose nearly 23%. By mid-March, major cities across the U.S.
issued orders to self-quarantine and businesses deemed not essential shut down.

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BUT HOW TO MAKE MONEY WITH THIS PROPOSAL?
ONLINE SHOPPING + PICK UP SERVICE!!!
1. Allow customers to buy online all products in stock from ALL CATEGORIES.
(NOT ONLY FOUR)
2. Compensate customers by giving them a certain percentage of discount if
they ship their orders.
3. Regulating the orders by WEIGHT! i.e. 5kg=4% off 10kg=15%off SHIPING
FREE
4. If customer wants to purchase only a FEW ITEMS they’d be more than
welcome to approach to the store this way leaving at home customers that
want to buy a big amount of items.
5. Customers who don’t want to wait for a shipment could order and make use
of the PICK UP SERVICE 81
POINT 6
6. Pick up service will collect CUSTOMERS’ ORDERS in a certain amount of time
that COULD BE SET UP by the customer when buying online.

It’s not that complicated! Let me explain.

Customer purchases online a good amount of goods. A software engineer could

apply a equation (Costco has billions of dollars and this should be an easy job for
a certified engineer working already for their website) for measuring and adding
certain amounts of items that aren’t measured by weight such as clothes. Most of
items are measured or have a register of weight i.e. paper

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EXAMPLE OF POINT 6
Equation that shows how Costco needs to
increase the deal frequency to gain more store
visits of cherry pickers. (cherry pickers as
customers who visit a store and buy only.
merchandise sold at deep discounts.) YES, it is
relevant for the proposal.

WHY? Because we can observe that most of

calculations for how much does a person cost
to transport, spend time, pay fees,
memberships etc.. profits from membership
fees can be calculated with equations.

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WHY NOT TO HAVE A FEW EQUATIONS MORE?
Our proposal is also to implement equations that calculate how much Costco can
afford to pay for free shipments (Which already happened during the Covid19).

Also how much percentage they can provide for certain amount of items:

Popular items vs non-popular ones. Expensive ones vs inexpensive ones. Heavy

ones vs light ones… Not too many variables in comparison with the previous
equations showed as an example that involve complex economy and human
behaviours.

Actually, ONE of the elements of these equations is analysed as “Effects of the

Warehouse Club’s Bulk Package Size.”
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SOUNDS GOOD BUT BUSINESS IS ABOUT NUMBERS
Effects of the Warehouse Club’s
Bulk Package Size calculation could
solve these questions for an
economist or someone in the field
with enough knowledge.

As we are undergraduate students

we can simply explain that there’s
evidence of these calculations for
Costco in order to prove our
point that equations are
needed to solve the issue
addressed in our proposal.
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PROFITS THAT OTHER PRODUCTS CAN GENERATE:

Why this data?

Well, there are many products included

in all products, therefore these are a
few examples of a Total Net Sales that
can be made if this proposal of
including all products, allowing
customers to buy and order online +
pickup service and getting MORE
sales.

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IMPROVED PRE-ORDERING SERVICE AND PICK UP
Customer A wants to buy a few
items at Costco. solution: Now he
can go freely and save time
because customers that want to
buy MORE ITEMS IN A BIG
SCALE are MOTIVATED to stay at
home by DISCOUNT AND FREE
SHIPPING, the ones that don’t
want to wait for the shipment are
motivated to PICKUP their items
ALREADY PACKED at the store
and getting a discount based and
calculated with an equation. 87
EASY EQUATIONS SOLVE THE PROBLEM ON HOW MUCH %OFF
Customer B wants to go to Costco but realizes that there’s a discount of 10% if
he/she purchases over 10kg of a certain kind of products.

This is key as it should be calculated with equations what kind of

products are afordable to get a discount by weight and which ones
are afordable to get a discount by kind.
Let’s not forget that there’s even an equation
that measures the “Travel cost and store
choice” and even has how “picky”
customers can be as a variable!!

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HOW WE DEFEND THE PROPOSAL:
Social distancing is applied succesfully.

We don’t want to lose customers so everybody can buy, in a minor, medium and big scale.
The more you buy the more discount you get.

The more you buy the more you’ll get motivated to STAY AT HOME. Massive lines of
customers will be reduced to customers that want to buy fewer items.

Others will be using a Pick up service, let’s say the customer orders 50 items, they get a
discount calculated by an equation depending on kind and weight, items will be ready
according to customer’s preferences.

customer must pay IN ADVANCE ONLINE. This way purchase is guaranteed, pick up is
guaranteed and items that should be refrigerated won’t go to waste.
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HOW WE DEFEND THE PROPOSAL:
Employees will get the packages for pick up according to a system that regulates
the time, this way customer will arrive ONLY to pick up since everything has
being labeled, packed and paid in advance.

Others will receive items at home and others will just approach to the store to
buy a few items without discount. This way customers are motivated to BUY
MORE, receive “discounts” that at the end will generate more profit for the store
and give the customer what they need by giving them the comfort and “discount”
they want, as this already works in this world with everything we purchase.

Three types of customers are targeted and solutions for their needs satisfied
with this proposal, as well as the government wins by satisfying the sense of
security of citizens because of the outgoing “pandemic.” 90
THANK YOU

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REFERENCES:

李麗滿. (2016, December 29). 躍量販龍頭 COSTCO明年業績衝800億 - 產業．

科技. Retrieved June 24, 2020, from
https://www.chinatimes.com/newspapers/20161230001067-260204?chdtv

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https://www.fool.com/investing/2020/04/01/costco-walmart-target-finally-see-c
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